Personal Banking Incentives: Will They Make an Impact?

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Current accounts are about to become more competitive, but are consumers ready for change? Credit: A John

Increasing Banking Diversity in the US

Similar actions are being taken in the US by corporate giant Walmart. Suggesting that banking reforms and customer-led incentives are set to become a worldwide phenomenon, the chain this month unveiled plans to rival traditional current accounts by teaming up with American Express to offer banking service Bluebird, predicting that a transparent policy on withdrawal and account fees will target those unhappy with their current method of banking.

Financial Reforms: Will They Work?

Regulators and large retailers hoping to revolutionize the banking market would say that they can, and will. A Decoded Science survey (of UK-based current account users, aged 25 to 60) in October 2012, however, found that over 70% of customers questioned had held a current account with the same bank for more than ten years, and have no desire to switch.

Of the 13% who indicated that they had considered switching accounts as competitive overdraft rates and fees are introduced into the banking market, none had gone so far as to make the change. With the OFT putting pressure on banks to implement improvements in the interest of consumers, it may take a lot more than a debit card with a picture of the account holder’s family emblazoned on it to change the mindset of the general public.

Sources:

American Express and Walmart Launch Bluebird: a New Alternative to Debit and Checking Accounts. (2012). Walmart Press Release. Accessed October 26, 2012.

M & S Bank Opens its First Branch in Marble Arch Store. (2012). Marks & Spencer Press Release. Accessed October 26, 2012.

OFT Launches Review of Personal Current Account Market. (2012). OFT Press Release. Accessed October 26, 2012.

U.K. Office of Fair Trading. Personal Current Accounts in the UK. (2012). Accessed October 26, 2012.

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