- Consumers would trust supermarket brands such as Waitrose (45%), Morrisons (18%) and Aldi (12%) to do their banking
- Three quarters (77%) would trust John Lewis to manage their money whilethree in ten (30%) would opt for Debenhams (30%) and a quarter (27%) would pick House of Fraser
- Consumers are most likely to pick a bank based on how financially secure it is (87%), its reputation (86%), and competitiveness of interest rates (85%)
- While 88% regard online banking as essential, nearly two thirds (62%) place an importance on telephone banking, and 45% value mobile banking
- A quarter (23%) say new entrants have learned from the mistakes of traditional banks and offer better value for money (15%).
New research from uSwitch.com, the independent price comparison and switching service, reveals that the wave of new entrants to the banking sector has created even more appetite amongst consumers for an alternative to the high street banks, as four in ten (40%) are now more likely to bank with a new entrant than a year ago.
The success of financial offerings by Tesco and Asda seems to have rubbed off on the sector as consumers would trust other supermarkets such as Waitrose (45%), Morrisons (18%) and Aldi (12%) to do their banking if given the choice.
In fact, the findings suggest that if other much-loved high street brands moved into banking, they could be just as successful, with three quarters (77%) of consumers saying they would trust John Lewis to take care of their banking needs, while competitors Debenhams (30%) and House of Fraser (27%) also prove popular.
When it comes to choosing who they would like to bank with, consumers are most likely to be influenced by how financially secure an institution is (87%), the strength of its reputation (86%), how competitive its interest rates are (85%), and whether their money will be covered by the Financial Services Compensation Scheme.
It’s perhaps unsurprising that consumers are continuing to warm to new entrants, as one in six (15%) say they offer better value for money and care more about their customers (15%) than the traditional banks.
However, as consumers’ needs change, banks are coming under increasing pressure to improve their digital offerings. While a third (36%) of current account holders still value face-to-face contact with their bank, nine out of ten (88%) feel having online banking is important, half (52%) feel the same about telephone banking and 45% about mobile banking.
David Mann, Head of Money at uSwitch.com, says: “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 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.”
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Notes to editors
Research carried out online with the uSwitch.com Consumer Opinion Panel in August 2014 amongst a sample of 1,463 GB adults.
1. When asked to indicate from a list ‘Supermarkets, such as Tesco and Sainsbury’s, have successfully started to move into the banking sector. Which of the following would you trust if they moved into personal banking?’’, 76.6% said John Lewis, 44.8% said Waitrose, 29.5% said Debenhams, 26.7% said House of Fraser, 26.7% said Amazon, 25.4% said Boots, 18.2% said Morrisons, 12.0% said Aldi, 11.3% said WH Smith, 10.9% said Argos, 10.1% said BHS, 7.1% said Lidl, 8.4% said eBay, 5.3% said Curry’s, 3.8% said Superdrug, 3.1% said Primark, 2.3% said Poundland, 1.8% said Sports Direct.
2. When asked ‘when it comes to your money and savings, which of the following factors would influence your choice of where to hold them? 86.6% said the bank being ‘financially secure’, 86.0% said a ‘good reputation’, 85.4% said ‘competitive interest rates’, 84.3% said ‘my money/savings will be covered by the Financial Services Compensation scheme’, 55,6% said ‘the company/organisation is British’, 48.6% said ‘ethical banking’, 45.6% said ‘a family member or friend recommends them’, 38.1% said ‘they are a household name’, 18.3% said ‘I use the company or organisation regularly for something else, such as grocery shopping’, 7.9% said ‘they make large profits’, 2.0% said ’they pay large bonuses to their senior executives’.
3. When asked ‘how important is it for you that your bank offers the following?’ 73.2% said that internet banking is ‘very important’ and 14.7% said it is ‘fairly important’. These figures combined is equal to 87.9%. 29.1% said telephone banking is ‘very important’ and 32.9% said it is ‘fairly important’. These figures combined is equal to 62.0%. 24.8% said mobile banking is ‘very important’ and 20.1% said it is ‘fairly important’. These figures combined is equal to 44.9%.
4. When told that ‘In recent years, new additions to the banking industry have included Virgin & Metro Bank, and there have been offerings from M&S, Post Offices, Co-op and Sainsbury’s’ those surveyed were asked to indicate from a list which statements they believed to be true or false. 47.2% said ‘they have improved competition amongst existing banks’, 22.5% said ‘they have learned from the mistakes of more traditional high street banks’, 21.9% said ‘they are innovative’, 15.4% said ‘they offer better value for money’, and 15.2% said ‘they care more about their customers than the traditional banks’.
5. When asked ‘Are you more or less likely to use (i.e. have a current account, savings account, credit card or mortgage) one of these new players compared to a year ago?’ 39.8% said ‘More likely’, 30% said ‘Same – I still wouldn’t’, 24.5% said ‘Same – I still would’ and 5.7% said ‘Less likely’.
Launched in September 2000, uSwitch is an online and telephone price comparison and switching service, helping consumers get a better deal on gas, electricity, broadband, TV services, mobiles and personal finance products including mortgages, credit cards, car and home insurance. Last year we saved UK consumers over £278 million on their energy bills alone.
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