A news piece on the BBC website today – Current account switching to be hassle-free – relating to new processes to make it easier for bank current account customers to switch accounts is interesting in terms of customer loyalty and banks. Many of us stick with the same bank for many years, transacting many times a month with that bank. In many respects this could imply that we are happy with the service and keen to keep using the service of the bank we have accounts with but in practice this may not be the case. Many people stay with banks because it is not easy to move accounts and there is the worry that things will go wrong and that could have negative consequences for our longer term finances – this is nothing to do with loyalty.
The interesting thing will be how banks react to the new process, as they will be encouraged to display the sign to show that they are part of the scheme to make it easy to switch. What will they do to encourage people to stay with them, knowing that they have to make it easy for them to leave? I will add that I think banks have probably improved a lot over recent years in terms of some levels of customer service, but they need to ensure customers are really satisfied to maximise customer retention if it gets easier for us to leave, especially with the new entrants to the market we are now seeing. Not just that, they need to consider additional ways to encourage people to switch to them from others once it is easier to do this.
What could your bank do to help encourage you to stay with them? Or what would encourage you to move to a different bank? What I would hope is that any incentives to encourage new customers are such that they don’t make those who are existing account holders feel they are not getting as good a deal as has often been the case with mobile phone networks and similar.