LONDON (Reuters) - Britain is reviewing whether bank customers should be allowed to switch lenders using their existing account number in a bid to boost competition, as in the mobile phone market.
The Financial Conduct Authority (FCA) said on Tuesday its review would look at the effectiveness of a key change introduced last year: allowing customers to switch accounts within seven working days.
The review will also look at so-called portability, or going a step further to allow people to keep their account number even if they move to another bank, just as they can when they switch mobile phone providers.
“It could also remove the need to change direct debits and standing order instructions, which is a key area where perceived or actual problems with switching, such as missed mortgage payments, can arise,” the FCA said in a statement.
High-street banking in Britain is dominated by just five lenders: HSBC, Lloyds, Barclays, RBS and Santander UK.
So-called challenger banks such as Virgin Money and Aldermore are starting to make inroads but too slowly for lawmakers.
“A key part of our long term economic plan is to increase competition in the banking sector. Enabling customers to move bank accounts easily, quickly and reliably is an important part of this,” Andrea Leadsom, a junior UK finance minister, said in a statement.
The review of the existing switching service and possible introduction of account number portability will be concluded in the first quarter of 2015.
Reporting by Huw Jones; Editing by Mark Potter