New regulations to make the process of switching bank accounts easier means that up to 14 million UK high street bank customers are expected to change banks in 2013
Mutual and ethical banks stand to benefit from the changes as thousands of customers react to a string of scandals within the big five banks, reports Move Your Money, a campaign group encouraging individuals and businesses to take their money away from the biggest offenders.
More than 500,000 people switched banks in the first half of 2012, with the Co-operative Bank reporting a 43% increase in new accounts throughout the year and credit unions taking on 20,000 new members. Meanwhile, the Building Societies Association says more than 78,000 savings accounts were opened in 2012.
Move Your Money chief executive Laura Willoughby said: “Public trust in the big banks has collapsed. The reputation of one of our leading industries is in tatters. Ultimately, customers are on the front line of the battle to save British banking: by moving their money to banks which are fair and transparent they are forcing banks to think twice about the way they behave.”
A recent YouGov survey indicates that as many as 14 million people will switch accounts in 2013 thanks to a new regulation designed to make the process easier. From September 2013, banks will be required to complete account switches within seven days, instead of current timeframes that see some customers waiting up to one month. According to the survey, nearly one in three high street bank customers said they would be likely to switch as a result.
However, Willoughby warned that the banking industry will continue to make headlines in 2013. “If you think news of this year’s banking scandals was unbelievable, there is more to come,” she said. “From RBS fines for the Libor scandal to further exposure of mis-selling products to customers, big banks will continue to lose ground when it comes to public trust.”
She added: “Cultural change doesn’t come from Whitehall or the boardroom, it comes from people realising the power of what’s in their pockets.”
Photo title: Move Your Money chief executive Laura Willoughby, who argues that public trust in big banks has collapsed
Photo credit: © Andy Cavell