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Personal advice counts most when changing banks

Price is far down the list on reasons why people change financial institutions, Finansforbundet’s survey to over 1,100 private customer advisors shows. “The financial product is very much security. Therefore, good personal advice weighs the highest with most customers”, says Vice-President of Finansforbundet Michael Budolfsen.

8. Nov 2021
3 min
Af Carsten Jørgensen
cjo@finansforbundet.dk

86 per cent respond that personal advice is typically the most important reason that customer choose to switch to their bank. Recommendations from family and friends follows right after with 85 per cent, while image (30 per cent) is the third most important reason why customers choose to switch to their bank.

This is how over 1,100 private customer advisors responded to a survey conducted by Finansforbundet on competition in the financial sector. The respondents could provide up to three possible answers to the question of what the most important reasons were for customers to choose to switch to their bank.

You have to get all the way down to sixth place to find a reason having to do with price (interest rates on loans), as shown in the fact box below the article.

Michael Budolfsen, Vice-President of Finansforbundet, is not surprised that personal advice means much more to the customer than price.

“If you as a bank customer focus only on price, you will typically be served by an IT system and not by a well-trained person. The financial product is very much security and therefore good personal advice weighs the highest with most customers”, says Michael Budolfsen.

Easy to switch banks

He points out that it is very quick and easy to switch banks today. Customers know this and they also do not mind changing banks. But they would prefer to have the same advisor they are happy with.

“There are many examples of a skilled advisor changing from one financial institution to another and some of their customers following them to the new financial institution. It’s about the trust and security they have built up with the advisor”, explains Michael Budolfsen.

He says that it is important to dispel the myth that price is the only important parameter in terms of the customer relationship with a financial institution, which this survey is excellent proof of.

Reasons for switching banks

What are typically the most important reasons customers choose to switch to your bank? Select up to three options.
Personal advice 86%
Recommendations from family or friends 85%
Image 30%
Digital tools 20%
Physical branch close to the customer 20%
Interest on loans 17%
Higher credit rating 5%
Negative interest rates on loans 4%
Advertising campaigns 2%
Don’t know 1%

(Finansforbundet’s survey to over 1,100 private customer advisors in August and September 2021)