Study reveals customer motives for switching banks

Consumers most value better online tools, local branches and 24/7 availability

A majority of consumers would prefer portable bank account numbers to make switching between banks easier, according to a new YouGov poll conducted by BT – and the reasons may surprise advocates of Banking 2.0.

The research surveyed 6,500 people in six countries, and found that most people in Spain (76%), Hong Kong (70%), France (64%), Germany (61%) and the UK (62%) agree that a portable account number would be useful.

In the UK, new rules on account switching are due to be introduced in September, requiring banks to switch customers to another bank within seven days.

However, when asked about which three factors would be the most appealing when considering moving banks, the BT study found poor results for tools such as social media and mobile banking, and higher results for services such as online banking and web chat.

Good online banking facilities motivated 39% of respondents, the presence of a local branch 45% and the ability to access banking services 24/7 29%. When asked which three tools respondents would most like their bank to provide, consumers indicated that they wanted more sophisticated online tools such as peer review sections (32%), web chat facilities (23%) and compare my bank services (29%) to give them better information and help them make informed decisions.

Customers were more cautious about the use of alternative payments such as Bitcoin, Facebook Credits and virtual wallets. The percentage of respondents who had tried alternative payments was less than 10% across most of the countries polled. Respondents from Hong Kong and Spain were the most likely to try alternative payment methods in the next 18 months (43% and 36% respectively). Respondents in the US and Germany were the least likely to try alternatives (12% and 9%).

Mobile banking also achieved relatively low scores, with German consumers the least likely to choose mobile banking in their top three most trusted banking technologies, followed closely by the UK. Only 5% of Germans and 10% of British consumers said that mobile banking is one of their three most trusted technologies. Internet banking, in-branch self-service and ATMs were viewed as the most trustworthy technologies.

The survey also returned mixed feelings about banks sharing their IT infrastructure and having access to customers’ personal information. Some 38% of respondents to the BT study felt that banks sharing infrastructure would be a bad idea, with 28% undecided even though it could potentially improve competition and make switching accounts easier.

Of the countries surveyed, only in Hong Kong (75%) and Spain (54%) did a majority of respondents think that shared IT infrastructure for banks was a good idea. Furthermore, even the Simon-Kucher & Partners study acknowledged that some 86% of consumers could be dissuaded from switching by a one-off gift of up to £100, better interest rate on savings, or better interest on their current account.

“Banks are increasingly focused on providing services via smart phones and tablet devices to keep pace with digital changes and innovation,” said Tom Regent, president, global banking and financial markets, BT global services. “While this is an important strategy, banks must be careful not to lose sight of the need for human contact in either the branch or via a local call centre agent. Our research shows that these continue to be customers’ most trusted and preferred channels.”