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Britons unwilling to switch current accounts

Britons unwilling to switch current accounts

Category: Banking

Updated: 07/12/2010
First Published: 07/12/2010

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This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Providers face an uphill struggle to get people to switch their current accounts, new research has revealed.

Banks are always keen to add to their current account ranks as this gives them the opportunity to cross sell other products, such as credit cards, loans and insurance to their customers.

However, bank customers are notoriously reluctant to move all of their banking to another provider as the process is perceived to be complicated and bothersome.

When it comes to researching current accounts, a third of people (34%) believe it is too much hassle to switch their provider, a much higher figure than any of the other products examined.

It has resulted in some banks offering sizeable cash incentives to switch, as well as the offer of a top rate on current account balances.

The reality of switching is usually different, as providers have specialist teams tasked with making the switching process as smooth as possible.

The only people customers have to make aware they are switching is their employer, their pension provider and anybody else that regularly pays money into their account.

Despite this, more than half of UK consumers spend less than an hour researching different types of current accounts in the market, according to a study conducted by Datamonitor on behalf of Santander.

It was also found that that only one in three of customers who had switched spend more than an hour researching current accounts, but, by comparison, around half spend more than an hour researching car insurance (51%) and home insurance (47%).

It is estimated that Britons have collectively spent 3,504 years researching car insurance products in the past 12 months, compared to 1,368 years on choosing savings accounts and by comparison just 785 years deciding which current account to switch to.

"It is interesting that people take so much longer to make a decision on car insurance or a savings account than a current account," Rod Logan from Datamonitor said.

"This discrepancy is likely to result from the greater importance placed on getting a good deal for these other financial products.

"But many of these consumers probably don't realise that nowadays picking the right current account can make a significant difference to their finances too, so by potentially rushing a decision they may be missing the benefits available."

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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