UK switching rates to soar

Some interesting research lands in my inbox from global pricing consultancy Simon-Kucher & Partners. Almost half (49%) of UK current account holders are likely to consider switching their account once seven day switching regulations come into play in September. That compares with a mere 19% of potential switchers last year, writes Douglas Blakey

Douglas Blakey is Group Editor, Consumer Finance at Timetric Financial Services, having previously been editor of Retail Banker International and Bank Marketing International.

Douglas practised as a solicitor in Scotland before moving into business information. He maintains an editorial advisory board of leading bank CEOs and is a regular guest banking analyst with BBC radio and TV, New Statesman and other leading media.

Some interesting research lands in my inbox from global pricing consultancy Simon-Kucher & Partners.

Almost half (49%) of UK current account holders are likely to consider switching their account once seven day switching regulations come into play in September. That compares with a mere 19% of potential switchers last year.

And according to Simon-Kucher & Partners, actual switching rates will grow to between 6% and 12%; that compares to only 5% of current account holders switching their account in the last 12 months.

The crucial role played by digital banking in determining customer behaviour is highlighted by the report. Online banking is the most important factor that attracts current account holders when looking for a new bank when deciding to switch.

Other important factors include the ability to transfer all regular payments while introductory bonuses for switching are also a highly popular feature, such as first direct’s £100 switching incentive.

As the report correctly concludes: banks will need to stem switching rates by incentivising current account holders to stay.

It will be fascinating to observe just how UK banks go about ensuring that customer loyalty is rewarded. And equally interesting to see which banks blaze a trail by being innovative in their marketing strategy.