UK customers more likely to switch banks than European peers

UK bank customers are more likely than their European counterparts to hold multiple accounts, including with fintechs, according to new research by consultancy Kearney. 

The study, which compiled data from more than 6,600 bank customers in 13 European countries, found that while on average the majority of retail customers still bank with only one lender, there are large differences across the region, with 63 per cent of customers in the UK having relationships with multiple banks. Meanwhile, in Austria, 77 per cent of customers rely on only one financial services provider.

The report also found that UK customers are more likely to switch their primary current account, with 15 per cent having done so in the past year, against a European average of 73 per cent of customers who did not change their primary bank in the previous five years. One in five of the customers who switched their primary bank in the past five years moved to a digital bank or fintech.

UK customers are among the most likely to switch banking services providers to a non-legacy institution, with 33 per cent of respondents in the UK having a primary or secondary account with a digital bank or fintech, behind only Sweden and Romania, and well above Europe’s average of 25 per cent.

More broadly, three-quarters of European respondents (76 per cent) who switched their bank accounts in the past year say that they have also opted to move some other products to the new bank, with savings and credit cards being most popular. According to the report, savings accounts or deposits are the most-moved products by UK customers, with 47 per cent being switched to the new primary account.

Younger customers seem particularly open to digital banks, noted the report. 

Kearney partner Roberto Freddi said in the report that banks should be “particularly careful” about their younger customers, as increasing numbers of them are choosing fintechs for their flexible offerings. 

“While incumbent banks are benefiting from customer loyalty across Europe, there are clear signs to suggest that they must not take this loyalty for granted, as more and more people decide to switch to digital banks,” he said.

Digital banks and fintechs have grown over the past few years, the study noted, while also pointing at the expansion of firms like Revolut.