The vast majority of Australians have turned a deaf ear to media and government rhetoric on bank switching, with only 5% changing banks in the past year.
New research from Canstar Blue shows only a small fraction of banking customers changed financial institutions over the past 12 months. Canstar Blue manager Rebecca Logan said the result shows changing banks remains low on Australians’ list of priorities.
“These results show no matter how much choice is out there and how often we are urged by the Government and the banking industry itself to search for and change to a better deal, as a nation we tend to struggle to leave the banking relationship we are currently embedded in. Australians are increasingly time poor and banking decisions tend to be one we continue to put on the backburner to focus on what we perceive to be more pressing tasks. Many consumers also have multiple products with the one institution which is another common impediment to making a change as people often feel invested emotionally with their provider,” she said.
Of those who have switched banks, 23% said they were prompted by fees, 15% said they were given a better offer by another institution and 14% said they switched due to interest rates.
The results come as consumer group CHOICE has ramped up its Move Your Money campaign, aimed at prompting consumers to switch banks. The campaign claims borrowers can save $3,500 a year by switching to a smaller institution.
“Over the last three weeks, more than 4,000 Australians have signed up to the CHOICE Move Your Money campaign, pledging to look for a better deal beyond the big four banks, and if they find one, switch and save,” CHOICE director of campaigns and communications Christopher Zinn said.
CHOICE’s previous high-profile switching campaign One Big Switch, which saw the consumer watchdog receive referral fees for sending clients to new lenders, attracted 40,000 registrants, but only saw 2,000 go on “to have discussions” with lenders. The Australian Bankers’ Association has also blasted the group’s claim of big savings for consumers who switch to small institutions.
“Choice is comparing the worst major bank product with the best from other providers. Customers are smarter than this and understand that they need to make a choice based on their own circumstances and how they want to bank,” ABA chief executive Steve Munchenberg said.
Big Switch sees small finish