Is Switching Banks Easy? Perception vs. Experience

25 Pages Posted: 25 Aug 2008

See all articles by Claire D. Matthews

Claire D. Matthews

Massey University - School of Economics and Finance

Chris

Massey University - College of Business

Malcolm Wright

University of South Australia - School of Marketing

Date Written: August 18, 2008

Abstract

Attracting customers from other banks is important for banks in markets such as New Zealand, where there is a very small proportion of the population that is unbanked. However, limited research exists to understand the expectations and experiences of bank customers in relation to how easy switching banks is. This paper reports findings on these expectations and experiences drawn from a larger study that explored a range of issues related to switching banks, using a mail survey to 2983 people in New Zealand.

We find that, overall, switching is not expected to be either easy or difficult, although in practice it is found to be somewhat easy. Expectations related to how easy switching banks will be do not have any relationship to the likelihood of switching. Those who had switched recently were found to perceive switching costs to be lower than those who had not switched.

Keywords: Switching costs, Ease of switching, Banking, New Zealand

JEL Classification: D12, D14, G21, M31

Suggested Citation

Matthews, Claire D. and Moore, Christopher Ivor and Wright, Malcolm, Is Switching Banks Easy? Perception vs. Experience (August 18, 2008). 21st Australasian Finance and Banking Conference 2008 Paper, Available at SSRN: https://ssrn.com/abstract=1236464 or http://dx.doi.org/10.2139/ssrn.1236464

Claire D. Matthews (Contact Author)

Massey University - School of Economics and Finance ( email )

Private Bag 11-222
Palmerston North, 30974
New Zealand

Christopher Ivor Moore

Massey University - College of Business ( email )

New Zealand
+64 9 4140800 (Phone)
+64 9 4418150 (Fax)

Malcolm Wright

University of South Australia - School of Marketing ( email )

Australia

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