Hard to say goodbye
Too much hassle or laziness? No matter how badly banks treat us, we won’t leave them
An anticipated mass exodus from Ulster Bank last summer after its “technical glitch” never happened. Photograph: Frank Miller
Greedy or stupid bankers (or both) brought this country to its knees and the institutions continue to make fools of us by harassing distressed borrowers with impunity, reducing the level of customer service they offer and imposing ever higher charges on people who have already dug very, very deep to bail them out.
Yet no matter how badly they treat us, we won’t leave them.
Research by Amarach Consulting last year shows that Irish consumers are four times more likely to switch car insurance provider or utility company than their main current bank account and, according to a study by the National Consumer Agency (NCA) this month, just 4 per cent of Irish consumers switched banks last year.
So 96 per cent of us stayed loyal to our bank despite the fact that they did absolutely nothing to deserve that loyalty? That’s mad, Ted. The most striking recent example of this misplaced loyalty centres on Ulster Bank. In June last year the State’s third largest bank effectively stopped working. Hundreds of thousands of its customers were frozen out of their accounts for weeks while it made a pig’s ear of dealing with what it claimed was “a technical glitch”.
Promises about a solution were made and repeatedly broken, direct debits went unpaid, salaries never landed in accounts and online access disappeared.
Short of calling around to each customer’s house and spitting in their face the bank could not have shown more disrespect to the people who trusted it.
Yet in spite of this catastrophic failure when payback time came the vast majority of its customers stayed put.
“We anticipated a mass exodus from that bank last summer,” says Mark Nolan, managing director of Amarach. “But it never happened. What happened instead was post-rationalisation kicked in and people started telling themselves that all banks were the same and it could have happened to any of them.”
If we won’t switch in those circumstances when will we switch?
“Put simply, people don’t care enough to make the switch and they don’t think there is a blind bit of difference between banks,” says Nolan. “We are, ultimately, impatient and lazy – even waiting a half a second for a webpage to load is too much for some people, even having to read a form is seen as too much effort. It is the human condition.
“We all know what we should do but we don’t do it. When it comes to switching banks there is always going to be paperwork, and if many consumers have to do anything more than push a button or sign a form they don’t want to know – the mental bandwidth needed to make the change is just not there.”
An NCA spokeswoman told Pricewatch a key barrier to switching current accounts is the perceived hassle. “Other factors the research identified that may discourage people from switching their current account include the perceived difficulty of switching direct debits, confusion around picking the best account and having other accounts with the same institution.”
The inertia is also partially down to fear, according to David Kerr of comparison website bonkers.ie “There is a huge fear of important things being overlooked. People are afraid that if they make a switch direct debit payments will get missed or wages won’t get lodged into their accounts.”
He says the fear, while understandable, is misplaced. “In every circumstance people should take care of their bills and make sure they are not paying more than they have to. If we don’t do that then the banks will continue to extract money from us and they will never be incentivised to give us better value for money.”