A record number of people switched their current accounts last month as consumers looked for the best deals.
Figures released by the Current Account Switch Service (CASS) show that nearly 125,000 current accounts were switched in March – the highest number since the service was launched three years ago.
The number of switches in the first three months of 2016 was also 20% up on the last three months of 2015.
“Increasing competition in banking is part of the government’s plan to ensure customers get a better deal,” said the minister.
“So I am delighted that the latest figures from the CASS show record levels of customers taking advantage of the service over the past three months.
The scheme makes it easier for customers to switch from one bank or building society to another – for free and within seven days.
Bacs’ CEO Michael Chambers said almost three million switches had taken place since the CASS was launched, but questioned whether the volume of switches was the most important measure.
“I’d rather look at the higher levels of competition we’re now seeing in the market. If you look at service and consumer experience, these are also important measures,” he said.
“We’ve been working hard to educate and inform consumers and small businesses through our continuing marketing activity, but we do recognise there is more to be done.”
The CASS said that since its launch in September 2013, the total number of current account products on the market has grown from 120 to 143.
At the same time, the number of banking providers has gone from 30 to 45 – a number that includes large retailers including Tesco Bank and M&S – and the Bank of England has granted licences to 21 new providers since 2012.