Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Former MSE Helen
    • By Former MSE Helen 16th Sep 13, 8:09 AM
    • 2,324Posts
    • 971Thanks
    Former MSE Helen
    MSE News: New 7-day bank switching era begins: Full Q&A
    • #1
    • 16th Sep 13, 8:09 AM
    MSE News: New 7-day bank switching era begins: Full Q&A 16th Sep 13 at 8:09 AM
    "A switching guarantee has launched today to ensure all incoming and outgoing payments get moved to your new account..."

    Read the full story:

    New 7-day bank switching era begins: Full Q&A




    Click reply below to discuss. If you havenít already, join the forum to reply. If you arenít sure how it all works, read our New to Forum? Intro Guide.

    Last edited by Former MSE Helen; 16-09-2013 at 8:42 AM.
Page 1
  • jamesd
    • #2
    • 16th Sep 13, 8:47 AM
    • #2
    • 16th Sep 13, 8:47 AM
    As usual, banks working together to make things worse for consumers instead of better. Instead of a process where you could easily continue to use the existing account, the new process closes the old account, making the switch an all or nothing proposition, so you get maximum consumer risk instead of minimum.

    It's easy to switch current accounts without using this process. Just start to change your direct debits, credits and continuous payment authorities (not covered at all in the new system). You can continue to use your old account for as long as you like and all payments in either direction can continue to work forever, not just for the 13 months and most payment types that the new system covers.

    Instead of making it fast and easy to compare, transfer payments or credits and stick or revert we have a new system that's designed to force a complete switch of bank, which is something that banks want but which doesn't help consumers, who are better off with at least a couple of accounts.

    Get to work using new and more competitive accounts. Just remember you don't need to use the new system and close your old account. You can do it just fine by adding a new one and keeping or closing the new one depending on whether you find it's better or worse.

    I have current accounts with three banks. So if one has problems with its systems I can use the others. And I get to compare the customer and other service levels and products of each, as well as using the best deals that each of them offers to their customers.

    So when First Direct security majorly messed up (and subsequently apologised), I could use the other two.
    When NatWest systems failed, I could use the other two.
    And I get to see and compare how Santander does compared to them, both better and worse in some ways.
    I get to see how poor the new First Direct security token system is, able to compare it live with the other two that are clearly better.

    Multiple current accounts are good. Go for it. Just not with this system.
    Last edited by jamesd; 16-09-2013 at 8:56 AM.
    • heloid
    • By heloid 16th Sep 13, 9:15 AM
    • 469 Posts
    • 141 Thanks
    heloid
    • #3
    • 16th Sep 13, 9:15 AM
    • #3
    • 16th Sep 13, 9:15 AM
    The switching service isn't targeted at people who use this website. It's for the people that only have 1 bank account and any more complication is too much for them.
    You're right though, the service should never close an account. What if it's a condition of keeping your credit card, what if it provides your travel insurance and it's revoked while you're away?

    Anyway, give me bank account number portability (so I can take my main account number with me and there is no need to switch with providers or other people,1 change vs many makes sense) and one time bank account numbers for those times I don't want people to know my long time acct number. That said you should always be able to get a new acct number or attach a new one to an account you just moved your main acct number from.
    Phone companies can do it....
    • pinkdalek
    • By pinkdalek 16th Sep 13, 9:16 AM
    • 1,272 Posts
    • 759 Thanks
    pinkdalek
    • #4
    • 16th Sep 13, 9:16 AM
    • #4
    • 16th Sep 13, 9:16 AM
    A bank can still switch your direct debits/credits WITHOUT closing the old account. It is referred to as a partial switch.

    It does not however come with the 7 day switching guarantee.
    The old account does not need to be closed.
    You may not be entitled to any of the switching promotions that the new bank may be offering.
    You would not be 100% certain where you credits are going to.

    Under the new switching even if the account is closed credits sent to the old one are re-directed upto 13 months, giving the consumer less worry and plenty time to re-arrange credits that may fall outside the 13 month timescales.

    You can do it yourself, yes it isn't that difficult, but if a bank is giving you £100/£150 or 5% interest to switch and begging you to do the monkey work for you then why not let them? Plus if things do go wrong you complain like mad to them and they throw more money at you for the inconvenience!
    • DragonQ
    • By DragonQ 16th Sep 13, 9:38 AM
    • 2,031 Posts
    • 692 Thanks
    DragonQ
    • #5
    • 16th Sep 13, 9:38 AM
    • #5
    • 16th Sep 13, 9:38 AM
    I've recently done a switch via the "old" method and, whilst the DDs have appeared on my new account, they are still on my old account also. Is this normal? Do I have to cancel the old DDs manually?
    • Pincher
    • By Pincher 16th Sep 13, 9:42 AM
    • 6,516 Posts
    • 2,491 Thanks
    Pincher
    • #6
    • 16th Sep 13, 9:42 AM
    • #6
    • 16th Sep 13, 9:42 AM
    When they give you something like £100 to switch your account, they don't want you to keep the old account open. They design the process so you have no choice.

    I can open new current accounts by itself, but I won't get the £100.
    • pinkdalek
    • By pinkdalek 16th Sep 13, 10:07 AM
    • 1,272 Posts
    • 759 Thanks
    pinkdalek
    • #7
    • 16th Sep 13, 10:07 AM
    • #7
    • 16th Sep 13, 10:07 AM
    When they give you something like £100 to switch your account, they don't want you to keep the old account open. They design the process so you have no choice.

    I can open new current accounts by itself, but I won't get the £100.
    Originally posted by Pincher
    Or you can let them do it for you, get their incentive and then go back and open another current account yourself so you have your "other" bank account.
    The bank wants you to close the old account as they want you to do all your banking with them.
    Just let go.....close your old account, the bank give you nothing for staying loyal.
    If you switch credit cards frequently you are better to cancel the old one, mainly because you can go back to them after 12mths and get another offer. Principle is the same.
  • jamesd
    • #8
    • 16th Sep 13, 10:28 AM
    • #8
    • 16th Sep 13, 10:28 AM
    I've recently done a switch via the "old" method and, whilst the DDs have appeared on my new account, they are still on my old account also. Is this normal? Do I have to cancel the old DDs manually?
    Originally posted by DragonQ
    Depends on whether the DD holders sent cancel instructions when setting up the DD to the new account. If not, they will go away after a time limit expires or you can cancel them.
    • DragonQ
    • By DragonQ 16th Sep 13, 11:03 AM
    • 2,031 Posts
    • 692 Thanks
    DragonQ
    • #9
    • 16th Sep 13, 11:03 AM
    • #9
    • 16th Sep 13, 11:03 AM
    Depends on whether the DD holders sent cancel instructions when setting up the DD to the new account. If not, they will go away after a time limit expires or you can cancel them.
    Originally posted by jamesd
    Both DD companies show the new bank details so I assume they've done everything correctly and won't take two payments by mistake. The old account is meant to be closed anyway but I have no idea whether this'll actually happen or when!
  • SkyandSun
    I only have one current account with HSBC and am tempted to switch. I see that First Direct offer £125, subject to certain conditions, if I switch. Are there any other deals people recommend - any other cashback incentives, for instance? Maybe it's worth waiting a bit to see if another bank can offer more money... ?
    • DragonQ
    • By DragonQ 16th Sep 13, 11:10 AM
    • 2,031 Posts
    • 692 Thanks
    DragonQ
    The only other comparable switching offer, AFAIK, is Halifax at £100 but if you get the Reward Current Account (free) and satisfy the criteria you can get £5 monthly.

    A couple of years ago, the Co-Op offered £200 for switching. Can't see that happening again any time soon.
  • SkyandSun
    Fair enough, well £125 is a pretty good amount and I don't have particular loyalty to HSBC - though I've never had any problems with them, either. I notice First Direct also say they have a £10 monthly fee to use their banking? I definitely don't want that, as someone who is newly self-employed with not much money to spare - any new bank would have to be free to me as a user...

    So the Halifax deal offers £100 for the switch, then £5 monthly? That seems pretty good... (looking at the Halifax offer, though, you have to be paying in £750 a month to get the £5 monthly, which at the moment I am not).
    Last edited by SkyandSun; 16-09-2013 at 11:22 AM.
    • DragonQ
    • By DragonQ 16th Sep 13, 11:21 AM
    • 2,031 Posts
    • 692 Thanks
    DragonQ
    The £5 monthly reward requires £750pm deposit from an external account (or salary) and 2 DDs going out each month. It's inclusive of tax so would be £6.25pm if you don't pay tax and can be bothered to claim it back.

    You can avoid the First Direct monthly fee by opening a basic savings account and putting £1 in it.
    • Archi Bald
    • By Archi Bald 16th Sep 13, 11:29 AM
    • 9,376 Posts
    • 7,432 Thanks
    Archi Bald
    The switching service isn't targeted at people who use this website.
    Originally posted by heloid
    You might be right there - it seems certainly designed to keep people in the dark, and of the view that they should only have one current account at anyone point in time.

    The banks could have used the enormous amount of money they have sunk into bringing this new service to life for educating consumers about Direct Debits and SOs, and how easy it is to change one or all of your DDs and SOs.

    I also entirely agree with jamesd's assessment of the new service.
  • jamesd
    Both DD companies show the new bank details so I assume they've done everything correctly and won't take two payments by mistake. The old account is meant to be closed anyway but I have no idea whether this'll actually happen or when!
    Originally posted by DragonQ
    Then you should be fine and the new account used. If not, the Direct debit Guarantee protects you.
    • Archi Bald
    • By Archi Bald 16th Sep 13, 11:42 AM
    • 9,376 Posts
    • 7,432 Thanks
    Archi Bald
    I have just read the MSE article and am perplexed why MSE don't even mention that people can do their own DD/SO/incoming payments changes. MSE make it sound as if you had to use some bank switching service. Very misleading.
    • EarthBoy
    • By EarthBoy 16th Sep 13, 12:04 PM
    • 2,128 Posts
    • 1,463 Thanks
    EarthBoy
    Anyway, give me bank account number portability ......Phone companies can do it....
    Originally posted by heloid
    Phone companies can only keep your same number if you stay in the same house, or at least in the same dialling code area. You can't keep your old phone number if you move outside the area, e.g. from Bristol to Leeds. Sort codes are similar to dialling codes, and to keep them when you move banks would require a complete re-engineering of the banking system.

    It could also cause problems with payments going missing and falling through the gap when you change from bank A to bank B. e.g. if you send a payment from another account into your account near to the transfer date/time you can't guarantee exactly what time it will arrive in your account. If both banks say they didn't receive it, which one do you get to investigate?
  • jamesd
    Phone companies can only keep your same number if you stay in the same house, or at least in the same dialling code area
    Originally posted by EarthBoy
    UK phone companies routinely handle 82 million phone numbers moving around. The number of mobile phone subscriptions in the UK. The numbers have to be tracked to individual phone masts and calls routed to and from them.

    There are challenges to moving landline numbers around but just looking up a phone number and working out where a call to it should be routed should not be one of them. It's both easier and smaller scale than doing the same job for the larger number of mobile phones.

    It could also cause problems with payments going missing and falling through the gap when you change from bank A to bank B. e.g. if you send a payment from another account into your account near to the transfer date/time you can't guarantee exactly what time it will arrive in your account. If both banks say they didn't receive it, which one do you get to investigate?
    Originally posted by EarthBoy
    The one that the payment was routed from, which asks the redirection service where it sent the payment and then passes on the question to the identified recipient. The recipient could in theory be changing every few seconds, based on other large-scale systems in routine use today. Or could be different for every payer or payee, using rules-based logic set up by the customer so that some transactions involving the number go to one account and others to different account(s).

    Sometimes people just don't know that even moderately powerful commodity systems can handle a billion read database transactions a minute. Or 110 million update transactions per minute. On just eight commodity Intel servers. But that's an old version, you might find the more recent DBT2 benchmark numbers of interest.

    For context, page 436 of the BIS Red Book shows only 17.8 billion transactions by non-banks in the UK for the whole year of 2011 (that's credit and debit cards and such). Bank transactions were around 34 million CHAPS Sterling, 62 million cheque/credit and 2,394 million BACS.

    The combination of the two sets is less than six hours of work for the smaller eight server system I mentioned earlier. That system is used for things like mobile phone networks, as well as handling shopping transactions from app stores.

    Of course, there are plenty of technical challenges in the banking system, not least interfacing with existing systems. But the technical capacity to just find out where an account number should go shouldn't be one of the hard problems.

    Best to focus on the tougher problems, not just on the small numbers of transactions involved in the UK banking system and the small- to medium-scale systems that it would take to handle them. There certainly are tough problems involved, just not looking up where money should go. Auditing and fraud prevention and interfacing and... all sorts of other stuff that make it a messy problem.

    So, to get started, why not introduce a non-geographic IBAN range that always requires a per-account destination lookup to know where to route the transaction? After all, the UK banking system is already going to be using IBANs.
    Last edited by jamesd; 16-09-2013 at 1:16 PM.
    • DaveO
    • By DaveO 16th Sep 13, 2:04 PM
    • 55 Posts
    • 34 Thanks
    DaveO
    The one that the payment was routed from, which asks the redirection service where it sent the payment and then passes on the question to the identified recipient. The recipient could in theory be changing every few seconds, based on other large-scale systems in routine use today. Or could be different for every payer or payee, using rules-based logic set up by the customer so that some transactions involving the number go to one account and others to different account(s).
    Originally posted by jamesd
    I don't understand what you are trying to say here. The recipient won't be changing every few seconds because the "recipient" is a bank account and in this case it will be the "new" bank account.

    Sometimes people just don't know that even moderately powerful commodity systems can handle a billion read database transactions a minute. Or 110 million update transactions per minute. On just eight commodity Intel servers. But that's an old version, you might find the more recent DBT2 benchmark numbers of interest.
    I don't see why that is relevant either. Payments are not made in batches at the same time. Standing orders are processed in this way in the early hours of the morning but single payments can be made at any time during the defined hours of business. The capacity of the system is sized to match peak transaction volumes and the fact other systems in the world process whatever they do faster is irrelevant.

    Every payment has to be checked to see if it is subject to redirection and the current view is in any one 13 month period we will have 5% of all UK bank accounts switched via this service so 95% of payments won't be affected.

    What this means is each time a payment is made you have to search up to 5 million entries in a table for a match and 95% of the time you won't get a match.

    Sounds terrible but in computing terms searching 5 million items of data for a match is trivial so there is absolutely no need for some hugely powerful computer system or sophisticated algorithm.

    And in fact there isn't. It has been done by a simple modification to the Faster Payments System.

    Of course, there are plenty of technical challenges in the banking system, not least interfacing with existing systems. But the technical capacity to just find out where an account number should go shouldn't be one of the hard problems.
    The technical challenges of interfacing to existing systems are not great because there is essentially only one interface per-bank for payments to the FPS system and most of the money will have been spent on testing.

    So, to get started, why not introduce a non-geographic IBAN range that always requires a per-account destination lookup to know where to route the transaction? After all, the UK banking system is already going to be using IBANs.
    The redirection service is coded to work with IBAN's already but only as the simple searching it does now.

    You seem to be making the problem out to be much greater than is it because you want to retain the same bank account number and sort code or IBAN. I can't really see the need for that which would justify the much more extensive software development costs this would entail.

    Whether the new switching service will do as predicted and encourage competition time will tell but I can't see why being able to retain your bank account number and sort code would make it any more likely people would switch bank accounts.
  • jamesd
    I don't understand what you are trying to say here. The recipient won't be changing every few seconds because the "recipient" is a bank account and in this case it will be the "new" bank account.
    Originally posted by DaveO
    You're assuming that there is a rule that one account number can only go to one destination bank account. I'm not making that assumption because it is not a necessary restriction on such a system. No technical problem to have logic that says if it's an incoming transaction from x it should go to account a and if it's from y it should go to account b.

    I don't see why that is relevant either.
    Originally posted by DaveO
    It illustrates the small number of transactions handled by the UK banking system. Some people think the UK banking system is big or handles a lot of transactions, when neither is true.

    What this means is each time a payment is made you have to search up to 5 million entries in a table for a match and 95% of the time you won't get a match. ... Sounds terrible but in computing terms searching 5 million items of data for a match is trivial so there is absolutely no need for some hugely powerful computer system or sophisticated algorithm. ... And in fact there isn't. It has been done by a simple modification to the Faster Payments System.
    Originally posted by DaveO
    I agree with you that it is trivial in computing power terms. A hash or btree lookup can do it trivially.

    The technical challenges of interfacing to existing systems are not great because there is essentially only one interface per-bank for payments to the FPS system and most of the money will have been spent on testing. ... The redirection service is coded to work with IBAN's already but only as the simple searching it does now.
    Originally posted by DaveO
    Thanks, good to read.

    You seem to be making the problem out to be much greater than is it because you want to retain the same bank account number and sort code or IBAN. I can't really see the need for that which would justify the much more extensive software development costs this would entail.
    Originally posted by DaveO
    It being hard was EarthBoy's argument, not mine. I think it's fundamentally easy in computing power terms to have every account in the country redirect to any other account and have the destination change for every transaction.

    Whether the new switching service will do as predicted and encourage competition time will tell but I can't see why being able to retain your bank account number and sort code would make it any more likely people would switch bank accounts.
    Originally posted by DaveO
    Because that's easier for consumers, who don't need to tell everyone who has their details to change them. That is not limited to only direct debits and standing orders, it includes friends and family and others who have the details.

    There's a lot of focus on what the new system does but not on what it doesn't do, like tell your mother that the payment she made 14 months after you switched didn't make it because redirection stopped after 13 months. For whatever reason 13 months instead of 13 years or 130 years was picked.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

898Posts Today

6,762Users online

Martin's Twitter
  • Today's Twitter Poll: Will you be voting in tomorrows European elections? If so will it be for a party you've no? https://t.co/YJ9XqAZ8u4

  • This is a very useful and interesting, factual piece about what the PM's new Brexit proposals mean and how new they? https://t.co/qM1bCz6FZp

  • After two cancellations, I'm on the 3rd train back from Manch. Just heard its being rerouted as someone's taken tak? https://t.co/sRO4cvoWIw

  • Follow Martin