Why do customers stay with their banks when they are unhappy? Is there a Stockholm Syndrome in banking? Or are there strings or reasons that keep customers tied to unhappy banking situations?
The Competition Authority of Kenya is undertaking a study to:
…explore and establish if there are any barriers to bank customers switching providers, including, but not limited to, lack of awareness of alternatives, the ability to access and assess relevant information and eventually act on this information to switch, costs of switching, account closure practices and any behavioural biases that may lead to consumer inertia to switch; (c) determine how the barriers identified impact on market development and customer choice;
They will see if laws need to be changed, or what government agencies can do to remove switching barriers, and if there are bank industry practices that need to be addressed.
IMO the largest contributor is lack of awareness on alternatives and services offered by competitors and accompanying fees. For instance, a while ago, Business Daily had a feature on interest rates various banks charge for several types of loans and the differences were significant in some cases, and that was before the increases last year. Then there is location. For some banks you may need to go to a major city e.g. Kisumu from a village around Kakamega if you need the physical bank, say in December during the holidays, while other ‘wananchi’ banks are available in smaller towns and among agents. I think people just need to research more before committing or remaining loyal to a bank for no financial reason.
The bank charges comparison by FSD actually used to run in the daily newspapers every quarter. Kenyan banks were also to switch to APR to help consumers compare rates across banks, but that has not happened
I find that those with loan facilities stick with their banks no matter how bad the services are. Some banks that also focus on particular niches are perceived as inaccessible by those outside the niche.
yes. Just discovered a genuine niche of #ImperialBank that no other Nairobi bank served.