Brits abandoning the big banks as switching increases by a third

By Elliot Wright, 10th February 2010

Brits are switching banks in their droves as poor customer service and unfair bank charges takes its toll on customers, according to research.

During 2009 there was a 31% increase in customers switching from the big four banks - Barclays, Lloyds Banking Group, HSBC and Royal Bank of Scotland.

The research, carried out by The Co-operative Bank, revealed that a third of customers cited customer service as a reason for looking for a new current account provider. 14% wanted a bank with a fair and transparent charging structure while 10% moved to a more ethical provider.

The figures demonstrate that people have started to look at their banking providers more closely, with general discontent and distrust leading to many customers voting with their feet.

Specific events such as the banks' victory in the bank charges test case, and public unease at the taxpayer-funded bail outs during the financial crisis, triggered an increase in switching activity.

14% wanted a bank with a fair and transparent charging structure while 10% moved to a more ethical provider.

Despite the increase in bank customers switching, the research also showed that the average person is still much more likely to switch energy providers, move house, or change mobile phone provider than switch their current account.

John Hughes, Business Leader of Retail Products for The Co-operative Financial Services said, "The findings clearly show that customers are now increasingly likely to switch their bank account, if they are unhappy with the service, facilities or ethos of their provider."

"Historically many people chose their banking provider when they were younger and stayed with that provider throughout their life. However now more than ever consumers should review their banking products as their personal circumstances change to ensure that their account suits their financial needs and service requirements.

"In the past moving a current account often seemed daunting, but actually, most banks now do all the work, including transferring all direct debits and existing balances, which makes the process much easier for customers."

Claims Financial