TNS RESEARCH FINDS BANKS OFFERING ‘REWARDS’ ARE GAINING TWICE AS MANY CUSTOMERS AS THEY ARE LOSING

13th September 2013

And 1 in 4 consumers already aware of the Payments Council Switching Initiative - click to download infographic; scroll down for press release.



 

Leading research organisation TNS will be launching its new monthly Current Account Switching Index to monitor switching levels amongst the UK leading retail banks at the end of September. Ahead of this, TNS has taken a temperature check of the current mood towards switching and the level of awareness of the new Payments Council initiative, aimed at easing the process of moving current accounts.

Even before it launches on 16th September there is considerable awareness of the scheme, with a quarter of the UK (26%) claiming they know of it, compared to just 15% in June of this year. Knowledge is highest amongst older consumers (36% of 65+ compared to 13% of 16-24 year olds) and the ABC1 social classes (30%).

 

Levels of ‘switching’

Only 4% of consumers surveyed have switched accounts in the last 12 months and within this there have been no absolute winners. However, the financial institutions offering immediate or longer term financial 'rewards' are attracting twice as many new customers as they are losing existing customers, whilst the traditional big four High Street banks have 50% more people leaving them than joining them. It will be interesting to see if the picture changes with the launch of the Payments Council's initiative and if this creates a group of 'serial switchers' chasing the best deal.

 

Switchers to...

Switchers away...

Big Four (HSBC, Barclays, Lloyds, RBS) 

37% (103)

60% (168)

Offering rewards (Santander, Halifax and Nationwide)

45% (126)

24% (68)

*This data has been collected across six weeks amongst 8,258 consumers 


Customer service levels by far the biggest reason for switching

When we look at the reasons behind these switching levels it is clear that ‘poor customer service’ is the biggest trigger for people to move away from their current bank, with customers citing this on a fifth of all occasions.

Poor customer service

21%

Low interest on credit balances

8%

Overdraft charges

8%

No rewards

5%

Branch opening hours

3%

No branch near me

2%

Poor online banking

2%

Poor reputation

2%

When we look at why people are drawn to a new provider, there is a considerable spread of reasons given; some around better reputation, higher interest rates, and a significant 10% of people have been incentivised by special offers.

Reputation

12%

Higher rates

11%

Special offers

10%

Customer service would be better

10%

Rewards

9%

More convenient branches

8%

Online/mobile banking

4%


Consumers highly satisfied with the switching process, other than the overlooked grey market

We also asked consumers how satisfied they were with the switching process and the news was overwhelmingly positive with 82% of people satisfied with their experience - and only 10% dissatisfied. However, this figure rises to 27% for over 65s which indicates that retail banks may not be sufficiently addressing the needs of the grey market.

Maureen Duffy, CEO, TNS UK said: “Today 1 in 4 people are aware of the Payments Council Switching Initiative – a figure that looks certain to increase on the 16th of September. Of those people who have switched accounts recently, 1 in 3 were aware and therefore may have been influenced by the scheme. However, once there is more demand and structured communication then we would expect the influence to be even greater.”

However, whilst the Payments Council scheme may act as a catalyst for people leaving their providers, the primary concern for any retail bank should be to do everything they can in their power to prevent switching in the first place. It would appear addressing customer service levels should be a priority.”


TNS Switching Index

From the end of September, TNS will be running a monthly Switching Index, which will aim to provide a clear understanding of how consumers are reacting to:

-          Switching initiatives and if these are motivating people to move current accounts

-          The bank they are choosing to move from and to 

-          The level of satisfaction of their switching experiences

-          Motivations and macroeconomic factors impacting switching

For more details of this index or to subscribe to our first issue please contact Rosi.McMurray@tnsglobal.com or call 020 7656 5303.


Notes to editors:

TNS Current Account Switching Index is a UK study conducted by TNS Omnibus, interviewing 8,258 banking customers, between 12 July and 20 August 2013. For further information please contact Rosi.McMurray@tnsglobal.com.


About TNS

TNS is the world's largest custom research company – we have more conversations with consumers than anyone else. Our service to clients is entirely focused on generating insights that lead on to actions that they can take to drive the growth of their business. TNS has a deep understanding of the financial sector, with expertise in more than 50 countries. So each year, we conduct more financial sector research than anyone else, across the private and public sector.

 

About Kantar

Kantar is the data investment management division of WPP and one of the world's largest insight, information and consultancy groups. By connecting the diverse talents of its 13 specialist companies, the group aims to become the pre-eminent provider of compelling and inspirational insights for the global business community. Its 28,500 employees work across 100 countries and across the whole spectrum of research and consultancy disciplines, enabling the group to offer clients business insights at every point of the consumer cycle. The group’s services are employed by over half of the Fortune Top 500 companies. For further information, please visit us at www.kantar.com.