Breaking up with your first bank: Your loyalty is probably costing you money

We stay loyal to our local baker who knows the bread we like, or the corner shop that kept us going during lockdown. Loyalty feels good - like we’re supporting something familiar, even personal.

But what happens when loyalty feels one-way?

New Zopa Bank research reveals that one in five Brits are still with the first bank they joined; often they signed up as teenagers for a free pen or piggy bank.

Even more surprising, over 40% have never considered switching, despite growing dissatisfaction with traditional banks.

Unlike the trusted baker or newsagent, your bank might not be giving you what you deserve in return.

Why do we stay with our bank?

Part of the problem is psychological: banking can feel “set and forget,” and switching accounts feels like a hassle. We have all our direct debits and payees setup, and we trust the big establishments to keep our money safe.

So, the bar for switching is high; short-term, one-off incentives are not good enough, especially amidst economic pressure.

With inflation stretching household budgets and interest rates fluctuating, we’ve observed that consumers are rightfully rethinking how and where they manage their money.

They’re becoming more discerning and seeking out the best rates for savings, more flexible borrowing options, and better digital tools to manage everything from bills to credit scores effortlessly, from the ease of their phones.

And as a result, they end up with multiple accounts and finance apps, trying to bring it all together themselves – adding more stress.

People’s expectations are now shaped by tech platforms that prioritise value and ease. They want their bank to be intuitive and to provide value without friction, while making sure that their money is safe.

It’s in this context that we developed Biscuit - Zopa’s flagship, free current account. But the goal wasn’t to reinvent the wheel. It was to challenge the idea that a bank account should just be a place to park your money and hope for the best.

Instead, we created an account that delivers guaranteed, consistent long-term value while making it as easy as possible for our 1.5 million existing customers and new customers alike.

With Biscuit, we’ve focused on rewarding behaviours that people are already doing: paying bills, managing their balance, and saving each month.

It offers 2% cashback on bills, 2% interest on current account balances and access to a 7.1% savings rate on regular monthly deposits; all delivered through a streamlined app where an account can be opened for free in minutes, virtual cards are instantly accessible, and with no fees to maintain the account.

Customer service is always available too, whether you need an online chat or a phone call.

Moreover, we compared Biscuit against 15 traditional and digital UK banks, accounting for real-life usage. The result? Our customers could earn up to £256 a year in ongoing financial value, which is nearly 5x more than the average high street bank, even without factoring in one-off switching bonuses.

Ultimately, this isn’t about one product. It’s about recognising that the way people manage money has changed and banks must keep up, rethinking how they provide ease and value, and how they reward customers to ensure deep, long-lasting relationships with them. 

If you’ve never considered changing banks, now is the time to reconsider what your bank is doing for you.

________________________________

Merve Ferrero is the Chief Strategy Officer of Zopa Bank

LBC Opinion provides a platform for diverse opinions on current affairs and matters of public interest.

The views expressed are those of the authors and do not necessarily reflect the official LBC position.

To contact us email opinion@lbc.co.uk