Swiss don’t switch banks: Bank customers don’t care about high savings interest rates

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Differences in individual financial institutions’ savings interest rates rarely encourage bank customers to change their banking relationships. One reason for this is that only a small portion of customers even know their institution’s current interest rates, as a survey by the Lucerne University of Applied Sciences (HSLU) shows.

As the HSLU report “IFZ Retail Banking Study 2023” published on Thursday reminds us, the interest rate level in Switzerland has changed significantly since mid-2022, with significant interest rate hikes by the Swiss National Bank (SNB). Recent months have seen marked differences in interest rates on savings accounts, as well as fee levels for basic packages that include accounts and cards, for example.

Interest is not important

In a representative survey by HSLU, most people said they would transfer their money to another bank if there was a 0.5 percentage point difference in interest rates. But only seven percent know the savings interest rate at their main bank. Accordingly, there has been no significant change in customer funds yet. Even the now significant interest rate differences between private accounts and savings accounts are often not taken advantage of.

Moreover, prices and interest rates are still not the only criteria when choosing a housing bank. Product offerings and services continue to play an important role in bank selection; Therefore, banks that focus unilaterally on price or interest rate can only attract a limited number of customers.

Postfinans appeals to price-sensitive customers

According to the HSLU study, certain patterns can be identified when choosing a home bank. For example, Raiffeisen banks increasingly attract people who attach great importance to the brand and value personal advice. Postfinance, on the other hand, appeals disproportionately to price-sensitive people, while large banks appeal to people who pay attention to the level of interest rates. The customer base of cantonal banks is less clear, making it easier for them to satisfy their customer groups.

The rising interest rate level has also increased the interest business of banks this year, HSLU writes based on a study of the balance sheets and income statements of 90 banks. In 2023, average interest margins are likely to exceed the 1.3 percent limit again. The interest margins of Swiss banks were last at this level in 2016 and subsequently decreased to 1.1 percent.

Low cost/revenue ratio

The strongest key figures among retail banks in the survey are shown by various smaller banks with balance sheet totals of less than 700 million francs, such as the Caisse d’Epargne d’Aubonne, the savings bank Affoltern iE or the Clientis savings and loan. bank Thayngen. These shine, for example, with a low cost-income ratio or a high interest margin, but also with above-average capital use. (pbe/SDA)

Source :Blick