Fall in numbers changing their banks

The number of bank customers who moved their accounts to a different lender fell dramatically last year in spite of increased efforts by policymakers to drive up competition on the high street, according to research.

Data compiled by Accenture, the consultancy, found that 11 per cent of consumers in the UK and Ireland moved at least one product from their existing bank in 2011, down from 16 per cent a year earlier.

An even smaller proportion, 6 per cent of customers, switched their current account. Of those, almost a quarter found the process too slow or complicated.

The figures will come as a blow to the government, which has trumpeted the increase of competition in retail banking George Osborne, the chancellor, has welcomed the arrival of new banks such as Virgin Money, which bought Northern Rock, as a way to increase choice for customers.

The banking industry is working towards a new switching service that should ensure customers can move their current accounts in seven days without any hitches. The service, which was supported in the package of banking reforms laid out by Sir John Vickers last year, should be in place by the end of 2013.

However, critics said it was unlikely to be a “silver bullet” as large numbers of customers have little inclination to move banks. Accenture found that of those who did not switch their current account last year, 90 per cent “had no desire to change providers”.

Its findings came amid fresh claims that banks have failed to win back customer trust after the financial crisis.

Consultants at Oliver Wyman said there remained a severe mismatch between what banks were charging for services and what customers were willing to pay.

“This drives banks to be slightly obtuse – if they made their charging structures completely transparent, no one would want to pay them,” said Matthew Sebag-Montefiore, a partner at the management consultancy.

Meanwhile, a survey of more than 20,000 European adults by Forrester, the market research firm, found that UK banks had some of the poorest relationships with customers in Europe. Under a quarter of British customers felt their bank put their interests above the desire to generate profits, even though some of the biggest institutions have invested heavily in public commitments to improve service.

Meanwhile, perceptions of banks in Poland, France, Germany and even Italy, where banks have been severely affected by the eurozone debt crisis, improved, according to the Forrester poll.

Three British lenders bucked the trend, with the Co-operative Bank, First Direct, a division of HSBC, and Nationwide Building Society rated highly by customers.