Consumers and Retail Banking - UK - October 2013
“Retail banks will need to work harder than in the past to retain their customers. Heightened awareness of the new switching service and high-profile marketing campaigns will encourage more people to consider their relationship with their existing bank over the next few years. Around one in seven current account holders would consider switching providers following the launch of the new Current Account Switch Service.”
Deborah Osguthorpe, Head of UK Financial Services Research
Some questions answered in this report include:
- Is anyone interested in the new Current Account Switch Service?
- Which brands stand to gain most from the new switching service?
- Who is most likely to consider using the new switching service?
- Is there ‘no such thing as free banking’?
- Can banks rely on existing customers for product cross-sales?
People are still reluctant to switch bank accounts. They are worried about the potential for problems during the switching process. More fundamentally, many believe that the existing banks are all pretty similar, meaning that they struggle to see any real reason to switch.
Regulators, though, haven’t given up hope of creating a more competitive retail banking market. Existing banks will be keen to retain their customers in this environment, but will also be looking to attract new ones through product innovation and high-profile marketing campaigns.
The problem for anyone hoping to increase switching in the market, though, is that current account customers actually tend to be fairly happy with their existing bank. Most have little reason to switch. However, new products and services, combined with evidence that the new switching service has made moving accounts easier, should convince more people to at least consider moving to a different bank.
This report looks at the relationship between consumers and retail banks. It provides insight into the appetite for the new switching service, satisfaction with existing providers and the extent to which consumers value different aspects of the service. Product ownership and cross-selling is also considered, along with consumer use of different banking channels. Mintel’s brand research examines consumer attitudes towards the major retail banking brands.
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