Desire for online banking causing current account holders to look elsewhere

Gaining the opportunity to deal with their finances over the internet is one reason why an individual may decide that a change of current account is needed, according to research.

The Co-operative Bank quizzed 2,000 adults and asked them for an indication as to why they would change the location of their current bank account.

Moving to a high interest current account may prove a common reason for people looking to get the most out of the money that they have not spent, but banks may also have to improve in other ways to keep customers on board.

Some 29 per cent of respondents stated that poor customer service has driven them to open a current account with a different provider.

Meanwhile, 23 per cent were looking for a more interactive experience from their accounts and changed to a new supplier that offered online banking opportunities.

John Hughes, business leader of retail products for the Co-operative Financial Services, believes that nowadays people are less likely to remain loyal to a UK current account provider for life and instead will shop around for a deal that is a better fit with their individual needs.

He said: "The findings clearly show that customers are now increasingly likely to switch their bank account, if they are unhappy with the service, facilities or ethos of their provider.

"Historically many people chose their banking provider when they were younger and stayed with that provider throughout their life.

"However, now more than ever consumers should review their banking products as their personal circumstances change to ensure that their account suits their financial needs and service requirements."

Alternate reasons cited by the survey's respondents included moving to a bank that was closer to home, while a more transparent charging structure took on increased importance for others.

Alongside the obvious convenience of online banking as it can be completed from an individual's home rather than braving the possible wind and cold, there are other reasons why people may want to deal with their money online.

Having the opportunity to transfer money between accounts over the internet may prove especially helpful if a person runs into financial difficulty on holiday.

This is because a person can log-in to their account and transfer money instantly from one of their other accounts to clear their current account debt and make their wanted payment.

Mr Hughes added that in the past bank account holders were unwilling to switch providers because of the amount of time the process took.

But with banks now making life as easy as possible for individuals in order to secure their custom, this reluctance has now vanished.

He said: "In the past moving a current account often seemed daunting, but actually, most banks now do all the work, including transferring all direct debits and existing balances, which makes the process much easier for customers."