An advertising campaign to promote the new switching system for bank accounts will get underway in September after the government backed the £750 million transformation for British banking.
Animated characters will appear on television and print advertisements in the autumn to inform people about the new system, after the Payments Council alerted the government that the schedule for completion was on track.
The new system will allow customers to switch their bank accounts in just seven days – a quarter of the time it can currently take – and has been designed to spur competition in the current account market, which is currently dominated by just four banks.
The scheme will be backed by an automated redirection service that will ensure payments to and from old accounts are completed, as well as a switch guarantee that will compensate customers if any problems arise from the transfer.
[Read more in our guide: Switching your bank account from September 2013].
The new switch guarantee. Select for full-size (opens in new tab).
Not all banks and building societies will join the system at its launch. Tesco Bank, which has faced numerous delays to the launch of its current account, aims to join the scheme next year when its product becomes available.
But Virgin Money, in a similar situation, does plan to enlist in the switching scheme from September, ahead of its current account launch.
Competition and Outreach
Building societies and smaller banks will see this as an ideal chance to wean customers away from the big-name high-street banks that have long dominated the market.
The new system allows them to assure customers that switching accounts will be a quick, risk-free, and painless process.
Nationwide will hope to advance its recent rise in customers, after announcing earlier this year that its new range of interest-paying current accounts was attracting 1,000 customers every day (read more).
Likewise, Metro Bank will sense the opportunity to promote itself as the consumer-centric alternative to big-brand high-street alternatives.
But as banks are asked to contribute further towards advertising the new system, they will be hopeful of a better outcome than the government’s previous animated campaign for the Financial Services Compensation Scheme (FSCS).
In 2011, a multi-million pound television advertising campaign featuring animated characters left only 3% aware of the compensation measures in place for UK savers (read more).
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The unsuccessful FSCS campaign.
With the system expected to awaken the current account market from its stagnancy, it's only reasonable to expect banks to seize the initiative and appeal to customers on their own grounds in due course.
Keep updated on the latest current account offers here on Which4U.
Keith McDonald
Which4U Editor
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