Bank switching scheme a failure

The number of people switching their bank account to a different bank has fallen to a new low, according to new industry figures.
A mere 57,779 people used the seven day switching service to move accounts in September, the lowest number since the scheme was launched four years ago. The drop came despite a big advertising campaign on TV, radio, national newspapers and online, which was designed to raise awareness of the scheme.
The reluctance to move also comes in spite of the potential savings on offer, and financial incentives being offered by the banks. For example, the Clydesdale and Yorkshire banks are currently offering account holders £250 to switch accounts, while HSBC is offering £200 if people switch banks and then stay loyal for a year.
The simple fact is that advertising campaigns have consistently failed to persuade people to change bank accounts - despite big incentives to switch. This means that either account holders are not convinced that switching is worthwhile OR there are other factors at play, for example people are actually frightened to switch accounts in case something goes wrong during the process.
This news will also be a blow to the Treasury, which originally said it would rely on the seven day switching scheme to improve competition in the banking sector.
According to BACS (who run the scheme) over four million customers have moved their accounts since 2013. But this is a ‘drop in the ocean’ considering the UK now has a population of around 60 million people.
The banks that are currently gaining the most account holders are Nationwide, TSB and HSBC. The ones losing the most customer have been Barclays, Clydesdale and NatWest.

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