The Competition and Markets Authority (CMA) has today
accepted undertakings from
Bacs Payment Schemes Ltd (Bacs) that commit it to delivering the
improvements required by the CMA retail
banking market investigation within a year.
An important change will be the extension of the redirection
service operated by the Current Account Switch Service
(CASS). This
is designed to give further assurance to customers that all their
payments will be switched from their old account to their new
one, and so overcome a key concern about moving banks.
At the moment only 3% of personal and 4% of business customers
switch to a different bank in any year, even though personal
customers in Great Britain could typically save £92 per year by
switching provider. Small firms could realise savings of around
£80 a year on average.
Alasdair Smith, Chair of the CMA retail
banking market investigation, said:
Switching is the key way for people and small firms to find
better banking deals and save money. Improvements to the
switching service will give customers better information about,
and so greater control over, their finances. This in turn will
make it easier to move their money and capitalise on better
offers.
Our banking investigation demanded that banks worked harder for
their customers. Taken together, its 17 recommendations will
save customers between £700 million and £1 billion over 5
years.
Bacs has also been tasked by the CMA to work with
banks and increase both awareness of and confidence
in CASS.
They will now work together to target those likely to benefit
from switching the most, such as overdraft users and customers
with high credit balances, and make sure they know other options
are available to them. A key requirement of the banking
investigation has already been delivered – to introduce
independence to the switching service. Previously run by the
banks it represented, CASS now has an
independent chair in place to ensure the service works for those
who use it, not just those who run it. Consumer groups and price
comparison websites will now be able to influence how the service
operates and promotes itself.
In August 2016 the CMA published
its final report, which
demanded 17 changes to
make banks work harder for their customers.
Further reforms will be announced shortly and a full timetable
for implementation is available on the case page.
