The future of the UK current account switching market – entering a period of transition

Ten years ago this week, The Current Account Switch Service was formed. Its purpose was to ensure that those who wanted to switch their current account could do so in an easy, free and guaranteed manner. Ultimately, the intention was that this would lead to greater competition in the banking sector and better consumer outcomes all round.

Over the past decade I’m proud of all that we’ve achieved, helping millions understand that switching is an option for them, should they find a current account product that suits their needs better. In that time 9.6 million switches have been completed through the Service, helping consumers and small businesses, including charities and trusts. Along the way, we’ve learnt a number of valuable lessons, which you can find outlined here.

Recent history has seen a huge number of macro-economic changes, and the market we find ourselves in now is drastically different to the one in which the Service was created. We anticipate the next decade will bring about just as much change, if not more, and we’ve been preparing accordingly. Indeed, that’s why we’ve recently commissioned a report titled ‘Exploring the Future of Switching’ in partnership with Davies Hickman which you can read here.

Here are four key areas that we believe will impact the switching market over the next decade.


#1 – Wider macro-economic forces

The past few years have been unpredictable at best from an economic perspective. From the impact of COVID-19 and the war in Ukraine on a global level, through to the rising cost of living and political shift in the UK, a great transition has been underway. A transition that we believe will continue.

There’s a lot to unpack here, so I wanted to focus on a few key points that fall under this umbrella, trends born out of this so-called constant state of ‘permacrisis’ that could impact the switching market.

Firstly, there’s the rising cost of living. While analysts disagree on just how much ‘rising’ is left to be done, there’s certainly consensus that budgets will continue to be squeezed in the coming years, and decisions around finances will be forced in a way they haven’t been before. Switching current account to one that either offers an incentive that’s suited to you, or one that can help you manage your money better during these high-inflation periods could become more front-of-mind as a result of this.

Secondly, as budgets get tightened we’re seeing a decline in brand loyalty – particularly amongst younger demographics. Indeed, as outlined in our ‘Exploring the Future of Switching’ report: “Our research shows younger consumers are more likely to switch with 47% of Gen Z saying they intend to switch some financial products due to the cost of living (average 39%). Desk research shows that Gen Z are likely to have been more exposed to personal financial literacy education. This could influence them to switch financial providers when they are not happy with their provider or if they can find a better deal for their current account.”

It remains to be seen whether trends such as ‘the transition towards a cashless society’ will come to the fore. However, regardless of which particular features you are looking for in your current account, you can switch via the Current Account Switch Service to ensure you’re banking with the right provider for you.  

#2 – Regulation and governance

Financial services regulation in the UK is, as it should be, constantly evolving and adapting to ensure that consumers are protected at all times while innovation within the market is encouraged. In our research, we found that providers agree that future banking regulation will drive an increase in switching and the regulator may take an even more active role than it already has in fostering competition within the banking market.

As outlined in our ‘Exploring the Future of Switching’ report: “Upcoming regulation such as Consumer Duty indicates more consumer protection particularly for the vulnerable. As most consumers and SMEs are not aware of future regulations and governance initiatives this topic was not included in our surveys, but future governments are likely to return to the topic of competitive markets in personal finance. Overall, there is high agreement that the ‘Regulators promote switching' trend will increase switching.”

Alongside increased promotion from regulators, we are also keeping a close eye on Open Banking and Open Finance adoption. The impact of both is yet to be fully realised in the UK. From a switching perspective there are two considerations, given both Open Banking and Open Finance help financial institutions understand customers better. Firstly, as these initiatives get rolled out, we could see switching accounts become more appealing as potential new financial partners can offer more tailored solutions to individuals and businesses that better suit their needs. However, the flip side is that current providers understand their customers better, and can adapt their offering on an individual basis, making switching potentially less appealing.  

#3 – Emerging technologies

Late last year, AI made quite the impression. For the first time, it felt like a future where AI was part of everyday life was within our grasp. Regardless of whether on a personal level you think this is a positive or negative development, one thing’s for sure – the financial services sector is already being disrupted by AI and will continue to be so. While it’s still very early days on this front, there is potential for AI to increase switching in the market.

As outlined in our ‘Exploring the Future of Switching’ report: “Customers will be able to instruct Alexa-like virtual AI devices to identify offers and manage the switching of financial services products. This will reduce effort for consumers and SMEs, if it works well.”

But moving away from AI specifically, new technology continues to disrupt the financial ecosystem – largely in a positive way. In our report all providers, particularly fintechs, were positive about the beneficial influence of the digitalisation of banking processes on switching. Digitalisation of front and back-office processes reduces the costs, effort and barriers required to switch for both consumers and providers.

#4 – Industry competition

Over the past decade, competition in the banking ecosystem has increased, as new players come into the fold and technology continues to differentiate providers. This is hugely positive for the sector overall, giving consumers as much choice as possible when choosing a current account that suits their needs best.

We’ve already started to see ‘Big Tech’ make headway in the financial services market, and this is a trend that we’re fully expecting to continue over the course of the next decade. More competition in the market is positive, and analysts believe that because people are already so familiar using ‘Big Tech’ products, the opportunity for these businesses to cross-sell financial products will be huge. Particularly for younger generations, there’s a huge opportunitiy for tech companies to play in the banking space. Indeed, in our research one participant commented: “If Google came into the market, it could be more effective than all the activity of the rest of banks and comparison sites.” Furthermore, desk research used in our report noted: “Big Tech will offer banking products that compete on convenience and may be easier to use than traditional banks. Other desk research sources confirm that Big Tech is advancing and will change the processes of financial services providers by using cloud technology, AI and metaverse innovations such as augmented reality and virtual reality.”

Alongside ‘Big Tech’ we also expect so called “challenger banks” to continue gaining more of a foothold in the market over the next decade, as well as price comparison sites expanding their offering. We believe all these factors may lead to a more competitive and active switching ecosystem.

Our goal is to ensure that The Current Account Switch Service continues to play a critical central role in the wider ecosystem. We’ll still be there to ensure that those who want to switch current accounts to one that suits them better can do so in an easy, free and guaranteed manner - just as we have been for the past decade.

As always, any thoughts, questions or comments we’d love to hear them. You can get in touch with us via