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Recent banking scandals turn customers onto building societies

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Customers are increasingly favouring using building societies to conduct their financial affairs after recent scandals in the banking sector.

The GfK NOP survey of consumers found that the number of people who feel building societies value them as a customer is 22% points higher than banks, a figure that has risen dramatically since the previous survey in May, when the gap was 15% points.

Elsewhere, customers were asked if they could trust their provider to act in their best interests, with building societies and mutuals coming out 17% points ahead of their banking rivals.

When asked if their provider was honest and open with them, building societies were 11% points in front of banks.

Customers were also asked about the ethical standards their lender adhered to, with nearly two-thirds of respondents saying that mutuals had high ethical standards compared to just 50% for banks. A fifth of those polled said that they thought their bank had low ethical standards.

This follows an announcement by the Building Societies Association that building societies and other mutuals now constituted nearly a quarter of the total UK mortgage market, dramtically up on last year.

Hilary McVitty, head of external affairs at the BSA, said that the number of scandals in the banking sector had affected people’s confidence.

“We were not surprised to see that consumers’ views had changed in these three months, but we were rather taken aback by the degree of movement. Strong feelings are clearly being expressed here by consumers.

“These views are being backed up by action by more than a few, as evidenced by the sustained increase in mortgage lending and a healthy inflow of retail deposits in July announced today.

“Whilst mutuals are currently benefiting, their attention is not just on the present, but the future and continuing to deliver the products that UK consumers want with the service and behaviours that they expect.”

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