Brits traditionally have been rather loyal when it comes to their banking and financial institutions. The average customer can stay with a bank for years, if not decades. The pandemic further depressed switching, despite processes in place that allow consumers
to easily move from one account to another. But that’s now changing. Recent data shows that people changing their current account provider surged in the second quarter. More than 200,000 people switched then, an increase of more than 56 percent from the preceding
period. People are on the move – but what does it mean?
First, it’s important to point out these figures almost certainly undersell the nature of change. Not included in these statistics are people who did not use an official service transfer to their money or those that added another account and/or did not close
their existing relationship. The current account story is also just a part of a larger piece, as millions are starting or expanding their trading relationships.
While the reasons for switching are individual – and sometimes can be pushed along by incentives in the forms of cash or free trades – trends are emerging about what customers want from their banking provider. We see three trends commonly cited by those
who chose to come to Fineco.
The first is integration. Brits are increasingly looking to get more from a single provider. That means instead of using different companies for investing, saving, and trading, using the same one for all three. With more people than ever involved
in trading and investing, that means more appetite for integration. A single platform makes it easy to get a holistic view of one’s financial situation and approach and means additional data can be generated and shown to users.
A second trend is ease of use. We see this in the declining traffic in physical branches, as mobile and app-based banking becomes the norm. It also means the ability to get assistance during a wider range of hours and easily access materials to help
with planning and any problems that emerge.
The final major trend is around higher expectations. British bankers are no longer ready to settle for mediocre service and products. They want access to a variety of sustainable funds. By lower the opportunity cost of switching, it means that banks
can ramp up the competition on services and then rake in new customers.
None of these drivers look set to ease in the near future. Expect more change in the market as consumers vote with their feet – and their wallets – about what is delivering value. This represents a serious opportunity, but only if banking providers rise
to meet the occasion.