The Current Account Switch Service recently celebrated its fourth anniversary, having been launched in September 2013 and, in that time, over 4 million accounts have been switched. This includes around 100,000 small businesses whose owners have taken advantage of the simplicity and reliability of switching business accounts to another bank or building society.
And that is the first important fact to consider. The service was intentionally designed to be just as attractive to SME business account holders as it is to personal current account holders.
‘Transparency’, ‘competition’ and ‘choice’ are the watchwords guiding the development and implementation of the service. For too long, SMEs felt unable to get the best deal available due to the complexities involved in switching to a new business banking provider, which were perceived as too daunting and onerous for the majority of small business owners to be considered as a serious option.
Given this, it is hardly surprising that small business owners have traditionally viewed switching business banking providers with a jaundiced eye. Moving important payments manually and having to inform suppliers and customers of a change in account details made the idea a non-starter for many.
Thanks to the Current Account Switch Service, all that has changed. If small business owners want to vote with their feet and find a new home for their businesses’ cash, they can. And the once daunting process is now simple, reliable and stress-free.
The switching process is now so streamlined and efficient that 99.3 per cent of switches have been successfully completed within seven days, and the service has achieved a satisfaction rate of 93 per cent. And those figures include SMEs.
Business account switching – how it works
If you are thinking about switching but are harbouring concerns, this is how it works. First of all, decide which bank or building society you would like to move your business account to. Then go through the normal account opening process with them stating that you want to use the Current Account Switch Service.
And, the good news is that, following changes implemented by 18 banks and building societies across the industry in January 2018, the process of opening a business account has now been simplified. Led by UK Finance, the industry body which represents banking organisations in the UK, the move means that you will know exactly what documentation you will need in order to open an account. There will be no nasty surprises.
Once your new account is open, the switching service will swing into action and, within seven working days, all your old account activities, including all your payments in and out, direct debits and standing orders, will be seamlessly switched to your new account. You can even nominate which day of the month you would like your new account to be fully operational.
Importantly, any payments sent to your old account by mistake will be automatically redirected to your new one, indefinitely if required, giving businesses confidence that none of their regular payments will be adversely affected because of a switch. And, if any payment is made using the old account number and sort code, the payer will receive a message notifying them of your new details. You will need to have fewer than 50 employees and have an annual turnover of less than £6.5 million. If your business meets these criteria, the rest is plain sailing.
Until the switch is completed all the services you have enjoyed on your old account will remain unaffected and there will be no interruption in banking provision. So confident is the Current Account Switch Service that the transition from the old to the new account will be seamless that it comes with a guarantee. This means that, in the unlikely event of any issues, your new bank or building society will put it right – and that is guaranteed.
Bacs’ Director of Product and Strategy, Anne Pieckielon, pictured left, said: “We have worked tirelessly since the Current Account Switch Service first launched to put SMEs and consumers at the heart of everything the service is meant to be. Only by doing this can we truly offer a service which delivers the best outcomes for all and, thanks to these efforts, it is seen as an example of best practice by those here in the UK and overseas.
“To help us in achieving this, we have commissioned extensive research – and will continue with this programme going forward, so that we can further understand the needs of SMEs and make sure their requirements are embedded into everything we do. We have also worked collaboratively across the industry, using our unique position and experience as a catalyst for change and the Current Account Switch Service is a shining example of this.”
Who runs the Current Account Switch Service?
One question that sometimes crops up is: ‘Which organisation is behind the Current Account Switch Service?’
Well, it may surprise you to learn that the switching service is owned and managed by one of the most trusted brands in the UK’s financial services sector – Bacs Payment Schemes Limited (Bacs), the organisation behind direct debit and Bacs direct Credit in the UK.
As nine out of ten of the population have at least one direct debit commitment, and with 90 per cent of the UK’s workforce paid by Bacs direct Credit, it is hardly surprising that they should be the custodian of the switch service.
Although nearly 50 banks and building societies have signed up to offer the service to their customers, it is managed impartially by Bacs to ensure that the needs of consumers and SMEs are put at the centre of decisions relating to its day-to-day operation.
As a small business owner there are many things which might keep you up at night but, thanks to the ease and reliability of the Current Account Switch Service, moving your business account needn’t be one of them.