As competition within the retail banking sector increases with the growth of challenger banks, Equifax research reveals that receiving the best rates is by far the biggest incentive for consumers looking to switch banks.
In an online survey conducted by YouGov, 42% of people cited better deals and rates as a reason they would switch bank accounts; 28% said that incentives like a cash bonus or new smartphone would prompt them to change and 24% flagged better customer service as a priority. More convenient branch locations are a deciding factor for 21% of people but only 14% would be swayed by better technology and security. 26% of people said that nothing would prompt them to change provider.
The research also showed that only 13% of respondents are aware of the government’s midata initiative, which allows consumers to easily compare current account offers based on their recent banking history. Only 1% have actually used midata.
Consumers’ focus remains on the traditional aspects of a bank account such as returns on savings or low interest rates for loans. A lack of awareness of comparison tools however means that consumers may struggle to determine the best financial deals for them, making them less likely to change provider.
Jake Ranson, Banking & Financial Institutions Director at Equifax says: “While the choice available to consumers has significantly increased with the rise of challenger banks, consumers are still reluctant to change financial providers. More needs to be done to promote tools such as midata to ensure consumers can take full advantage of the competitive offerings banks are providing.
“Banks are investing heavily in their technology but customers remained firmly focused on getting the best deal. Providers need to balance a strong core product offering with the right benefits, customer service and accessibility to services.”