Consumers opt for trusted names to run bank accounts

A new report by comparison site uSwitch suggests that the reputation of high street banks is so low that most of us would rather bank with a department store or supermarket.

The report says that many of us would prefer to bank with a household name that has established trust with consumers in other areas.

John Lewis, Asda or Tesco are all seen as better options than the tainted high-street banks who have been rocked by a series of scandals such as PPI and the Libor rate-rigging, that has seen trust in them fall to an all-time low.

The report shows that less than ten per cent of people believe that banks offer them the “best value for money”.

1,300 people were asked which brands they thought were the most trustworthy if the company moved into banking and offered current accounts.

Almost three quarters, 74.5 per cent said that they would trust the John Lewis Partnership, the department store. 46.3 per cent said that they would trust Waitrose, whilst 35.9 per cent said that they would trust Asda to look after their money.

Morrisons, House of Fraser and Amazon also rated higher than the high street banks.

The findings revealed that just 37 per cent of customers believe that they receive good customer service from their bank. The higher levels of expectation of a good service from supermarkets and department stores could come from receiving better service from those stores in other areas.

The findings suggest that investment by other companies in the personal finance and banking sector could prove to be a success as millions of customers express anger and dissatisfaction with their banks.

However, historically, customers do not follow with their feet and switch current accounts. The new pretenders to the current account market, should they wish to enter the market, need to find a way to actually persuade disgruntled customers to switch.

As yet, no serious rivals have emerged to challenge the established high-street banking giants such as Barclays, HSBC, Lloyds, Santander and the Royal Bank of Scotland (RBS).

New entrants include the Metro Bank, established in 2010 and now with 150,000 customers and Virgin Money, which took over Northern Rock last year. Marks & Spencer are set to launch a new current account in October that will charge customers between £15 and £20 a month.

Michael Ossei, from Uswitch.com said: “It is a telling reflection of the UK banking industry that consumers are willing to put their trust in brands that have no previous banking experience.

“Consumer confidence in banks has been battered these last few years and recent scandals and IT fiascos have done little to win customers back.”

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