Complete Finance Blog

Banks are getting away with offering rubbish accounts because they know we won’t move.

The current account market is beset with lazy, uncompetitive providers, poor accounts, and customers who are too confused to consider switching accounts, according to a new report.

The Independent Commission on Banking was charged with looking at how the banking sector could improve its financial stability and competition, and last week published its initial findings in its Interim Report. And one of the most interesting sections of the report covered current accounts, and the way that we are being fobbed off with shoddy accounts and service.

It all comes down to competition, or rather a lack of it – according to the report, there have been just six new entrants into the personal current account market in the past decade, and only four have stuck around. Just two of them have managed to secure a significant market share.

With the same old names providing the same old accounts, there isn’t too much in the way of innovation taking place.

The report also highlighted that competition within the sector is stunted because of the difficulties associated with switching accounts (both real and perceived), while poor choice only worsens matters. Less than 4% of respondents surveyed as part of the Commission’s research had switched account in the past 12 months, indicative of the apathy many Brits feel towards chopping and changing their current account.

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