Most people do not shop around for bank accounts or financial products like loans, a survey carried out by the Economic and Social Research Institute has found.
The survey was based on a national sample of almost 3,000 consumers carried out by the ESRI’s Behavioural Research Unit.
It was commissioned by the Department of Finance as part of a campaign to raise awareness about switching banks and providers of financial products. It was funded by AIB and Permanent TSB as part of EU restructuring plans for the banks.
The survey found 73% of consumers did not shop around when it came to choosing their bank accounts.
This percentage was 68% when it came to loans and 74% when it came to credit cards.
Around 46% of consumers said they did not compare offers on mortgages, despite what the study says are “differences in interest payments that can add up to tens of thousands of euros”.
Switching rates range from 6-17% of customers.
Difficulties cited by consumers include “difficulty comparing offers, time, uncertainty about the process” and “worries about making a mistake”.
The report’s authors say shopping around “appears to be a habit” with those who compare offers initially more likely to switch in the future. The main motivation cited is to save money.
Professor Pete Lunn of the ESRI said the next stage of the project is to design digital tools “to help people understand the market better” and “to feel confident enough to shop around.”
They’re typically just going with their provider, Professor Lunn told Morning Ireland, even though they could save thousands of euro by going with a different financial provider.
“They’re typically just going with their own bank or with a recommendation from friends and family and when that comes to loans and credit cards and bank accounts themselves, you’re talking almost three quarters of purchasers are not actually shopping around.”
Professor Lunn said often people aren’t confident enough to compare financial products and they are afraid of making a mistake.
However, he added, it’s much easier to swap than people think.
He said the State provides a financial product comparison site – the Competition and Consumer Protection Commission.
“Given recent interest rate increases, mortgage holders in particular have a strong incentive to look at potentially better value options and I hope the findings will encourage many to do so,” Finance Minister Michael McGrath said.