Hassle-free way to move financial institutions

SWITCHING from one bank to another seems like a painful task that many customers simply can’t be bothered doing.

SWITCHING from one bank to another often seems like a painful task and many people simply can’t be bothered doing it.

But the banks have tried to make jumping financial institutions easier and three years ago introduced a scheme dubbed the “tick n flick”program.

This means the new financial institution chosen by the customer does all the legwork to move their new customer over.

However, since its inception only a few hundred people a week have used the service to jump banks.

Under the scheme, a person wanting to switch banks simply needs to visit their new financial institution, give details of their previous bank and the new provider takes care of shifting all their direct debits and credits from the past 13 months.

Jessica Forbes, 24, who works in the insurance industry, recently switched banks but was unaware of the program and instead individually updated her new banking details with each institution that held her direct debits and credits.

Insurance worker Jessica Forbes, 24, recently switched her daily transaction banking account with ease.

“Setting up the account was a breeze, I was able to do it all from home, I just needed my identification,’’ she said.

“I went through my bank statements and worked out what I needed to transfer across and then as it happened, one by one I would phone each company and tell them I have switched banks and could they please change my banking details.

“Surprisingly it’s all gone through pretty seamlessly.”

But she admitted it would have been much easier if she knew her new bank could do it for her.

ME’s head of deposits and transactional banking, Nic Emery, says there’s a “perceived complexity” around switching banks.

He says it’s an important product for financial institutions because often customers use an everyday account as a base before signing up to other products.

“When people actually do move they find it a lot easier than what they were expecting it to be,’’ Emery says.

“People who have their transaction account with a company are much more comfortable buying (more of their) products.”

The Commonwealth Bank said of their new customers, about 25 per cent switch across from a previous bank.

The Australian Bankers’ Association’s chief executive Steven Munchenberg says 80 per cent of customers are satisfied with their bank and aren’t looking to switch but he says a lot of people are unaware of how easy it is to do.

Australian Bankers' Association chief executive Steven Munchenberg said a majority of banking customers are happy and they don’t want to switch financial institutions.

“There is a low level of awareness of it,’’ he says.

“But it would significantly understate the number of people who are switching, they might switch because they are doing it as a broader process such as signing up to a mortgage.

“They may have also been those who have chosen to switch themselves (and not use the tick and flick program).”

HOW TO SWITCH BANKS

— Look for an account that has cheaper fees or a better product.

— Before you open a new account read all the terms and conditions.

— Ask your new bank to help you to switch. They will contact your old bank to get a list of all your direct debits and credits from the past 13 months.

— Your bank will give you this list and you can select which debits and credits you wish to move to your new bank.

— You can authorise your new bank to give all of the relevant payees your new account details.

— Once all these debits and credits have been moved over you can close your old account.

Source: MoneySmart.