Measures simplifying the bank switching process in the UK have resulted in a 16 per cent increase in people moving accounts, but the figure is significantly lower than industry analysis had anticipated.
New rules ensuring that the UK's 46m current account holders can swap their bank within seven days resulted in a marked increase in the number of customers changing accounts in the first six months of this year, according to figures released by the Payments Council, the body responsible for overseeing the service.
In the six months to the end of June, 592,695 accounts had been moved, compared with 511,139 in the same period the year before.
However a survey by business analytics firm SAS before the launch had suggested that the service would be taken up by up to five million in the first year, with two-fifths of customers saying that they had put off switching accounts in the past because of the difficulties involved.
The scheme was introduced late last year with a view of boosting competition and denting the dominance of the 'big four' banks, HSBC, Lloyds, RBS, and Barclays, which make up 75 per cent of current or checking accounts in the UK.
All outgoing and incoming payments should be automatically transferred, making the transition between banks as smooth as possible.
"Competition is growing as existing providers are upping their offerings and challenger banks are competing to attract new customers," the body's chief executive Adrian Kamellard said.
Responding to the findings, consumer group Which? said that the increased switching levels constituted a step in the right direction, but were not "the avalanche needed to transform the market".
“Poor products, high complaint numbers and low switching levels show the unhealthy dominance of our big banks, and unless we see a greater injection of competition this stranglehold will go on. It’s time for the Competition and Markets Authority to take a closer look at banking,” said the group's executive director Richard Lloyd.
A preliminary investigation into the sector will be published on Friday by the Competition and Markets Authority.