Survey shows why customers change banks

Expert thinks Westpac's about-face will start a move towards boutique banking. Photo / Northern Advocate

Perceived cost and inconvenience are the main reasons people hold back from switching banks, says a PhD student who has researched the issue.

Claire Matthews, recently conferred with her Doctor of Philosophy in Banking Studies, questioned nearly 3000 New Zealanders on their views about switching banks for her thesis.

"Interestingly, people's perceptions were that the financial cost of switching banks was high when in fact it is not, because the new bank often waives fees or contributes to legal costs to get new customers," she said.

People also had an "ingrained" perception that there was considerable hassle involved in changing banks.

"Even those who had changed recently and had a good experience thought that was a one-off and that it would be more difficult next time," she said.

Dr Matthews, who worked in the banking industry for 12 years before taking up her studies, said some of the information she found was unexpected and could result in better customer service.

Among her recommendations for banks to consider was the possibility of account number portability, as was now required for cellphone service providers.

"It would make life easier for the customer, but for banks it could be a double-edged sword because not only would it make it easier for new customers to transfer to their bank, but easier for current customers leave to go to another bank."

- NZPA