30 September 2013
More than a quarter (27 per cent) of customers won’t switch their current account to a new provider because they think it will be too much hassle, according to new research from Nationwide Building Society*.
In fact, one in ten (10 per cent) say they are more likely to split from their partner than they are to break up with their bank. A weary 13 per cent will actually put up with more hassle from their bank than they would ever tolerate from their partner.
This lack of movement comes despite a seeming dissatisfaction with many current account providers. Nationwide found that 14 per cent of customers feel frustrated and 8 per cent are left disappointed when dealing with their bank. One in five (20 per cent) believe their bank is only interested in them when it is trying to sell them a new product. For more than half (54 per cent) of people, banks are “just a service” they have to use.
There would be a willingness to switch if it was simple and easy to do. 29 per cent of people told Nationwide they would move their current account to a new provider if there were a service that did the switching for them. The survey findings follow the launch of the Current Account Switch Service, a new service involving most the UK’s main banks and building societies designed to simplify the process of moving your current account.
Nationwide found that while 36 per cent of people often change their insurer, 13 per cent constantly move their utility provider and 8 per cent frequently switch their mobile phone provider, only 2 per cent of customers regularly move current account providers.
Unsurprisingly, the vast majority of people (89 per cent) said poor customer service and mistakes would make them break up with their current bank, with over a quarter (26 per cent) saying better products would make them switch to another provider. A further nine per cent would move to an organisation with a better reputation than their current bank.
Phil Smith, Nationwide’s Head of Current Accounts, said the research showed that many customers were keen to break free of their existing bank relationship. He explained: “Although more than half of the people we spoke to view their existing bank as “just a service”, only a fraction of people are actually bothering to move their current account because they can’t face the stress they believe it is going to cause. It’s already really straightforward to switch to Nationwide, but the new Current Account Switch Service will give consumers more confidence about the process and will give those fed-up people the nudge they need to move.
“But no matter how important it is, simpler switching is just part of the issue. Our research found that when people consider moving they want to switch to a current account provider that gives them better customer service and features, such as rewarding loyalty, offering added benefits and giving people a choice in how they do their banking. These are things that Nationwide Building Society is already offering across our range of current accounts, which is why we have already seen hundreds of thousands of people move to us**.”
When people were asked what were the main things they were looking for in a current account, Nationwide’s research found:
- 60% of people wanted good customer service
- 34% of people wanted a provider with a good reputation
- 28% of people wanted rewards for their loyalty, such as special mortgage rates
- 23% of people wanted added benefits like travel insurance
- 53% of people wanted an account that paid interest on their money
- 57% of people wanted an online bank
- 9% of people wanted mobile banking
Nationwide has a range of current accounts including:
- FlexAccount¹ – an account with no monthly fee offering free European travel insurance (conditions apply)
- FlexDirect² – a no monthly fee, self-service account by telephone or online paying 5% AER (4.89% gross p.a.) fixed for 12 months on in credit balances up to £2,500 when customers pay in £1,000 per month (excluding internal transfers)
- FlexPlus – a packaged current account offering 3.00% AER (2.96% gross p.a.) variable in-credit interest on balances up to £2,500 and a comprehensive range of benefits, including commission free cash withdrawals abroad, worldwide family travel insurance, worldwide mobile phone insurance and UK and EU breakdown cover (conditions apply). All for a monthly fee of £10
Notes to editors:
* Research carried out amongst 1,000 adults during August 2013 by Atomik Research on behalf of Nationwide Building Society.
** Nationwide opened over 365,000 current accounts in the 12 months up to April 2013 and 123,000 customers switched their main banking relationship over the same period. Nationwide’s total current account base has risen to 5.2 million and its market share of main standard and packaged accounts is 5.7%.
¹ The European travel insurance offered with the FlexAccount is underwritten by U K Insurance Limited.
To qualify customers must be aged 16-73 and hold a Flex Account with a Visa debit card (not cash card+), and:
• Have been paying in £750+ (excluding internal transfers) a month for the last three months; or
• Complete an account switch to us (from a non-Nationwide account) using our Current Account Switch Team.
To maintain Travel Insurance cover you must pay in £750+ each month.
² FlexDirect requires minimum monthly funding of £1,000 (excluding internal transfer). Credit interest is not paid in any month the minimum monthly funding is not met. After 12 months the rate reverts to 1% gross p.a/AER variable. Interest is paid monthly. Rates may be withdrawn without notice.
FlexPlus Insurance Policies:
Worldwide travel insurance – provided by UK Insurance Limited
Mobile Phone Insurance – arranged for Nationwide by Lifestyle Services Group Limited and underwritten by London General Insurance Company Limited.
Breakdown cover – provided by Britannia Rescue and underwritten by Liverpool Victoria Insurance Company Limited
Customers must be aged 16 to open a FlexAccount and 18 to open FlexDirect or FlexPlus.
Further details on all Nationwide current accounts can be found here
About Nationwide Building Society
Nationwide is the world's largest building society as well as one of the largest
providers and a top-three provider of
mortgages in the UK. It is also a major provider of
Nationwide has around 15 million members.
Customers can manage their finances in a branch, on the telephone, internet and post. The Society has around 15,000 employees. Nationwide's head office is in Swindon with administration centres based in Northampton, Bournemouth and Dunfermline. The Society also has a number of call centres across the UK.