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Only 9% switch banks: study

Johannesburg - Despite countless threats to switch banks, a new study has found that only 9% of South Africans have done so over the past 12 to 18 months.

According to the 2010 Banking Innovation Study conducted by Innovation Agency, banks were cause for frustration for intangible attributes like customer service and negative perception. Yet, with regards to switching banks, only a small proportion had put their money where their mouths were.

"This indicates that there is still a degree of loyalty or perhaps that switching is too difficult and inconvenient. A combination of both is probably the case, as customers would rather stay with the bank they know, despite bad service levels, than switch to a bank they are unfamiliar with," Innovation Agency said.

Despite similar ratios and reasons for switching banks, females were more likely to switch banks than their male counterparts. "This suggests that men would much rather complain and make a noise about their dissatisfaction rather than actually switching. Women, on the other hand, will quietly switch banks while being far less vocal," the study's compilers said.

FNB was perceived as leading in innovation, with opportunities and new products including PayPal and inContact services such as sms notifications. Standard Bank Group [JSE:SBK] had made progress since 2009, closing the gap on FNB. Retail bank and newcomer Capitec Bank Holdings [JSE:CPI] appeared on the rankings for a second year running.

Outside of the big four banks, Capitec received the highest rating for being the most innovative bank, and in some categories made it to the top four. Capitec received the biggest rating as the most innovative bank among people whose income was below R250 000 per annum, ahead of Nedbank Group [JSE:NED].

"This is one of the big surprises as Capitec is generally regarded as a low-income bank yet is clearly making an impression on people earning up to R250 000 per annum, which is very squarely in competition with the traditional big retail banks," said CEO Rory Moore.

The study revealed that young people found FNB to be the most appealing. This under-30s group rated FNB the most innovative - an indication of the bank's appeal to this generation.

Under-30s are also the biggest group to indicate a concern for high banking fees. According to the results, the youthful generation is the most price-sensitive.

Standard Bank had the biggest appeal with an older generation who found this particular bank most innovative for its customer service, the study found. "This suggests that people over 50 already have the products they want and for them the biggest sell around banking is customer service," Innovation Agency said.

The study was conducted on men and women aged predominantly between 25 and 50 and falling into an income bracket exceeding R150 000 per annum.
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