The latest current account switching figures show almost 5 million people have switched, but 2017 saw some of the lowest numbers since the scheme was launched four years ago. Triodos Bank is acquiring switchers who are highly motivated by a sustainable product offering, including a banking app that shows you where your money goes.
BACS – which runs the Current Account Switch Service – have promised to improve the scheme after a review by the Competition and Markets Authority (CMA) that found that a small number of banks still overly dominate the market. Following a high profile advertising campaign, awareness of CASS is said to be as high as 80 per cent, but the review showed that low customer engagement, lack of comparative information and complicated charging structures are ultimately resulting in ineffective competition. That means it is the older and larger banks that do not need to work very hard to gain and keep customers.
However, with only 35 per cent of British consumers believing that banks work in their best interest, some motivated switchers are now focused on the environmental and social impact of their current account provider.
Eilidh Sinclair from Glasgow is a recent switcher to the Triodos Ethical Current Account: “I now know enough about the world that I’m willing to go the extra mile as long as the result is a better outcome for the environment or society. I’ve been looking for a bank that reflects these values for a long time, and when I heard about the new Triodos current account I jumped at it. Now every time I use my debit card I am reminded of how money can have a positive impact.
“The current account switch service was incredibly easy. I think many people just stick with the bank account they’ve had since they were a kid. Once you start to think about what your bank is doing with your money it makes you question things a bit more and I think it will motivate more people to switch.”
Research released earlier this year by Triodos Bank found that more than half (56%) would also switch if they found their money was being lent in areas which negatively affect people or the environment. Meanwhile, 72% think banks need to be more transparent when it comes to disclosing where savings are lent.
The award-winning Triodos current account became available in 2017 and is part of the CASS scheme, making it easier to switch with all direct debits, standing orders and payments in and out automatically transferred. In a direct challenge to the myth of ‘free banking’, the account has a £3 per month charge to cover the cost of the service. Whilst arranged overdrafts are available, Triodos will not allow unarranged overdrafts, thus removing the risk of high penalty fees.
“The current account market is dominated by a small number of large banks and the latest low switching figures are proof that people aren’t motivated by small differences in traditional product offerings. The response we’ve had to our new current account so far indicates that people are motivated to switch banks—they just needed a bank to reflect their values,” said Bevis Watts, Managing Director of Triodos Bank UK.
“We want people to really think about what their bank is doing with their money. Money doesn’t have to be invested in the arms trade, fossil fuels and tobacco – it can be used to do good and help build the society we want to live in. For many years now, you have had the opportunity to align your values with the food you choose to buy, the transport you take, and the energy you consume. Now you have that choice with your daily finances.”