Why are people scared to switch banks?

A new advertising campaign was launched six weeks ago to persuade more people to switch bank accounts. But have you actually seen any of the adverts? I’ve asked several of my friends and colleagues, but none of them can recollect hearing about this campaign or seeing any of the ads.

Bacs - the organisation responsible for the switching service - launched the new advertising campaign during September in newspapers, social media and online. But few people seem to be aware of it!

Why has the campaign been launched?

Simply because people seem very reluctant to switch banks, despite much better deals being offered elsewhere.

It’s an often-quoted (and true) cliché that people are more likely to get divorced than switch their bank. And that’s despite the fact that most people, when asked in customer research, complain about the poor customer service of their bank!

The Switch Guarantee Service was launched just over three years ago to encourage people to get better deals from their bank. But the numbers using the Service have fallen consistently. In the year to June 2016, the number of switches averaged 88,031 a month. That compares with a monthly average of 92,448 in the previous year.

Since the Service was set up three years ago, official figures show there have been 3.2 million switches. But this figure isn’t as good as it seems, because it includes the small group of people who switch banks repeatedly to get the best deals. And since there are 68 million current accounts in the UK, three million switches in three years is actually a very small percentage of the total number of bank accounts.

The plain fact is that despite poor customer service and better deals being available elsewhere, most account holders are reluctant to switch bank accounts - and that’s despite incentives worth up to £220 being offered by banks and building societies. You can find out more about this subject by reading the blog article we published last year on the subject. The subject of banks and customer loyalty will also be covered in more detail in The Loyalty Gap - the new book by Darren Bugg which is being published soon.

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