By Oliver Smith on Friday 29 March 2019
Over 5 million switches, but still a long way to go.
The UK’s Current Account Switching Service, or CASS, yesterday celebrated its 5th anniversary with its annual report, boasting that it had helped 5 million people switch their bank account and awareness of the service had reached 80% of the population.
Despite the celebration, digging into the numbers shows just how far CASS and the wider financial industry still has to go.
Assuming there are around 65m bank accounts in the UK, 5m switches implies the service is only used by around 1.5% of account holders each year (that’s also assuming people aren’t making multiple switches).
Awareness may be high, but people still aren’t switching.
The blame can’t be placed solely at the feet of CASS, banks have to incentivise customers to switch, and the most successful are clearly the likes of Nationwide offering customers £100s in cash to switch.
For challenger banks, who can’t finance these kinds of switching promotions, but still have customer numbers in the hundreds of thousands, these switching figures remain a rounding error.
Jo Kenrick, chair of the Current Account Switch Service, wrote alongside the report yesterday: “Now as we look forward, we aim to make more people aware of the Service and ensure those considered financially vulnerable, know that they too can benefit from switching.”
Why awareness is still CASS’s priority is a mystery to me, as awareness is high (according to its figures), yet switching remains low.
Focusing on the financially vulnerable is a noble goal, but I’d argue is also somewhat misplaced. For those in dire straights it’s less about making any switch and more about making the right switch.
Tide’s CEO Oliver Prill last week described the work his SME bank is doing to build on CASS with new features like trial switches and digitising all the data from your previous bank so it’s not lost when your old account disappears.
It’s these kinds of features in the consumer space which would both boost switching and support the most vulnerable to make the best financial decisions.
The priority for the Switching Service shouldn’t be raising awareness or even increasing switching in general, but boosting responsible switching where consumers are happy with the outcome.
Hopefully that’s what we’ll start to see in 2019.