New research from uSwitch reveals that 42% of consumers are more likely to switch their current account when the new Current Account Switch Guarantee is introduced in September.
The study also reveals that one in five consumers are not satisfied with their current account provider, with excess charges (45%), poor interest rates (36%) and in-branch queues (21%) the main gripes.
Despite the banks’ poor scores, only one in ten consumers have switched their current account in the last 12 months.
Current Account Switch Service
Designed to improve competition and increase choice, the new switching guarantee will allow consumers to switch their current account provider within seven working days.
The Payments Council announced that the service would be carried out by virtually 100% of the current account marketplace, and chief executive, Adrian Kamellard believes the process will be “simple, reliable and hassle-free”.
“The new service, when launched in September, will deliver a significant step-change for current account switching in the UK, leading to more competition in the marketplace and greater choice for customers,” Kamellard said.
When it comes to having greater choice, uSwitch’s study revealed that 74% of consumers would choose a bank that is financially secure, and has a good reputation (71%), over one that is ethical (27%) or a household name (26%).
Personal finance expert at uSwitch, Michael Ossei said: “The fact that financial stability is the most important factor is a real sign of the times.
“Consumers are feeling bruised by what’s happened in the banking sector over the last five years.”
This revelation could have a negative impact on Co-op, who recently experienced a credit downgrade, but gives hope for smaller and lesser-known current account providers.
“New entrants have been well-received on the surface, but it’s clear they are going to have an uphill battle to actually convince consumers to make the move,” Ossei said.