The study found that eight out of ten (80%) consumers would consider switching to a new provider – with one in five (18%) already having switched.
As people become used to the idea of banking with supermarkets, almost half (49%) say they are more likely to use one of the entrants today than a year ago, while six out of ten (60%) believe that new providers have learned from the mistakes of more traditional high street banks.
Trust in supermarket banks on the up
On the back of the recent rebranding of its personal finance division, more than a third (36%) said they trusted Asda in the banking sector, with three quarters (75%) stating that they would trust John Lewis if it moved beyond credit cards into further banking products.
Supermarket and retail finance brands score top for customer service (69%) – only 37% of consumers rate the traditional banks for customer service.
The supermarkets face competition from building societies, which are still considered to be the most secure (77%) and trusted (62%) providers.
Traditional banks facing strong competition
uSwitch personal finance expert Michael Ossei commented: “This research suggests that the traditional banks face the biggest threat to their territory ever. While many of them were actually behind the supermarkets’ early forays into finance this may be something they come to regret.
“While confidence in the banks is low, retailers and supermarkets’ reputations are looking virtually blemish-free. As a result, as many as eight out of ten (80%) consumers would be willing to consider switching to a new player and almost one in five (18%) have already switched. For many, the likes of Asda and M&S offer a real alternative, with six out of ten (60%) saying they have learned from the mistakes of the existing high street banks.
“Supermarkets in particular are in a unique position to benefit, with a third (33%) of consumers saying they would want to bank with a company that they regularly use for something else, such as grocery shopping.
“But it’s not just convenience that is winning consumers over – the majority (69%) believe a supermarket or high street brand will provide the best customer service and a further 52% believe they offer the best value for money – compared to only 9% for the traditional high street banks.”