Current account on-boarding weaker than savings and credit cards

By Karen Troubridge

A bank current account in the UK is generally considered a gateway product to deeper, wider relationships between customers and their financial providers.  Almost every adult has at least one current account.

Current account on-boarding is starting to come under the regulatory spotlight.  Switching procedures and customers’ understanding of products and fees are of particular interest. For the financial provider, an effective on-boarding process can significantly shape a customer’s long-term (and potentially profitable) relationship with a bank.  However, as BDRC’s research has shown, opening a savings account, ISA or credit card may well deliver a better on-boarding journey than opening a current account.

BDRC’s Moments of Truth programme reveals that customers are actually less likely to recommend their banking provider following a recent opening of a current account than for a savings account, ISA or credit card. The NPS for opening a current account in the last 3 months (registering at +25 at market level in Q1 2017) has shown a decline in performance over the last 3 years, so it’s getting worse rather than better for customers. This NPS performance lags behind +39 for opening a savings or ISA account and +34 for opening a credit card.

Reasons include the fact that the current account opening experience is felt to be a more difficult process compared to opening a savings account. 14% of those using the switching process (an initiative introduced in September 2013) experienced problems vs. 6% for savings or ISAs.

BDRC’s Current Account On-boarding project followed a cohort of consumers along the stages of the on-boarding journey: researching current accounts, receipt of related materials and activation of online and mobile banking.  This enabled us to unpack the customer experience and identify any pinch points along the journey. Some issues related to all providers.  Others varied between providers, including length of time to receive materials, expectations provided at the outset vs. reality, mistakes in documentation and activation issues for online and mobile banking.

However, many customers proceeded through the entire process without a hitch and were satisfied with their end product, especially with the increasing amount of choice providers offer for incentives associated with their current accounts. Furthermore, banks and building societies were generally commended for their staff helpfulness and knowledge at each key stage, being able to provide guidance if customers required help, general information or encountered problems.

With this in mind, it’s important to recognise that many consumers will open their current accounts online and therefore will miss out on the generally positive impression that staff members provide, especially given this is the ‘relationship setter’ product. With providers coming under increasing scrutiny, and league tables of advocacy about to be published by the regulator, banks still have some way to go to ensure the experience is more aligned between channels, and improved for remote customers.

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