New Zealanders reluctant to change to a new bank

New Zealand customers are loyal to their existing banks, data shows.
DAVID GRAY/REUTERS

New Zealand customers are loyal to their existing banks, data shows.

We swap around our power providers, phone companies and favourite supermarkets. But when it comes to our banks, New Zealand customers are reluctant to switch.

A simplified system was introduced in 2010 that was designed to make it easier for customers to move to a different bank.

It meant all people had to do to change was to roll out a form and sign it, after which their bank would hand over all their details to a new bank, including transferring over their direct debit payments.

But Canstar research shows just 4 per cent of New Zealanders said they had changed banks in the past year. Three-quarters had had the same everyday bank account for more than five years.

READ MORE: Changing your bank is easy

Spokeswoman Emma Quantrill said there was a perception that swapping banks was a long and difficult process, or felt their ability to negotiate with their current bank was stronger.  "In modern banking, our relationship with our bank is less and less personal. Products and services for everyday banking across banks are broadly similar in terms of accessibility and pricing."

Banking expert Claire Matthews, of Massey University, agreed consumers were reluctant to shift.

"It is perceived as being difficult and uncertain. And it is a hassle because there are still things the customer has to do, and because our banking relationships get quite complex over time, as we add direct debits and credits. 

"Part of it is the perception that all banks are the same so changing isn't really going to make a difference. It means that we have to be really unhappy or getting a much better deal at the new bank to make it worthwhile making the effort to change."

But she said her research showed people found switching easier than they expected.

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New Zealand Bankers' Association chief executive Karen Scott-Howman said a big barrier to people switching before 2010 was the problem of re-establishing direct debits, automatic payments and bill payments.

"With the improved switching process, the new bank manages the whole process for the customer. There's a single form for the customer to authorise all recurring payments to be switched to the new account number, and it all happens in five working days," she said.

"Switching may be relatively low because New Zealanders rate their banks highly. This was reflected in Consumer NZ's banking satisfaction survey last year, which found that 86 per cent of customers were satisfied with their bank.

"The banking industry's high satisfaction ratings reflect the fact that over the last decade banks have worked hard to develop new banking channels to meet customer preferences. Innovations include 24/7 access to banking services through online banking and mobile banking apps, and extended access to bank staff through contact centres."

 

 

 - Stuff

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