Data from the UK Current Account Switch Service (CASS) shows that switching was 30% lower in 2020 than in previous years. In a paper published today, on behalf of CASS we used implicit association testing and other research methods to explore the reasons behind these changes to switching in both consumer and small business markets, including the impact of the Covid-19 pandemic.
We find that that consumer attitudes towards switching have remained largely unchanged during the pandemic. Changes to switching rewards and other supply side factors, and increased levels of consumer vulnerability, are both likely to have been important drivers to the changes in switching behaviour observed.
In particular, the behavioural research reveals that:
- overall consumer associations with current account switching remain positive, for example that it is “easy”, “rewarding” and “worthwhile”;
- potentially vulnerable customers and younger people are more likely than other groups to hold negative associations with switching such as “confusing” and “stressful”; and
- account and overdraft eligibility appears to be a particularly important perceived barrier to switching for some groups – both vulnerable customers and gig economy workers worry more about eligibility compared to other groups.
Wider uncertainties mean it remains to be seen how persistent these changes to switching behaviour will be looking ahead to 2021. In the meantime, the findings provide insight into the attitudes of these different customer groups, and how they may benefit from targeted behavioural support and intervention.
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