7-day bank switching could fall flat
16 Sep 2013
16 Sep 2013
This service is meant to make it quicker and easier for consumers to change bank accounts.
While most of the UK banks are gearing up for this with cash-back offers and other incentives to tempt customers away from their existing banks, our research shows that this may not be enough to convince consumers to make the switch.
A Usurv survey we commissioned of 1000 UK Current Account holders, and our experience of working with current account customers over the last few years, tells us that the new rules are unlikely to trigger a gold-rush of new customers unless the banks address far more fundamental issues around the differentiation of their current account offerings, especially when it comes to the level of service and the experience of being a customer.
The most commonly cited reasons in our research for switching banks are for having received bad service (28% in our Usurv survey), or being charged excessive or unreasonable fees and interest rates (33%). So in theory, the new 7 day switching service is a good thing for the consumer. If you don’t like the service you are getting from your bank, it is now quicker, easier, and less stressful to change your bank.
However, although a third of our survey had fears about the hassle involved with switching, our research also revealed that a far greater number think it’s not worth switching because all banks are similar when it comes to the products and service levels they offer.
When it comes to considering which provider to switch to, the research showed that consumers are much more interested in aspects of service quality rather than product features, incentives and rates.
Yet in a review of the main banks websites last week, many still fail to include content on these important parts of the decision making process, instead they continue to prioritise messages on product features, rates and incentives.
1. Sell current accounts on service rather than product features:
Banks need to present content in their Current Account sales journey that describes the quality of service that they give, and gives the prospective customer a sense of what it will be like to be a customer. This should include:
If banks want to hold on to the customers they have, they need to make sure that their promises of great service are not hollow. In an age where social media makes service quality transparent for all to see, banks need to find ways to listen to the needs of their customers and building a customer experience to meet those needs and preferences. This should include:
Yes, we recently designed some new sales pages for a well-known current account provider, based on the insights above, and saw a significant increase in both leads and account applications as a result.
Whilst the 7 day switch service is definitely making the decision to move to a new bank easier, and the exposure that the subject is getting in the personal finance press is highlighting that this might be a good time to assess your options as a customer, the banks could and should be doing a lot more to pitch their case for us to switch on the things that matter to us most, the quality of the experience we will have of being a customer.