Is it worth switching banks?


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Customers change their favorite brands when they feel disappointed or when another brand offers higher satisfaction. Thus, the pursuit for higher satisfaction results in customers seeking new products and/or new companies. This possibility is offered by the fact that there is not much of a hassle involved in switching between physical products. Consider what you did when you wanted to change your favorite chocolate or juice or whatever else you have changed. Was it time-consuming? Did it cost you anything? Did you have problems finding another product that is similar or even better? Hopefully, the answer to all these questions is “No”.

Now ask yourself – why don’t you switch to another bank? Are you really satisfied with your bank? If you are satisfied with your bank, then stop reading. Otherwise, continue. Unlike physical products, switching banks has been a time-consuming process until a couple of years ago. Not many people were eager to go through the entire process of changing banks, regardless of their possible dissatisfaction with their banks. For this reason, some banks became “customer lazy” banks. Meaning that they were focused on attracting new customers and forgetting about the existing clients.

Nowadays, technological innovation, an increase in awareness of customers regarding their needs, changes in customer preferences, and increased competition in the banking industry have changed the process of switching banks. This means that it is much easier to change your bank today, and most likely, it will become even easier in the future. The constant pursuit for new clients has resulted in banks offering to cover the process of changing banks for you. An additional benefit is that many banks offer some kind of reward (cash reward) in case you transfer your paycheck and savings to their bank.

What comes next is to ask – if it is worth changing your bank? A single unified answer could not be provided to this question. The reason is that each and every one of us has a different perception about the adequacy of his/her bank in relation to his/her needs. Consider, for example, the need of your grandparents, your parents, and your needs (or your children’s needs). Is there any difference? Most probably, one would like to have a bank offering technological solutions, and another would look for low fees or face-to-face communication, etc.

Although a unified answer could not be provided, there are some general issues that should be considered before changing banks or from time to time to see if you should switch to another bank. You should consider the following:

  • The fees you are paying for the services – you should always compare your bank’s fees with the fees of other banks. Don’t think about these fees as a small amount because they could be a substantial amount on a yearly base.
  • Consider the interest rates you are paying on the overdraft as well as loans. Go through the interest rates asked by other banks periodically. Maybe you could find a cheaper loan to refinance your existing debt, thus saving on the interest rate charge.
  • Consider the interest rates you are receiving on your savings account – a small percentage difference could mean a substantial difference in your overall savings amount in the long run.
  • Technologically proactive bank – look at your bank’s technological solutions and services in relation to those offered by other banks. Is your bank keeping pace with new technology? Is your bank offering the newest technological services (mobile banking, online payments, online application, etc.)?
  • Customer service – is your bank offering adequate customer service? Are you able to resolve any possible disputes in a short time? This is the part that many clients do not consider important. The truth is that when a problem appears with some transaction, usually it is the most important transaction (Murphy’s Law). Thus it will require a solution as fast as possible.

Considering the above issues should serve you as a decent base to help you decide if switching ban is worth the effort. But keep in mind that you should not switch banks very often because it might signal a lack of stability in your behavior.

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