Why Do So Few People Change Banks?

I guarantee that virtually everyone reading this has a bank account. And I will also guarantee that the bank you have an account with is the same one you had an account with 5, 10 or 20 years ago. And for me that is Natwest, because that is who my parents opened an account with when i was a child. But in a world of huge competition and deals galore, why are so many of us welded to our particular bank? Moolr took a look at why so few people change banks.

It Pays To Change

The bank switching war has never been greater. The incentives from a raft of banks are well known and seriously tempting. The last time I checked, seven banks now pay cash or shopping vouchers to tempt you to switch. It was only three at the end of 2018, so it seems the trend is only going one way. The deals may not last long, but i am certain they will certainly be repeated at some point – early in a year seems the optimal time.

Few Are Tempted Though

According to the latest stats, there are around 70 million deposit accounts across the UK, with the average citizen having 2.4 accounts, and yet we’re only seeing a million account switches a year. That’s about 1.4% who switch, whilst 98.6% stay put. This is lower than past years, when there were fewer offers. Thus the offers are not tempting as many as they possibly expected.

Switching Is Easy

Switching bank accounts is not a stressful process. It takes just 7 working days. – All direct debits and standing orders are automatically moved to the new account. – Cash sent to the old account is moved to the new one for at least three years. Just ensure you use the banks’ official switch service. You must pass a not-too-harsh credit check.

Stubborn Customers

You would think that competition in banking would be a good thing and welcomed by the public. But the evidence suggests not. The evidence suggests customers stick to what they know. Three-quarters of banking customers do not even consider changing accounts, according to  the latest research.

Despite record levels of complaints  about banks and their services, only 7% of customers in the past two years expressed their displeasure by moving from one bank to another. A further 17% thought about switching, but decided against. To compare, 31% switched energy suppliers, 26% changed telecoms providers and 22% home insurance.

While the majority of consumers are satisfied with their bank, one-third of those dissatisfied with the service were deterred from changing accounts by the switching process. Many consumers also felt there was little difference between banks. After all, for many, money goes in, money goes out, and that’s it. They see it as a storage facility, with services offered by all banks.