80% of customers would move to a newly launched bank – uSwitch
The price comparison website found that four-in-five people would now consider switching to a new player in the sector such as M&S Bank, Virgin Money, Tesco Bank or MetroBank.
Michael Ossei, personal finance expert at uSwitch.com, said that numerous scandals and failures since the credit crunch had continued to drain consumers’ confidence in the traditional banking sector.
“The credit crunch has left a lasting crack in our banking sector that the traditional high street banks have done little or nothing to fill. Instead of rebuilding consumer trust and confidence they have lurched through a series of high profile scandals and mis-selling cases.
“But the failure of banks to clean up their act has had an unexpected upside – they have unwittingly opened the door for new players to come in and handed them a golden opportunity to shake the market up once and for all.”
The study also found that the majority of customers felt the entrance of new players into the sector had forced traditional banks to up their game.
“In the last few years we’ve seen the start of a banking revolution where new players are calling the shots and the traditional high street banks are under pressure to deliver and to keep hold of their customers.” Ossei added.
“Consumers today have a far greater choice of providers and we’ve already seen one in five (18%) ditch their old bank and switch to a new player, while over three quarters (77%) believe that the new players have improved competition amongst existing banks.
“Retail and supermarket brands have well and truly broken into the market and are now leading the way.
“But this has not been enough yet to undo the damage caused by the credit crunch. We’re only just starting to see more lenders competing with attractive rates, a gradual relaxation in borrowing criteria and more deals aimed at first time buyers and those with smaller deposits.”