One of the things that keeps people from switching banks is that it’s a pain in the ass. In Britain, they decided to do something about that:
Under orders from the U.K. government to remove barriers to competition, large and small lenders alike have spent two years and a total of about £750 million ($1.2 billion) preparing to make it possible for checking-account customers to switch banks within seven business days. Starting Monday, the banks will have to handle the process of moving accounts and making sure that automatic bill payments and money transfers are shifted seamlessly to the customer’s new bank
The experiment is being closely watched not just in Britain but also by industry officials and policy makers in the U.S., where banks aren’t obligated to assist customers who want to defect to a rival institution and the switching process can drag on for more than a month. Industry consultants said the British project could become a template for banks in the U.S. and elsewhere.
Uh huh. Sure it could. I’m sure that a year from now the finance lobby will have prepared a dozen white papers explaining what a disaster this has turned out to be for British customers, and how adopting it in the U.S. would raise costs for everyone and all but destroy consumer banking. And that will be that. After all, if banks say something would be bad for consumers, who could doubt them?
