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Aug 8, 2006
According to a new study conducted by
researchers from the University of East Anglia and the University of Surrey,
converted building societies have introduced and withdrawn deposit accounts
with far greater regularity than other financial services firms. This trend has
created confusion among customers, discouraged the use of deposit accounts and
reduced the already low level of UK saving, the research reveals.
Due for publication in this month’s Journal
of Financial Regulation and Compliance, the study examines data taken from the
Moneyfacts’ datascreen system. It found that 1,018 new deposit accounts were
introduced in the UK
between 1993 and 2004, and 769 accounts were withdrawn. This high level of deposit
account turnover led to a 70 percent rise in available deposit accounts, from
308 accounts in 1993 to 528 accounts in 2004.
“While customers relish more choice,
picking between such a vast number of similar products is hard for many
customers,” said Dr John Ashton of Norwich
Business School
and the ESRC Centre for Competition Policy, both based at UEA. “Introducing and
withdrawing savings accounts with such regularity makes the UK savings market difficult to
comprehend and use,” Ashton explains.
The study reported that converted building
societies introduced an average of 24 new deposit accounts over the study
period, with some firms launching in excess of 40 new deposit accounts. On the
other hand, most high street banks and mutual building societies launched only
a modest eight to 12 new accounts between 1993 and 2004.
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