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* Number of customers switching banks up 12 pct in 2014
* Santander biggest net gainer of customers in Q2, 2014
* Barclays and Co-operative Bank lost most customers
By Matt Scuffham
LONDON, Jan 22 (Reuters) - The number of Britons switchingbank accounts grew by 12 percent to 1.16 million in 2014,marking progress in the government's push to boost competition,the Payments Council said on Thursday.
Rules introduced in 2013 to ensure customers can switchaccounts within seven working days are part of a range ofmeasures to stimulate competition to Britain's dominant bigbanks, whose reputations have been tarnished by scandals rangingfrom mis-selling to rate-rigging.
"The number of people switching banks continues to grow,showing that customers are prepared to move banks to get abetter deal. This is great news for competition in banking" saidjunior UK finance minister Andrea Leadsom.
Britain's competition watchdog could impose more onerousmeasures, such as breaking up the country's biggest banks ifinitiatives such as seven-day switching fail to increasecompetition sufficiently.
The country's biggest four lenders -- Lloyds Banking Group, Royal Bank of Scotland, Barclays andHSBC -- control about 77 percent of Britain's currentaccounts, the Competition and Markets Authority said in a reportlast November.
The Payments Council, which is responsible for theaccount-switching service, published data showing how manycustomers banks gained and lost during the second quarter oflast year.
Santander attracted the most net new accounts,while Barclays and the Co-operative Bank lost the most customers.
Santander has benefited from the popularity of its 1-2-3current account, advertised in a television campaign featuringthe world No.1 golfer Rory McIlroy and Formula One championLewis Hamilton.
It made a net gain of 59,922 customers during the period.Halifax, owned by Lloyds Banking Group, was the second-biggestnet gainer, adding 15,125 accounts.
Barclays had a net loss of 22,119 customers during theperiod and the Co-operative Bank lost 19,103.
Co-op Bank lost customers last year after falling under thecontrol of U.S. hedge funds when a 1.5 billion pound ($2.27billion) capital shortfall left it fighting for survival.
The Payments Council said that 69 percent of Britons nowknew about seven-day switching, up from 59 percent at the end of2013, and that growing numbers have confidence that the processworks.($1 = 0.6619 pounds) (Editing by David Goodman)
