New research from uSwitch has found that 40% of consumers are more likely to choose a new entrant to do their banking in comparison to a year ago, with supermarkets and department stores among those people would bank with.
The research found:
• Four in ten are more likely to bank with a new entrant compared to a year ago
• 45% would trust Waitrose, 18% Morrisons and 12% Aldi to do their banking
• 77% would bank with John Lewis, 30% would choose Debenhams and 27% would even bank with Amazon if they could
The reasons for this trust in newer entrants and smaller suppliers may be related to the changing notion of what a ‘bank’ is. 36% of those asked said they still valued in-branch banking, but that figure was dwarfed by the 88% who regard online banking as essential, the 62% who require telephone banking, and the 45% that value mobile banking.
Supermarkets may not be the first thing that springs to mind when most of us think of banking, but with Asda, Tesco and Sainsbury’s successfully moving into the field it’s hardly surprising that almost half (45%) of those surveyed said they would bank with Waitrose.
A similar brand trust was evident for department stores, with 77% saying they would bank with John Lewis, and 30% would bank with Debenhams. Meanwhile Amazon also received a respectable 27%.
A brand you can trust
The brand itself, rather than whether that brand was a high-street shop or a supermarket, appears to be the key factor influencing people’s decision of who to trust with their money. While 45% would bank with Waitrose just 18% of those surveyed said they would bank with Morrisons, and only 12% would bank with Aldi.
The survey found that 87% of consumers are influenced by how financially secure an institution is, while 86% noted the strength of reputation.
The results follow a period of increasing scrutiny for the traditional banks following the Libor scandal, PPI mis-selling, and banker’s bonuses.
Branchless, paperless, banking
David Mann, Head of Money at uSwitch, said: “It’s clear that consumers want to see the established banks put under more pressure to provide better rates, rewards and services. The reality is that if these traditional lenders don’t start upping their game, they may find themselves sitting on the sidelines when the whistle blows.
“New entrants are a catalyst to drive change in the market, so it’s great to see them continuing to challenge the dominance of the big four by bringing competitive products and services to the table and providing better value for customers.
“However, it’s important to remember that competition in the sector needs to be driven by better banks, not just more banks. New entrants need to be innovative and in touch with their customers’ needs in order to compete with more established players and online, telephone and mobile banking present an opportunity to do this.”
*For more details, check the press release.