Why most of us are reluctant to switch banks, even though it could cut our environmental impact

Beyond cutting back on meat or using the jump to an electric vehicle, another way consumers can reduce their environmental impact is to switch to a green bank. It’s a lifestyle change that could deliver powerful effects — removing money from the fossil fuels pipeline — for little effort or inconvenience.

- BY MARCEL LUKAS

Yet it has been claimed that people in the UK are more likely to get divorced than switch banks — despite there being services that make changing your current account easy.

The UK’s seven-day Current Account Switch Service (Cass), in operation since 2013, has completed more than 11.6 million switches, including over a million in the year to March 2025. The service switches your incoming and outgoing payments including salary payments, direct debits and standing orders.

Cass reports that 99.7% of these account switches were completed within seven working days — and nearly 90% of people who used the service were satisfied with it. Yet relative to the whole UK population, the number of people actually switching remains modest. The process works, but behaviour lags.

A set of well-documented psychological tendencies help to explain this gap.

“Prospect theory” shows that people weigh any potential losses more heavily than equivalent gains. This tilts people toward staying with their familiar provider when a change involves any chance of disruption or error.

The “endowment effect” increases the subjective value of someone’s existing bank account, simply because they already own it.

Many people’s status quo bias turns hesitation into inertia, because departing from a default requires attention and effort. And our usual bias towards the present adds a timing problem: the admin is immediate while the benefits arrive later and accrue gradually.