LONDON – 5th January 2014 – The traditional High Street banks may be beginning to consolidate their customer base under the new current account switching regime, according to a new survey from TNS.
The latest TNS Current Account Switching Index also shows that reputation and customer service were more important reasons for choosing a bank in December than they had been in October and November, the first two months of the new current account switching rules.
The study shows that the numbers choosing to switch to the big traditional banking names were roughly in balance with those taking their accounts away. The exception was HSBC – 14% of all switchers out of banks in December were from HSBC, which attracted only 2% of all joiners. The corresponding figures for November were 11% and 4%.
Among the other big names, Lloyds TSB recovered from 20% of leavers and 15% of choosers to 17% of leavers and 15% of choosers. Barclays and NatWest moved from small negative positions to equilibrium.
The main gainer continued to be Santander, with 19% of choosers and 8% of leavers, though this was weaker than the 21% and 9% respectively recorded in November. One third of those leaving Santander cite poor customer service as one of the principal reasons, the highest proportion for any current account provider.
Co-operative Bank moved into a negative position in December, with 3% of choosers and 4% of leavers, reversing the November position. However, given the small movement and the small number of customers involved, it is too soon to draw conclusions about what damage may have been done by the recent scandals surrounding its previous leadership.
Poor customer service continues to be the main trigger for a decision to leave a bank – 25% cited this as a significant factor in December, up from 22% in November, while customer service as a reason to choose also rose, by three points to 14%. A good reputation was more important as a factor in choosing a new provider, with 16% citing this, up from 12%, while 4% cited reputation as a reason for leaving, up from 2%.
The rise in importance of these factors brought a corresponding drop in the influence of interest rates, rewards and offers on switching decisions. Logistical factors – the availability of a local branch and/or convenient opening hours – held steady as an important reason to choose (22%).
In spite of its recent troubles, reputation and customer service remained strong factors behind the choice of the Co-operative Bank – First Direct was the strongest performer on these dimensions.
More than 70% of switchers to the traditional banks cited either logistical considerations or reputation/expectation of better customer service. But HSBC lagged in this group, with just half of switchers mentioning these factors.
For those joining Santander and Halifax, rewards and offers were most commonly cited.
For the first time since the new switching rules were applied in September, more than half of switchers – 58% – closed their previous account.
Maureen Duffy, CEO of TNS UK, said: “It is impossible to draw firm conclusions from a single month, and we will have to wait to see whether the improvement seen by the traditional banks in December can be sustained. It may be that the traditional banks are working harder to give their customers no reason to leave.
“We now have a full quarter’s data since SWITCH. The picture will become much clearer by the end of March 2014 when we will have another quarter’s data and may then be able to see trends emerging.”
Notes to editors:
TNS Current Account Switching Index is a UK study conducted by TNS UK.
Data quoted is among banking customers: (1) cumulative data runs from 8th July to 10th December 2013 (50,329 interviews); and (2) data for this wave only is for the period 13th November to 10th December 2013 (12,154 interviews). For further information please contact Tom Lynch.
TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and stakeholder management, based on long-established expertise and market-leading solutions. With a presence in over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands individual human behaviours and attitudes across every cultural, economic and political region of the world. TNS is part of Kantar, one of the world's largest insight, information and consultancy groups. Please visit www.tnsglobal.com/uk for more information.
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