Almost 5 million U.K. consumers may switch checking accounts in the next 12 months using a new service designed to boost competition among lenders including Barclays Plc and Lloyds Banking Group Plc, according to a study.
Starting Sept. 16 customers will be able to move to a different bank within seven days, compared with as long as 30 days currently. This will make customers more likely to move accounts, SAS Institute Inc., a U.S. business analytics company, using data from YouGov Plc, said in a statement today.
“Historically, consumer churn between retail banks has been between 2 and 3 percent, however our research suggests this could increase significantly,” Nick Payne, retail banking consultant, SAS U.K. & Ireland, said in a statement.
Chancellor of the Exchequer George Osborne is considering whether to make banks relinquish control of the payments system in a push for greater competition with new “challenger” banks. Britain’s four largest lenders have about 75 percent of the market of 76 million checking accounts, the Office of Fair Trading said in January.
Financial institutions will redirect payments and deposits for customers moving their account to another bank with customers refunded any charges should the process go wrong, according to the industry-funded Payments Council.
YouGov polled 2,215 checking account customers from Sept. 2 to Sept. 4, for the research, Cary, North Carolina-based SAS said.
-- Editor: Jon Menon