Those who have the best awareness of the Current Account Switch Guarantee are the least likely to consider changing banks, new analysis from YouGov finds.
The research is based on over 30,000 interviews from YouGov’s Cash Tracker. It shows that since the Current Account Switch Guarantee took effect last September the over-55s are the age group with the greatest levels of awareness about the scheme, with 40% knowing that it exists. However, they are also the age group that is least likely to use it, with only 8% believing they are likely to change bank account providers.
This is in stark comparison to under-25s where just under a quarter (24%) know of the Guarantee and just over a fifth (21%) are likely to use it. The Current Account Switch Guarantee was introduced by the Payments Council, in conjunction with leading UK banks, to make the switching process both easier and more trusted.
Jake Palenicek, Director of Financial Services Research at YouGov, says: “It is clear that the promotional materials have been successful in driving awareness – especially among older consumers. However, given the limited appetite among them for switching, perhaps the campaign needs to be re-focused around reaching younger people who are more likely to change providers. Doing this could create a new generation of consumers that think nothing of moving from financial institution to financial institution.”
YouGov has been tracking account switching since July 2013 – prior to the Guarantee coming into effect. The research shows that prior to launch, 16% of UK adults were aware of the Current Account Switch Guarantee. In the period from September to November 2013, this rose significantly to two in five people (41%) but has steadily fallen since and now stands at 32%.
Despite this increase in awareness, there is still a marked difference between the proportion of consumers who believe they will change account provider and those who actually do it. The Cash Tracker data show that while 14% of people say they expect to switch, only 6% actually have done.
The analysis suggests that one of the causes of this gap is that people’s problem with changing current account provider is less to do with the process of switching and more to do with the motivations for doing so. The main barrier is that any consumers do not think that changing provider will make that much difference to them. Fewer than one in five (17%) UK adults feel that current account providers are “different from one another”.
However, the Guarantee does seem to have made an impact on public opinion about changing current account provider. The proportion that feels that switching is inconvenient has dropped from 71% last summer to 64% now. Furthermore, there has been an increase in the proportion (from 41% last summer to 47% this summer) who think switching current account providers is “not risky”.
Jake Palenicek continues: “There is still some way to go until people start treating their current account providers the way they treat their insurance companies and move around in search of the best deal. It will be interesting to see is whether the introduction of non-traditional current account providers – such as the more service-focussed approach from the likes of M&S and Tesco – has an impact on the market.”
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