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Where can the best banking deal be found?

Some of the biggest high street banks have recently made a U-turn in their policy to open more branches. However consumer feeling is still not swayed; according to recent research by moneyfacts.co.uk 58% of consumers think branch based banking will disappear in the future.

However banks are still a long way from providing the service that consumers demand, as people regularly voice their disappointment at the level of service their receive.

While there is most certainly a 'rate tart' society, this is not the only key motivator for consumers switching providers; service plays a vital part. Moneyfacts.co.uk research has shown a massive 50% of consumers have switched savings providers purely as a result of disappointing service.

While service is vital to any provider/customer relationship, how do products compare depending on the channel you use?

Lisa Taylor from moneyfacts.co.uk commented: "For basic financial products such as savings accounts and personal loans, purchasing on the internet can offer excellent returns. However the internet market has failed to capture a large audience willing to select more complicated products such as mortgages."

"Whilst many mortgage providers offer the ability to apply via the internet, only three providers have exclusive products that are only available online. So there seems to be a lack of incentive for DIY mortgage applications."

"There should be significant cost savings for the institution, but up until now these do not seem to be passed to the consumer. But are the tables beginning to turn?"

"Direct Line has announced that on 16 June it will launch its first online only mortgage, offering a 'best buy' discounted rate of 4.19% for 2 years."

Research carried out by Direct Line clearly illustrates the need to reward consumers for completing the application process themselves online, with 46% of respondents likely to apply online if they could achieve a lower rate, compared with only 26% if the same mortgage was available through all channels.

Lisa Taylor said, "To gain the confidence of consumers to purchase these more complicated products online, institutions need to ensure they have easily accessible help options, with someone to speak with if needed."

"However, providers may not be keen to attract all their business through the internet, as although it does provide cost saving opportunities, they also potentially miss out on the cross selling opportunities that branch staff are trained to follow rigorously."

The tables below illustrate the potentially rate savings to be made by purchasing on the internet:

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