Why we fail to switch banks


#1

“There are about 70 million current accounts in the UK, and since that switching service began some five million accounts have been switched - although that is still less than 10% of the total.”

Interesting article from the bbc about switching banks. There is a challenge to get people to switch from their current bank.


#2

People are generally lazy (IMO) when it comes to changing something that “just works” or “that’s the way I’ve always done it”


#3

Most people don’t want to switch banks, for example my mother, all she ever does is put money in and take it out, she has no need for any other services. So changing accounts is irrelevant to her.

Out of all my friends only a few have switched banks and that’s purely because of a few features that a different bank offered. In general most people just want the basics, ie money going in, direct debits and standing orders and money coming out.

An extra 1% interest I bet most don’t care about, it amounts to pennies a year unless you have a decent balance.


#4

I don’t see why anyone would bother to switch, all banks are pretty much the same. Starling being more modern was the only reason I did a full switch from Santander. I never had any issues with Santander but I’m a millennial so starling appealed to me.

I noticed Santander have now added fingerprint login to their app and I presume they will catch up in other ways.

What I love about starling is you can do everything from the app. That alone was a good enough reason to switch.


#5

I’ve made a considerable amount of money switching bank accounts over the last 5 years, that is why I bother to switch. £130 here, £125 there, it soon adds up. Ok, there’s no dosh to be made switching to Starling, but joining Starling Bank wasn’t about making money, it was because I wanted some of this fintech, something I don’t get with my other bank accounts.
People don’t switch most of the time because they cannot be bothered and for some, they deem it as too much hassle and of course, there are some people for whom switching just isn’t an option because of their financial situation. It’s absolutely no hassle for me and I can tell you now my switching days are not over.


#6

I have one account that I use to switch for regular introductory bonuses, and I have two bank accounts that I barely use but will never close or switch away from due to their benefits.

Lloyds provides a great mobile, breakdown and travel insurance package and also in-app cheque deposits. I’ve received two new phones due to loss through this account! Also, NatWest do card-free ‘Get Cash’ withdrawals which has saved my bacon on multiple occasions!

These two examples alone are evidence that even the legacy bank can still better Starling, Monzo, and the like for some people. Some banks are undoubtedly terrible and deserve to be switched from, yet some banks really are worth their weight in gold depending on individual preference.


#7

I agree that switching isn’t for everyone. However, offers like the 5% from Nationwide + extra 100£ for switching referrals or cash back on debits / house hold bills are good incentives. I barely use those accounts though and treat the high percentage ones as current savings account. Apart from that, some banking issues (e.g. people struggling to withdraw money due to IT failures) show that it’s not wise to just stay with one bank to my mind.


#8

I think the problem sometimes is people often have other products with the bank, such as their mortgage, credit cards, savings accounts, etc all under one ‘roof’ which influences their decision to switch. It’s mainly why I haven’t tried to persuade my Mum and sister. They want the easy life and everything in their financial life is done at NatWest.

My Mum likes to go in the branch to do all her banking. She’s only begrudgingly starting to use the app because they’re closing the branch (which might be a better time to try and pursuade her)!

Also there’s the fact that although we have the CASS and it’s ‘guarantee’, it’s hardly foolproof is it? There’s plenty of examples just in this forum alone where partial and even full switches haven’t gone to plan and the guarantee seems to do little about Three being a law onto themselves for example.


#9

To make matters more complex some banks products (e.g savings and loans) are exclusive to their current account customers or will offer a better rate for their current account holders.