Switching the measure

This report assesses how the current account market is performing for vulnerable consumers.

Policy measures have typically focussed on the average consumer and the headline switching rate. But these broad metrics mask a diverse range of outcomes experienced by people across the market.

They also conceal the problems that persist for many vulnerable consumers who may find themselves facing high charges, difficulties engaging with the market, or total exclusion from retail banking. These consumers are least likely to switch or engage with suppliers and often have the most to gain from doing so. Yet their particular experience doesn’t get enough attention, because of the excessive focus regulators and others put on broad, marketwide measurements of consumer activity.

We define a vulnerable consumer as a person who is more likely than other consumers to experience a bad outcome in the market, such as high costs and charges, inability to get a good deal, poor customer service or marginalisation in the market. Much analysis of vulnerability dwells on the nature of the vulnerable: their age, education, income, and so on. But this report argues that focussing merely on the demographic characteristics of consumers is the wrong approach. Instead, regulators, policymakers, providers and third parties would be better to focus on how consumers interact with and behave in the market. By looking less at who consumers are and more at what they do, we can better identify vulnerable consumers and intervene effectively.

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