Money. Credit: Martin Kingsley/ flickr

By Rich Bowden:

Research conducted in New Zealand has exploded customers’ preconceptions that switching banks is a difficult and expensive procedure.

Dr Claire Matthews, who researched the subject for her Doctor of Philosophy in Banking Studies at Massey University‘s Centre for Banking Studies, questioned nearly 3000 New Zealanders on their attitudes to switching banks and compared it to her own research on the financial and non-financial costs of moving to another financial institution.

“As well as looking at the financial cost of switching, I looked at the relational and procedural costs,” she said in a Massey University news release. “Interestingly, people’s perceptions were that the financial cost of switching banks was high when in fact it is not because the new bank often waives fees or contributes to legal costs to get new customers.”

Yet people’s perceptions of switching banks remained negative said Dr Matthews. “Even those who had changed recently and had a good experience thought that was a one-off and that it would be more difficult next time.”

She added that her research into the subject could assist banks in facilitating the procedure for changing. One aspect on which her research focused was the amount of extra paperwork customers needed to complete for their new account. Dr Matthews suggested methods to reduce this inconvenience including canvassing the possibility of portable account numbers, as is now required for cellphone service providers.

“It would make life easier for the customer, but for banks it could be a double-edged sword because not only would it make it easier for new customers to transfer to their bank, but easier for current customers leave to go to another bank.”

Dr Matthews is a senior lecturer in the Centre for Banking Studies who worked in the banking industry for 12 years before joining the University in 1996.

Tags: changing banks, massey university, nz banks, switching banks