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.
Poor service is a reason to leave…but where to next?
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.
- 46% of current account customers said that “it’s not worth switching because all banks are the same”
- 24% said that even if they did they “would have trouble deciding which bank to switch to”
Service more important than features and rates
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.
- 48% of our sample said that quality of customer service would be the single most important factor in deciding who they would switch to, and ranked well above factors such as product features or cash incentives.
- And a significant proportion (36%) said that an ‘easy to use online banking service’ would be a key factor when considering switching.
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.
So how should banks entice people to switch?
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:
- Placing far more focus on describing the customer service offering, including awards or third party endorsements and reviews. Help prospective customers “feel” what it will be like to be a customer.
- Identify ways of bringing to life the online and mobile service. Demos, images and content that give prospective customers a sneak peek of what these look like.
- Include summarised and highly visual content on how easy it is to make the switch, giving a step-by-step explanation of what happens when.
2. Get the basics of great customer service right
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:
- Rewarding customers for their loyalty, not offering better deals to new customers (one of customers biggest hates about banks)
- Not wasting customers’ time trying to sell inappropriate products and services at intrusive times when customers are trying to manage their banking.
- Using the data they have about customers wisely, demonstrate that they know their customers and personalise the service to their customer’s needs.
- Getting the basics right: Make sure online banking and mobile does the basic banking functions really well.
Do we have proof that this works?
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.
The opportunity for the bank that gets the “pitch to switch” right
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.