* Rules letting Britons switch accounts fast begin Monday
* Government also considering industry-wide IT platform
* New rules are designed to stimulate competition
* Bankers say new 7-day account switching must work
By Matt Scuffham
LONDON, Sept 13 (Reuters) - Britain's banks are underpressure to make a success of new rules allowing customers toswitch accounts within a week, if they want to avoid eventougher government demands such as an industry-wideinformation-sharing programme.
The new rules - which aim to ensure that all outgoing andincoming payments are automatically transferred - come intoeffect next Monday as part of the government's campaign to breakthe dominance of Lloyds Banking Group, Royal Bank ofScotland, Barclays and HSBC, whichbetween them control three-quarters of UK retail accounts.
Lawmakers and regulators believe a lack of choice has been afactor behind scandals such as the mis-selling of loan insuranceand complex interest rate hedging products, which have costbanks over 20 billion pounds ($32 billion) in compensation.
The government said in June that if 7-day switching did notdeliver the expected benefits it would consider more radicaloptions, including "full account portability" - meaning anindustry-wide IT platform that would allow customers to keeptheir account details when they switch banks.
Such a move would force banks to abandon their existing ITsystems and invest jointly in a system that could be used by thewhole industry - including any new competitors, which are alsobeing encouraged by the government.
The cross-party Parliamentary Commission on BankingStandards, which was asked to make recommendations for bankreform, asked the government to initiate an independent study ofthe technical feasibility, costs and benefits of such a move.
Banking bosses are not keen on the idea: Lloyds chiefexecutive Antonio Horta-Osorio recently said it would not workand be too difficult to implement.
"If they don't get it right, political pressure will mountfor something more formal. It's in everyone's interest to makethis work," said a senior executive at one of Britain's biggestretail banks, referring to 7-day switching.
Bank customers are notoriously reluctant to move because ofthe perceived difficulties involved and a feeling that rivallenders are no different. But 7-day switching could be a gamechanger, according to surveys.
Research by YouGov, commissioned by business servicesprovider SAS, suggested around 5 million UK current accountholders will switch banks in the next year as a result of thechanges. It found that 2 in 5 customers had not switched in thepast because they believed the process to be time-consumingalthough 1 in 4 said they didn't think their current bankoffered the best customer service.
Nick Payne, retail banking consultant at SAS, said theresearch suggested consumer switching between retail banks couldincrease significantly from historic levels of 2 to 3 percent.
"Now savvy consumers can scour the market for the packagethat best suits them. Banks will now have to work hard todifferentiate their offerings, through enhanced customer serviceand targeted marketing," he said.
Mark Garnier, a Conservative member of the banking standardscommission, said lawmakers would look again at an industry-wideplatform in the next 2 years if 7-day switching is not asuccess. He said full account portability would boostcompetition and protect customers if a bank failed.