Consumers reluctant to switch banking to Tesco
Tesco’s plans to expand its financial services offering may struggle as a study states only a smaller percentage of consumers would definitely switch their current account to the supermarket.
Tesco is looking to move deeper into retail banking through its Tesco Personal Banking brand which could see it add mortgages to its portfolio.
However, only 8% would either definitely or be very likely to switch their current account while nearly a third (30%) said they definitely would not or were unlikely to switch, according to a study by investment bank Morgan Stanley
The pattern was repeated when people were asked about switching savings account, with only 9% definitely or very likely to switch and only 3% likley to change their mortgage.
Despite the reluctance to switch, Tesco outscored all major high street banks on customer service.
The retailer scored an average of 3.45 out of 5 on customer service compared with the best placed financial services provider, Nationwide Building Society, on 3.2.
Tesco’s plans also have the support of nearly half those questioned, 46% believe it would be good for the supermarket to set up in competition with the banks.
One of the major stumbling blocks for Tesco and indeed any new entrant into financial services appear to be inertia.
A massive 92% of respondents have not changed their current account provider no more than once in the last ten years.
Morgan Stanley surveyed 2,000 people last month.
