The European Commission (EC) has published a report which identifies obstacles customers encounter when switching bank accounts at a national or EU level or when opening bank accounts cross-border. It also provides the EC with recommendations on how the identified difficulties could be addressed. The report is part of the commission’s current efforts to improve retail financial services for EU consumers.
EU internal market and services commissioner Charlie McCreevy said: Customer mobility is a key factor in boosting competition in retail financial services markets. I am pleased to see that the group’s report contains a rich pool of ideas on how customer mobility in relation to bank accounts could be improved. The commission considers the group’s report as a very important contribution in the preparation of its own policy decisions in the area.
Four main obstacles to switching bank accounts were identified: information asymmetry and non-transparency of prices, administrative burden, bundling and tying and closing charges. To address all of the obstacles identified, the group came up with 37 recommendations.
UK banks have particularly welcomed this move and commenting on the initiative, chief executive of the British Banker’s Association, Angela Knight, said: UK banks support EU initiatives to give customers greater choice and freedom. I believe the UK already leads the way in helping people move from bank to bank. We have a model here which would help cut out unnecessary red tape and give customers a fast, safe and effective way to move their account.
