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| Swifter bank switching plan confirmed by George Osborne | Swifter bank switching plan confirmed by George Osborne |
| (35 minutes later) | |
| Bank customers will be able to switch their current account provider within seven working days, Chancellor George Osborne has confirmed. | Bank customers will be able to switch their current account provider within seven working days, Chancellor George Osborne has confirmed. |
| The plan comes shortly after a regulator suggested there was little choice over current accounts. | The plan comes shortly after a regulator suggested there was little choice over current accounts. |
| Mr Osborne said that a service, available from September, would see payments made to a customer's new bank within seven working days at no cost. | Mr Osborne said that a service, available from September, would see payments made to a customer's new bank within seven working days at no cost. |
| He also wants to open up the payments system to speed up transactions. | He also wants to open up the payments system to speed up transactions. |
| Dominant | Dominant |
| Lloyds, RBS, Barclays and HSBC now hold 75% of the current account market, which is valued at £9bn. | Lloyds, RBS, Barclays and HSBC now hold 75% of the current account market, which is valued at £9bn. |
| Mr Osborne, in a speech about the future of banks, said that he wanted to see consumers given the "most powerful weapon of all - choice". | Mr Osborne, in a speech about the future of banks, said that he wanted to see consumers given the "most powerful weapon of all - choice". |
| A number of changes are already coming in to increase choice, such as the sale of Lloyds and RBS branches - as mandated by European competition authorities. | A number of changes are already coming in to increase choice, such as the sale of Lloyds and RBS branches - as mandated by European competition authorities. |
| Now Mr Osborne has confirmed that legislation will ensure that a seven-day switching service is in place. This would allow "upstart" banks to get a foothold in the High Street, he said. | Now Mr Osborne has confirmed that legislation will ensure that a seven-day switching service is in place. This would allow "upstart" banks to get a foothold in the High Street, he said. |
| It would see direct debits and standing orders all moved over to the new provider at no cost to the customer through an automated system. | It would see direct debits and standing orders all moved over to the new provider at no cost to the customer through an automated system. |
| Customers are already able to shift, but few actually do so. Regulators have been trying to find ways to nudge customers into doing so, including breaking down a general belief among consumers that it is a hassle. | Customers are already able to shift, but few actually do so. Regulators have been trying to find ways to nudge customers into doing so, including breaking down a general belief among consumers that it is a hassle. |
| The Office of Fair Trading has been reviewing the way the UK's banks run current accounts, because of concerns over competition and a lack of focus on customers' needs. | The Office of Fair Trading has been reviewing the way the UK's banks run current accounts, because of concerns over competition and a lack of focus on customers' needs. |
| In a recent report, it said there was a "lack of dynamism" from the banks alongside customer inertia. | In a recent report, it said there was a "lack of dynamism" from the banks alongside customer inertia. |
| Clearing system | Clearing system |
| The OFT suggested that if customers still failed to switch following all these changes, there should be a review into bank account number portability - when customers can keep their account number even if they move to a new bank, similar to switching mobile phone providers. | The OFT suggested that if customers still failed to switch following all these changes, there should be a review into bank account number portability - when customers can keep their account number even if they move to a new bank, similar to switching mobile phone providers. |
| The chancellor also signalled plans to speed up the process of clearing cheques and other transactions. | The chancellor also signalled plans to speed up the process of clearing cheques and other transactions. |
| He said that the current system, that sees a cheque clear in six days, should be opened up, rather than being tied up between the big banks. | He said that the current system, that sees a cheque clear in six days, should be opened up, rather than being tied up between the big banks. |
| Proposals are being worked out by the government, he said. | Proposals are being worked out by the government, he said. |