Six out of ten Germans would like to change their main bank. only 20 percent, however, actually do. Hence, for any German, a divorce is more likely than switching their bank accounts. In 2014, according to the German Federal Statistical Office, almost every second marriage in Germany ended in divorce. Getting a divorce is just as likely as switching your electricity provider or phone company. So why are Germans so reluctant to switch their bank accounts? “Simply put, switching your bank account is too much of a hassle. Even though most customers are unhappy with their bank, the effort, that comes with switching an account, keeps them from doing it”, states Matthias Eireiner, Managing Director of the FinReach GmbH.
The German Federal Government has developed guidelines, coming into effect in 2016, which aim to reduce the effort connected with switching a bank account. In the future, customers will not be required to manually change direct debiting schemes and standing money transfer orders. Instead, the banks will now take over these procedures. The customer will only have to get in touch with one organization: the new bank. Hence, the effort and thereby the barriers, that keep banking customers in Germany from switching their account, will be reduced.
With banks beginning to feel pressured through the federal guidelines, many have now started to think about simplified account switching. On the other hand, Start-Ups have already created suitable one-stop solutions: the Berlin-based company FinReach uses technology to enable account owners to switch from one bank to another within five minutes. The service automatically moves direct debiting schemes and standing money transfer orders and is easy-to-use on smartphones and tablets.
FinReachs technology autonomously recognizes all payment records on any given bank account, thus, enabling bank customers to comfortably transfer all relevant information to the new bank. The only thing left to do is to provide the new account information to current receivers and senders of payments. Thereby, FinReach not only increases the financial mobility of all customers, but also the chance for banks to quickly gain new customers.