In light of the launch of this week’s Current Account Switching Scheme, the Liberal Democrat conference was well timed to ask at a fringe meeting: “Will competition and choice open up the banking sector?”
In short, the scheme guarantees that anyone who wishes to move their current bank account to another institution will be able to do so hassle-free in seven working days. No burden is placed on the customer and it is all underpinned by a seven-day guarantee. This is real progress from the previous 30-day process and importantly the lack of a guarantee that often saw customers doing the legwork themselves. I hope to see positive effects of the changes in the months to come.
The fringe meeting was an excellent place to start to see whether delegates, MPs and members of think tanks believe that this could stimulate a real shake up in the retail banking market. I was keen to see whether anyone attending think it will make a real difference at all?
The changes are important to the consumers as well as Liberal Democrat members. With Danny Alexander in the Treasury and Baroness Susan Kramer playing a key role in the recent Parliamentary Commission on Banking Standards, the Liberal Democrats have a stake in the wider reforms of our banking sector both now and in the months to come.
I believe the changes represent an opportunity for the existing banks, new banks and customers. For customers, the changes are very much intended to empower them. For smaller banks and building societies, this represents an opportunity for them to demonstrate their values and worth to millions of potential new customers. For the existing banks that hold the majority of the UK customers, this is their chance to show their customers why they should maintain their loyalty and improve existing services.
I think this is a positive step and shows that reform to our banking sector is moving in the right direction. However, one point I think is important to stress is that as we look to introduce long term goals; we must ensure we have the correct framework to introduce these changes. I am proud that we have been able to work with the government as well as small businesses, charities and the consumer to bring measures to the table that work for all.
From the voices on the floor, it sounds as though it will have a real impact.
The banking sector is changing and for the better. Let’s keep up the momentum for the better of the consumer.
* Adrian Kamellard is the Chief Executive of the Payments Council