Celebrating 10 years of operation this month, Pay.UK’s Current Account Switch Service (CASS) has helped millions of individuals and SMEs derive more value from their current accounts. The recently published CASS report Exploring the future of switching identifies the major drivers and trends that will influence the landscape of current account and financial services product switching. The report, underpinned by Davies Hickman research, considers the possible issues and potential opportunities that a central switching service may need to address in the next five to 10 years. Specifically, it identifies and describes 23 trends set to influence the future uptake of switching in current accounts and financial services products. The expert interviews with financial service providers, as well as the in-depth interviews and quantitative surveys with consumers and SME owners, provide valuable feedback as to how each trend will influence the rate of switching. The results are triangulated against published sources identified in the desk research. Here are some of the trends described in the report.
One trend identified the higher interest rates which incentivise change. Financial services providers respond to higher rates by offering more attractive saving products while their loan products become more expensive. The motivation for consumers and SMEs to switch will rise due to these new offers. Desk research sources, including Investors’ Chronicle Where rates are heading in 2023, concur that the UK economy will not return to an era of very low interest rates in the short term, so the savings and loans switching market may be dynamic for some time.
Another trend focused on the tech-savvy consumers who easily access deals. Increasingly tech-savvy consumers with improved access to digital information easily locate offers and deals to enable them to switch financial products online. Consumers and SMEs have access to social media, comparison websites and the developing automated switching services that assist them with finding the best deals. As one consumer commented, “(I) do a quick Google, Instagram and uSwitch search (when researching products)”.
A third trend recognised the impact of apps targeting customer loyalty. In the CASS report, improved banking apps were identified as a trend that will impact switching although there is uncertainty about the significance of the impact. Banking apps are designed to improve customer tie-in and loyalty by offering features which consumers and SMEs value and the desk research confirms that these apps are generally seen as improving customer loyalty. Providers can communicate more targeted offers to customers via their apps and ease the process of account opening for additional products, which suggests a decrease in switching. However, some of the industry leaders interviewed for the report felt banking apps may also act as an incentive to switch as customers try to find better apps.
Exploring the future of switching is designed to stimulate conversations with those in the switching ecosystem and related key players. The report details the research findings and insights for each of 23 trends and indicates the ways in which financial product switching may change in the short and long term. Most of the trends appear to point towards an increase in switching and this will provide greater financial freedom for consumers and SMEs. CASS invites you to engage with them to explore and discuss the future of the switching landscape, their contact details can be found at the end of the report