Over two thirds of people plan to swap their financial products or providers for ones that provide a better deal or improved communication channels. That’s according to the recently released Switching Up survey from Experian.

Switching is driven predominantly by consumers unable to afford the payments or the cost of their existing commitments, with 83 per cent saying they need to change financial product or provider for this reason. Financial products most likely to be switched are car and home insurance along with utility suppliers.

The findings highlight the need for providers to better understand their customers in terms of what they can afford, especially with increased regulatory focus on responsible lending and treating customers fairly. Other key drivers of switching highlighted in the survey were the quest for additional benefits (77 per cent), a cheaper price (71 per cent) and better customer service (63 per cent). The younger age groups are the most switching savvy. Almost three quarters of both the 25-34 and 35-44 age groups (71 per cent and 73 per cent respectively), with the majority living in Scotland (76 per cent) or Yorkshire and Humber (75 per cent), are planning to make a swap in the next 12 months.

Experian’s Mosaic classification reveals that switching will be highest amongst the ‘Careers and Kids’ group, primarily consisting of young married couples and cohabitees who have young children. Four fifths of this group plan to find an alternative for at least one of their financial products. Switching will also be high amongst the ‘New Homemakers’ group , mainly one-person-households of varying ages who live in homes which are likely to have been built only in the last five years. They account for over three quarters of switchers. Homeowners and those with mortgages on their properties are more likely to look around for a better deal (73 per cent) than renters or people that live at home (64 per cent) with their families (60 per cent).

With the car insurance market now notoriously competitive, in part due to the growth of aggregators, consumers want to shop around for the best value policy. Sixty one per cent of car insurance customers say that they will switch this year to obtain a cheaper price (73 per cent) or additional benefits (68 per cent), making car insurance the product that will experience the most churn. Home insurance is the second most popular product to change, with 53 per cent of consumers planning to do this in the next 12 months, followed by gas and electric suppliers (34 per cent).

Jonathan Westley, managing director of Experian’s Consumer Information Services UK & Ireland, comments: “This analysis highlights the extent of the challenge financial services organisations face in trying to understand the credit risk of customers, as well as whether the products they are being offered are suitable to them. With greater focus on lenders to ensure their affordability assessments are as accurate and robust as possible, they must use all the data available to them to ensure they are making realistic judgements of a consumer’s ability to fund debt, both in the short and long term.”

Share Story: