UK Payments Council names 33 banks in new current account switching service

23 July 2013

The UK Payments Council has announced the participating banks and building societies that will be part of the government-mandated Current Account Switch Service in the UK, which launches in September 2013 and is intended to introduce more competition into the retail banking sector.

The list of participating banks and building societies, including the ‘big four’ of Barclays, HSBC, RBS, Lloyds Banking Group and their various imprints such as NatWest, the Halifax and so forth, is given below in the graph at the bottom this story. The names, including big mutually-owned building societies such as Nationwide and newcomers like Metro Bank, cover virtually all the current account marketplace in the UK.

When the new Current Account Switch Service launches in September, all of the participating banks will join the shared technology platform enabling retail bank accounts to be switched over to another bank’s much more easily and without any fees. The aim is to encourage more competition in High Street banking in the UK and make it easy for customers to change their direct debits and so forth without any obstacles being put in their way if they wish to depart a bank. A guarantee mark has been unveiled to affirm this right.

The problem of course is that full bank account portability is not being introduced under this initiative, as some have advocated along the lines of the mobile phone industry where customers now keep their cell phone number for life. The technological challenge of introducing this portable bank account number model is considerable, however, because most UK banks have siloed infrastructures and it could mean every single account holder getting a new number regardless of whether they wanted to switch.

“The Payments Council has worked closely with all of the financial institutions announced today to develop the Current Account Switch Service,” said Adrian Kamellard, chief executive of the UK Payments Council, before adding he believed the new service would “make switching account from one bank or building society to another simple, reliable and hassle-free.”

“Creating the Current Account Switch Service has involved massive systems changes on both a central and individual institution level. The new service, when launched in September 2013, will deliver a significant step-change for current account switching in the UK, leading to more competition in the marketplace and greater choice for customers.”

The Technology
The core central technology platform behind the new UK Current Account Switch Service is being run and managed by Bacs, the not-for-profit payments organisation that uses VocaLink’s automated clearing house (ACH) processing power. The shared central engine is run by them, delivering the desired central redirection service that means all payments and bank account direct debits will automatically be redirected, and the engine also oversees the general account switching element.

The technology solution operates on the well-established agency model, seen earlier with the UK Faster Payments Service (FPS), whereby a central shared platform is provided by an ACH. Each and every individual bank or building society then has to upgrade their own internal technology systems to meet the agreed standards and connectivity arrangements for the shared engine - some room is typically left for value-add ‘differentiating’ services to be added on by banks if they so choose. This agency model is of course just one of the six options outlined by the UK Payments Council in its recent Payments Roadmap Initial Report which seeks to outline the country’s payments infrastructure options over the next decade.

Key features of the new Current Account Switch Service and shared technology platform include:

• The service is free to use.
• A switch will be completed in seven working days - a substantial improvement on the current process that can take between 18 and 30 working days.
• The customer can choose and agree the switch date with their new current account provider.
• All payments going out (e.g. direct debits) and those coming in (e.g. salary) will be moved from the old account to the new account automatically.
• For 13 months payments accidentally made to the old account will be automatically redirected to the new account (as if forwarding your postal mail).
• The new Current Account Switch Guarantee means that customers will receive a refund of interest and charges on old and new current accounts if anything goes wrong during the switch.

More information about the new service is available here and all the participating banks are listed below:

Financial Institution

Bank and Building Society Brand

AIB Group (UK) p.l.c.

Allied Irish Bank (GB), First Trust Bank

Bank of Ireland

Bank of Ireland UK PLC, Post Office

Barclays

Barclays

C. Hoare & Co.

C. Hoare & Co.

Clydesdale Bank PLC

Clydesdale Bank, Yorkshire Bank

Cumberland Building Society

Cumberland Building Society

Danske Bank Group

Danske Bank (Northern Bank Limited)
Danske Bank A/s London Branch

Handelsbanken

Handelsbanken

HSBC

HSBC Bank plc, first direct, M&S Bank

Lloyds Banking Group

Bank of Scotland, Halifax, Lloyds TSB and the future TSB

Metro Bank

Metro Bank

Nationwide Building Society

Nationwide Building Society

RBS Group

The Royal Bank of Scotland, NatWest,
Ulster Bank, RBS International,
Isle of Man Bank, Coutts, Adam & Company

Reliance Bank

Reliance Bank

Santander UK plc

Santander

The Co-operative Bank

The Co-operative, smile

Virgin Money

Virgin Money

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