New current account comparison service launched to encourage more switching
Around 1.6 million people have switched their accounts since the seven-day current account switch guarantee scheme came into force in September 2013, but people are still reluctant to change bank accounts according to research from Gocompare.com, with 40% admitting that they have never switched.
Nearly a quarter (24%) of those surveyed said that they haven’t switched as they can’t see how they would benefit from a new account, despite a third (32%) admitting that they would switch if they knew they could get a better deal on their current account.
Gocompare.com’s midata current account comparison service will help people find out which current account is best for them by allowing them to compare all basic, packaged and standard bank accounts currently on the market. Customers of banks that haven’t signed up to the midata initiative will not be able to use the midata comparison service in full as their banks have not yet agreed to provide the downloadable statements.
The comparison tool has been developed as part of the government’s midata initiative, which aims to give consumers better access to and control over the electronic data that companies holds about them. The purpose of the initiative is to help customers make better buying decisions based on how they actually use their current account.
Launching Gocompare.com’s midata current account service, City Minister Andrea Leadsom MP, said: “This innovation will put much more control in the hands of customers and could transform the current account market. It will help customers understand how they are spending their money and whether they can get the best deal.
“It’s also very important that customers know their data is protected if they wish to take advantage of this new tool, which is why I’m pleased the banking industry has worked closely with the government and the Information Commissioner’s Office to make sure safeguards are in place, particularly around anonymising an individual’s banking data.”
Gocompare.com’s new current account comparison service could help the 21% of consumers who admitted that they find it hard to compare current accounts, and the 21% who said that they don’t know which current account is the best one for them.
Matt Sanders, Gocompare.com’s banking spokesman, said: “Our midata comparison tool is an exciting innovation in the current account market and we’re excited to be leading the way by helping people use their real financial records to provide more meaningful current account comparisons. Enabling people to make better-informed financial decisions is at the heart of what we do as a company, and by making use of midata we can enable our customers to use their actual current account data to help them find what’s really right for them.
“And it seems that midata for current accounts couldn’t have come at a better time, as our research has found that only 8% of people have switched banks in the past 12 months, and of those 44% did so to take advantage of the incentives offered by a different bank. Clearly customers are being swayed by marketing messages, but with access to the tailored comparison we can provide them with, they can also decide what account is best for them once these incentives or introductory offers have passed too.”
Matt added: “A third (32%) of people admitted to us that they would be more likely to switch current accounts if they knew they could get a better deal elsewhere, and 13% said that they hadn’t switched as they didn’t know how to find the best account for them.
“This is why midata is a much-needed development in the current account market. Many personal banking customers find themselves baffled by incentives, charges and interest payments, but don’t have the time to search through each account separately to see which is the best one for their circumstances. By using midata they can do this quickly, easily and accurately.”