According to the Irish Federation Bank (IBF), these figures help to benchmark the success of its personal account switching code, which is designed to allow bank customers to move their current accounts from one institution to another more quickly.
The figures show that, between its introduction in February 2005 and the end of October 2006, there has been a monthly average of 1,400 consumers switching bank accounts using the code, an average that would put the end of 2006 total at over 32,000.
IBS believes that the code has prompted additional customer mobility, to the extent that it now estimates the overall, effective customer mobility rate to be 4%. The company also said that the code has raised awareness of bank account mobility, allowing consumers to exercise their freedom of choice in a competitive market.
IBF’s chief executive, Pat Farrell, commented: The switching codes are all about facilitating consumer choice and enhancing competition in the marketplace. Not alone are these codes directly delivering success in this regard, they are also acting as a catalyst for customer mobility right across the board.
The financial regulator’s consumer director, Mary O’Dea, welcomed the increase in account switching among consumers and businesses, saying: Consumers now have more choice when it comes to bank accounts. The availability of free transaction banking is an incentive to switch banks, while the new codes have made the process easier.
IBF’s figures also show that over 400 business accounts will have been switched from one financial institution to another by the end of 2006 using the business switching code that came into operation in July 2006.
