Eight out of ten Irish people underestimate the amount they pay in retail bank charges by as much as 50%, while almost one in five Irish people feel that they have a poor choice of current bank account provider, according to the first ever permanent tsb Switching Index, launched today
Based on research conducted by Amárach Research on behalf of permanent tsb, the Switching Index is a new report designed to compare and contrast consumer loyalty and satisfaction across a range of household necessities and to explore the reasons why consumers switch in each area why they don’t, as well as their overall attitudes to money. The research was carried out amongst a nationally representative sample in early October.
The Switching Index – the score which reflects a consumer’s ability and appetite to move between providers, taking into account factors including customer satisfaction levels, the choice of alternative providers available and the impact of price increases - was lowest for banks (46 out of a possible 100), compared to electricity (50), broadband (53), mobile phone (57) and car insurance (59).
Commenting on the findings, Gerard O’Neill from Amárach Research said:
Our unique research provides a benchmark measure across five key sectors. We will track change every quarter in future editions of the permanent tsb Switching Index, measuring not just the attitudes of Irish consumers towards switching, but their behaviour and experiences as well. The Switching Index will therefore measure the degree to which consumers are voting with their feet, purses and wallets by switching to other providers for better value, better service, and greater choice.
Financial economist and expert in household finances Dr Michael Dowling from DCU said:
For every four people you see queuing at the ATM, at least three of them are being unnecessarily charged fees for withdrawing cash and at least one of them is desperately unhappy with their banking provider. On the other hand, at least one of those four people will have switched bank at some point and is usually very happy that they did so. When it comes to banking, what passes for consumer loyalty is actually much more likely to be inertia, with a far lower degree of consumer mobility in the retail banking sector when compared with all the other household bills examined. Some banks have already taken steps to make switching bank accounts more consumer friendly, which is a positive move, particularly in light of recent market developments and the exit of some retail banks from Ireland.
Earlier this year, permanent tsb bucked the trend of other Irish banks who have started pushing up current account fees, by introducing senseless fee free banking with no quarterly or day to transaction fees and no minimum balance to be maintained when a customer lodges €1,500 per month. More than 34,000 customers have already opened a current account with permanent tsb this year.
Niall O’Grady, Director of Transactional Banking, Savings and Investments in permanent tsb said:
The research shows that customers move around less in the banking sector than any other of the other household bills examined. Despite high levels of dissatisfaction and against the backdrop of banks withdrawing from the market there is still a lack of switching in the market. Therefore it is essential for banks to offer consumers competitive alternatives and to make the whole switching process as simple as possible to ensure customers make the move.
A copy of the permanent tsb Switching Index is available here. Tweet us your switching stories at @askpermanenttsb or using #ptsbSwitch