News
Moving your money could be easier than you realise
14 Mar 2012
The theme for World Consumer Rights Day (WCRD) 2012 on 15
March is 'real choice' in financial services and marks 50 years
since John F. Kennedy articulated the first four
consumer rights, including 'the right to
choose'.
CI member organisations in the EU and Australia have all
recently conducted surveys to ask consumers about their experiences
with switching bank accounts. The results show that more needs to
be done to get consumers switching and encourage more competition
between service providers.
Most consumers who have switched banks found the process
easy
In surveys conducted in Australia, Belgium, Italy, Portugal,
Spain and the UK, well over half of all consumers who had switched
said that they found the process easy. In Belgium, Spain and
the UK this figure rises beyond 70 per cent.
The reasons that consumers gave for wanting to switch say a lot
about the nature of consumer dissatisfaction with banks. Consumers
in Spain, Belgium, Italy, Portugal, France and the UK all said they
that one of the main motivations for switching was to get a better
service or because they had a disagreement with their previous
bank.
Another key motivator in all these countries was to get a better
rate of interest. The costs of an existing account were also an
important reason to switch for consumers in Spain, Belgium, Italy,
Portugal and France. Similarly, in Australia the main reasons given
for switching were the feeling that loyalty was not being
acknowledged, and that fees and charges were unreasonable.
But many consumers are still put off because due to perceived
complications
Yet the same surveys also showed that a significant number of
consumers in all these countries who wish to switch banks do not
end up going through with it. One of the top reasons cited was a
concern that the switching process would be too complicated or time
consuming. Many also felt they were unlikely to get a better
service or better rates at a new bank.
But, as described above, consumers overwhelmingly find switching
easy and other research by CI member organisations in the same
countries show that real savings can be made.
The results also suggest that innovative ideas such as
transferable bank account numbers could play a significant role in
encouraging consumers to switch, with between 43 per cent (UK) and
67 per cent (Spain) saying that they would be more likely to move
their money if they could take their bank account number with
them.
Consumer concerns around switching must be addressed to promote
'real choice'
The basic consumer right to choose is being undermined in
financial services if consumers feel that exercising that right
will cause problems. In turn, financial institutions that don't
feel pressure from consumers who are ready and willing to move
their money are less likely to compete with each other to drive
down costs, improve service quality and innovate.
These survey results clearly suggest that there is still more to
be done to encourage consumers to switch. As Helen McCallum,
Director General of Consumers International said:
"If a consumer is dissatisfied with the financial service
they are receiving, banks need to work much harder to ensure the
switching process is as pain free as possible.
"Providing clear comparative information, and ensuring the
process is straightforward and risk free will encourage more
consumers to switch, increase competition and promote better
service and better deals."
The consumer movement unites for a global day of action
World Consumer Rights Day 2012 takes place on 15 March. CI
member organisations around the world are engaging in a wide
variety of activities to highlight this year's theme: 'Our money,
our rights: campaigning for real choice in financial services'. To
find out more:
- Download CI's briefing on the barriers to choice faced
by consumers, and the steps that can be taken to improve
competition in financial services.
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