LONDON – 16th February 2014 – The latest TNS Current Account Switching Index reveals that Challenger* Banks have the upper hand with the Switching population, with almost 60% choosing one of this group. If this pattern continues, the risk to traditional banks is an annual combined share loss of 2% of current accounts.
The poll also shows Santander is the biggest gainer, with 22% of Switchers now choosing them compared to 17% before the introduction of the Current Account Switch Guarantee.
However, the overall number of Switchers remains stubbornly low.
While switching levels are unchanged between 3% and 4%, there is clear evidence of Switchers closing their previous account: 66% compared to an average of 50% in the last quarter of 2013.
Customer service is still the strongest reason for Switchers leaving their previous bank and financial incentives the strongest reason for selecting their new bank. Switchers continue to be highly satisfied with the switching process (81%) and with their chosen new bank (83%).
However, in light of recent branch closure announcements, it is interesting that for 1 in 4 customers, channel and logistical considerations (branch proximity and opening hours, mobile and internet banking facilities), were behind their choice of bank. TSB benefited particularly from having convenient branches.
Whilst 60% of Switchers’ choice of bank was not influenced by other product holding, there is some evidence that savings and mortgages may have some influence. 19% had a savings product with their new bank, compared to 16% with their previous bank and 8% had a mortgage with their new bank compared to 6% with their previous bank.
Maureen Duffy, CEO of TNS UK, said: “Whilst making switching easier is to be welcomed, these results show it doesn’t create a sufficient reason for customers to switch.
It may take the next wave of current account entrants, such as Tesco and Virgin, to cause customers to re-evaluate their current account product and provider. This will largely depend on how attractive or disruptive their offer is.”
Notes to editors:
TNS Omnibus interviewed a representative sample of 14,094 adults in Great Britain on four consecutive Fridays: 3rd, 10th, 17th and 24th January 2014. All interviews were conducted face to face. The data is weighted to match population totals for age, sex, social grade, working status, presence of children, 2010 voting patterns and region. For further information please contact firstname.lastname@example.org.
* Banks classified as Challenger banks are: Santander, Halifax, Nationwide, the Co-operative, First Direct, Metro & M&S
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