7 Day Switching; enforced closure in banking

This month sees the launch of a new government requirement forcing banks to complete an account switch in 7 days. The initiative is in response to an Independent Commission on Banking report that was published in 2011 which contained the shocking statistic that people change their bank accounts, on average, only every 26 years.

The move highlights the service industries failure to provide successful closure experiences as part of the customer lifecycle. Banking has many examples of not adequately considering closure; mis-selling of mortgages and over exposure to risk are classic examples of putting short term gains over long term service delivery.

Currently, changing bank accounts can take up to 30 days. Transferring direct debits and other regular payments seems to be an overly difficult process. Banks seem to give little acknowledgement to the fact that people’s lives change and that they might want to change their bank account.

There are plenty of examples of new businesses being created out of an industry’s poor ability to deal with switching accounts. The energy industry has seen this - comparison companies, that just deal with switching, have been created on the back of it. The mobile industry has  seen similar developments.

Making it easier for people to switch is good for customers. It opens up markets and brings competition that, in turn, fosters innovation. Making the cycle of life and death of a customer relationship healthy and active. People don’t feel trapped in to one customer relationship for an extended period of time. They should feel confident that moving an account will be about getting increased benefits - not an awful drawn out experience that they will avoid for another 26 years. 

Closure is an important part of business health. We can’t just focus on acquisition and minimal churn of customers. We have to broaden our design approach to actively consider closure experiences in services in a positive manner. 

It’s hard to sell this approach to clients - basically telling them that we should make it easy for customers to leave. The alternative, however, is that we create services that customers are trapped in, which is a defensive stance for any business. 

Creating a healthy service experience, that customers can end as easily as they start, is a confident and open business that relies on its quality of service, not a service trap without end.