Competition in the banking market has started to gather steam, with increasing numbers of customers changing their main bank account, according to industry data published yesterday.
A total of 1.2m people used the seven-day switching scheme to change their current account in the programme’s first 12 months, the Payments Council said.
Switching has increased by 22 per cent compared with the previous 12-month period. This compares with growth of around 15 per cent earlier in the year, indicating that more consumers are comfortable with the idea.
However, this still accounts for only 2.5 per cent of all current accounts in the UK, as many customers have more than one account.
The switching guarantee was brought in to reassure customers their payments would be redirected to their new accounts and no transfers would be missed, in a bid to boost competition.
Banks have responded with a flurry of new offers on current accounts.
A recent City A.M. analysis showed Santander was leading the market with its 123 range of accounts, which offered a relatively high rate of interest, and cash back on spending.
The Halifax, TSB and Nationwide are also net gainers, while RBS is the biggest net loser of customers.