‘Big­gest bank­ing shake-up’ hasn’t made more cus­tomers switch

The Daily Telegraph - Your Money - - MONEY - Sam Mead­ows

Just 15,000 ex­tra bank­ing cus­tomers switched their cur­rent ac­counts last year de­spite a new scheme de­scribed as the big­gest shake-up for banks.

Open Bank­ing was launched a year ago after the Govern­ment’s com­pe­ti­tion watch­dog urged high-street banks to be more com­pet­i­tive and pro­mote switch­ing. It means banks must hold cus­tomer data in a stan­dard­ised way so it can be eas­ily ac­cessed by third par­ties with the con­sumer’s con­sent.

This was sup­posed to make it eas­ier to shop around for deals, but anal­y­sis of in­dus­try switch­ing data by Tele­graph Money has re­vealed that switch­ing ac­tiv­ity in­creased by just 1.5pc in 2018.

Re­mov­ing the 16,000 peo­ple who left TSB after its highly pub­li­cised IT melt­down, the num­ber of cur­rent ac­count switches ac­tu­ally de­creased.

Re­search by Splen­did Un­lim­ited, a tech­nol­ogy firm, shows that pub­lic aware­ness of Open Bank­ing is ex­tremely low, with just over one in five say­ing they had heard of it.

Im­ran Gu­lamhu­sein­wala, a trustee of the group tasked with im­ple­ment­ing the process, said it was too early to judge the sys­tems but that the progress made so far was “a step in the right di­rec­tion”.

A spokesman for the Com­pe­ti­tion and Mar­kets Au­thor­ity, which or­dered the shake-up, said Open Bank­ing would even­tu­ally “rev­o­lu­tionise” how peo­ple man­age their money.

He added: “It has made huge strides over the past 12 months, though it is still in the fairly early stages of the roll-out.”

Last year the ma­jor banks were ac­cused by new dig­i­tal ri­vals of drag­ging their heels over Open Bank­ing for fear it would cost them cus­tomers as it be­came eas­ier for con­sumers to switch cur­rent ac­count provider. HSBC was the first ma­jor bank to em­brace the soft­ware when it launched its Con­nected Money app in May, which has since been down­loaded 200,000 times.

This al­lows cus­tomers to view all their fi­nan­cial in­for­ma­tion, in­clud­ing in­vest­ment or sav­ings ac­counts, in one place. Bar­clays fol­lowed suit in Septem­ber by adapt­ing its ex­ist­ing mo­bile app to in­cor­po­rate this.

HSBC said con­sumers would soon be able to “round up” their pur­chases to the near­est pound us­ing its app, mean­ing some­one buy­ing a cof­fee for £2.50 would au­to­mat­i­cally put 50p into a sav­ings ac­count.

Na­tion­wide and RBS, which owns NatWest, both said they planned to al­low mo­bile app users to view all their ac­counts in one place this year.

Yolt, a money man­age­ment app that was the first to make use of Open Bank­ing, said it was work­ing on al­low­ing users to make pay­ments from their ac­counts us­ing the app. In fu­ture it also hopes to be able to no­tify users when they could save on ex­pen­di­tures such as en­ergy bills based on their spend­ing data.

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