The boss of one of Britain's leading challenger banks has called for further measures to make current account switching simpler, amid concerns that momentum is being lost in the battle for market share.
Paul Pester, the chief executive of TSB, said that awareness of the current account switching system was slipping away, following some positive momentum in the first year.
The new seven-day switch service was introduced in September 2013, making it much easier for customers to switch between banks. But it has had a modest impact to date.
The number of switchers rose by about a fifth across the year, but it did not prove the revolution that had been hoped for. Only 3% of all current accounts have been switched overall, and Pester believes that more could be done to make it easier.
“We have suggested specific improvements to the Competition and Markets Authority. In particular, you still cannot switch an overdraft,” he said.
TSB has benefitted from the attention that has been paid to bank account switching over the last 18 months.
Mr Pester said the bank had attracted almost half a million new customers during 2014, with its 5% interest offer proving a particular draw.
This represents around 8.5% of the new current account market – some distance above the 6% target that the bank had set itself ahead of its planned stock market launch in June.
But a low proportion of these customers have joined using the new switch service. Evidence suggests that awareness of the system has dropped off by two-thirds.
And attention to existing complications such as overdrafts could increase the appeal of switching and boost competition between banks, Mr Pester suggests.