Trust in building societies remains solid

Public trust in building societies is solid and has been boosted by the current, almost daily, diet of unfolding bank scandals, according to independent research commissioned by the Building Societies Association.

The survey amongst 2,000 UK adults shows that over the last month 79% of consumers say their trust in building societies has stayed the same or increased, whereas 66% of consumers say their trust in banks has fallen.

As a result, 16% of customers of the big five banks say that they have already switched provider or are likely to do so.

Current accounts

Of those who said they were likely to switch their current account as a result of recent events 24% said they would move to a building society, which is ironic as building societies have less then 10% of the current account market and is not traditionally their core area.

The majority (47%) said they would move to another big bank while 21% said they would move to a small bank. Only 3% said they would move to a credit union and 2% said they would keep their cash at home.

Savings accounts

Of those who said they were likely to switch their savings account as a result of recent events 38% said they would move to another big bank and 36% would move to building society.

A further 15% said they would move to a small bank, 6% would go to a credit union, 2% would opt for a peer to peer lender and 4% would keep their cash at home.

Comment

Adrian Coles, director-general of the Building Societies Association, commented: "It is clear, from the results of this survey and the direct experience of our members, that large numbers of consumers are now looking for a different approach to financial services. Many people are finding what they want at a building society, other mutuals or ethical banks.

"Of course we welcome the opportunity to communicate the difference that membership brings and to welcome new customers. My concern however, is that in the long term, if this crop of scandals at our banks continues both the economy and the financial services sector as a whole will be damaged.

“The balance between speed, transparency and probity in relation to these issues is a delicate one and we are relying on both government and regulators to navigate carefully."

Mutuals account for 22% of retail deposits in the UK and 34% of cash ISAs.