Annus Horriblus for British Banking as hundreds of thousands move away from the big banks and 14m could switch next year.
Hundreds of thousands of customers have moved their current accounts out of the big 5 banks in 2012 as public confidence in the British banks sector collapsed in the wake of a string of scandals.
These figures come following a report from the Banking Commission whose investigations ‘…revealed a culture of culpable greed, far removed from the interests of bank customers, corroding trust in the entire financial sector.’
According to evidence received by Move Your Money, building societies, credit unions and co-operatives have all reported a sharp rise in new business over the past 12 months. 500,000 people moved in the first half of this year.Â In the last quarter Building societies report a 78,000 increase in savings accounts. The Cooperative Bank has seen a jump of 43% in new accounts in the last year and Credit Unions have seen 20,000 new members.
Whilst a recent YouGov poll shows that as many as 14 million people could switch accounts in 2013 as new regulation and comes in which makes switching accounts easier.Â Almost one in three of UK high street bank customers said that they would be very or fairly likely to switch providers if the process of moving their primary current account was made easier.
“Public trust in the big banks has collapsed.Â The reputation of one of our leading industry’s is in tatters.Â Ultimately customers are on the front line of the battle to save British Banking, by moving their money to banks which are fair and transparent they are forcing banks to think twice about the way they behave.Â Cultural change doesn’t come from Whitehall or the boardroom, it comes from people realising the power of what’s in their pockets. ” said Laura Willoughby MBE, Chief Executive of Move your Money.
Move Your Money – a campaign to encourage individuals and businesses to take their cash away from the biggest offending banks and put it elsewhere – warns that banking will continue to make scandalous headlines well into 2013.
Laura Willoughby added: “if you think news of this years banking scandals was unbelievable, there is more to come.Â From RBS fines for the LIBOR scandal through to further exposure of mis-selling products to customers – big banks will continue to lose ground when it comes to public trust.
”The Government debate and vote on banking reform next year should expose the depths banks will go to fix and scam to boost their profits. The only way for customers to show their anger is to move their cash elsewhere. What else can we do when it appears that banks are not only too big to fail but also too big to jail.”
Local, Ethical alternatives reap the benefits
Research shows that mutual and ethical banks are benefiting from the collapse in trust in high street banks.Â The Building Societies Association reported their members added 78,000 new savings accounts in the quarter following the Libor scandal alone.
The FSA reported a 59% increase in complaints against big banks in the first half of 2012. In stark contrast, a report by the Building Societies Association found that customer satisfaction and trust in mutuals compared to banks had increased by up to 22%.