CUSTOMER loyalty to banks is rapidly disappearing following aggressive rate-cutting by lenders, a report said yesterday.
Datamonitor, the market analyst, found that 90% of banks said the number of people who switched to other providers was increasing.
However, the report said banks only had themselves to blame for the trend after encouraging customers to switch to take advantage of better rates, rather than rewarding loyalty.
It said this ''shortsighted strategy'' had backfired and customer defection was now plaguing the market.
Oksana Selezneva, author of the report, said: ''Customers feel very little loyalty to their banks, and they happily shop around for financial products and services that suit their needs.''
The highest defection rates were in personal loans, with nearly a quarter of people changing lender within a year of taking out a loan.
Credit card holders were the next most ''promiscuous'' customers, with 23% switching provider within a year of taking out a new card.
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