The Treasurer has released Mr Fraser’s report, Banking Services: Cost-Effective Switching Arrangements, and has announced the Government accepts his recommendations in full.

Mr Fraser concluded that costly solutions were not required — and could not be justified — to address the kinds of problems being encountered.

“Implementation of full account portability … would be far from simple, and not at all analogous to telephone number portability as sometimes suggested. It would involve the replacement of the bank, state, branch (BSB) system of numbering, and wholesale revamping of the existing payments infrastructure and the systems of all the financial institutions which interface with it. It would be a major and costly undertaking.”

Instead he recommended some simple and cheap switching arrangements which could be implemented fairly quickly which would make it easier for customers to move accounts:

• A single form (paper and/or electronic) signed by the customer and authorising the new banking provider to effect the transfer of all direct debits and credits to the new transaction account. Customers, institutions and billers and other third‐parties would all need to agree on a form which would adequately protect their various legal, security and privacy interests.
• Recent changes to the Anti‐Money Laundering and Counter‐Terrorism Financing Act are expected to assist banks (and other financial institutions) to verify a customer’s identity over the internet. This will enable customers and financial institutions to undertake more of their interactions online, and assist particularly smaller institutions (and those without extensive branch networks) to compete more actively.
• Consideration should be given to broadening the proposed scheme to small businesses.
• Incorporate a section on the new switching arrangements in the codes of practice that are already in place for the banks and (separately) for credit unions and mutual building societies. Alternatively, a separate, stand‐alone code confined to the new scheme could be formulated and endorsed by all participating institutions, with inputs from regulators, consumer bodies and biller groups.
• Appropriate reporting and monitoring procedures for the proposed scheme.

The Government will establish a Treasury-led working party including industry, consumer groups and other stakeholders to finalise the details of the new service to be introduced on 1 July 2012, including whether it can be extended to small business customers.

The new deposit account switching service will be reviewed after two years.