An investigation into whether more people could be tempted into switching their current account if they were allowed to take their existing account number with them has been launched by the City regulator.

The Financial Conduct Authority (FCA) is looking at how effective a new service which was launched in order to take the fear factor out of moving banks has been and whether more can be done to encourage current account customers to break free from a provider they are unhappy with.

The new current account switching service was launched across the industry last September, and while its aim is to take much of the pain and nuisance out of switching providers, it does not go as far as allowing people to carry their existing account number over to their new provider.

The study will look at the extent to which being able to port your account number to another bank would encourage competition in banking, as well as what the likely cost would involve.

The FCA said account number portability could remove the need to change direct debits and standing order instructions, "which is a key area where perceived or actual problems with switching, such as missed mortgage payments, can arise".

It said customers' ability to switch between providers with confidence is "an essential element of a competitive current account market".

The regulator continued: "Increased switching, and even the potential threat of switching, should encourage firms to offer better products and service quality, leading to better consumer outcomes."

The study will also involve a new body called the Payment Systems Regulator (PSR) which will become fully operational next year and will sit alongside the FCA with a remit to encourage competition and innovation in payment systems.

The FCA will survey consumers to find out what, if anything, puts them off switching, which could include not being able to take their bank account number with them as well as other factors.

The PSR will then look at the evidence the FCA has gathered when considering any potential changes that are needed to improve the payments infrastructure.

Some 1.1 million current account customers have used the new switching service in the 11 months since it was first launched, marking a 19% increase on the number of switches recorded over the same period a year earlier.

The service has cut the length of time it takes to switch from up to 30 working days previously to just seven and outgoing and incoming payments are automatically swapped over to the consumer's new account under the scheme.

The Payments Council, which oversees the switching service, has previously argued that its initiative is a more practical and cheaper solution than suggestions that people should be able to carry the same account number with them.

The success of the switching scheme is being measured by the Council by monitoring levels of customer awareness and confidence in switching. Its most recent figures show 70% of people have heard of the service and 61% are confident about what it is and how it works.

The FCA's review, which will involve a consumer survey as well as collecting information from firms, will consider how switching levels have changed over the past 12 months, whether customer satisfaction levels have increased, and whether providers have altered their behaviour, for example by offering better products in order to hang on to customers and win over new ones.

The Government announced the plans for the review into current account switching and the study into bank account portability in this year's Budget. The investigation is expected to be concluded by next spring.

There have been some signs of competition in the current account market increasing over the last year, with several providers offering better rates of interest than a consumer would expect to get from an easy access savings account.

TSB and Nationwide Building Society both offer current accounts with a 5% rate of interest, Lloyds Bank offers up to 4% interest and Santander's 123 account pays 3% interest plus cashback on household bills.

Meanwhile, Halifax offers an account which pays £5 a month as well as paying £100 to people who switch to it and the Co-operative Bank is offering £100 to switch to it plus a £25 donation to charity.

Internet and telephone bank First Direct, which regularly tops consumer satisfaction surveys, offers £100 to switch.

New players have been taking on the high street giants, with Marks & Spencer recently unveiling its first ''free'' current account and Tesco Bank launching its first current account.

Economic Secretary to the Treasury Andrea Leadsom said: "A key part of our long-term economic plan is to increase competition in the banking sector.

"Enabling customers to move bank accounts easily, quickly and reliably is an important part of this."