Kiwis love complaining about banks but never switch. Here’s why most of us don’t bother
Sunday, 5 April 2026
Fewer than half of Kiwis are happy with their current bank, but only 3% of us actually do anything about it.
Consumer NZ data shows that 97% of us didn’t bother to switch from our primary bank in 2025, mirroring the numbers from 2024.
Scott Moore, the market research and insights manager at Consumer NZ, tells me that the intent rose, but is still limited, with 7% indicating they were very likely to switch banks leading into 2025.
“There’s a gap between stated intent and actual behaviour,” says Moore.
Kiwis stay put for three main reasons: they are happy with their current provider (47%), they see no obvious benefit in moving (39%), or they believe there is no real difference between banks (26%).
The latter two reasons are a stinging indictment of the perceived level of competition between banks in this country.
Many Kiwis simply believe that switching banks is a waste of time, a redundant act that will leave them with a similar service under a different banner.
This inertia among customers, observes Moore, almost becomes a self-fulfilling prophecy because a lack of movement weakens competitive pressure.
If Kiwis are so reluctant to switch, banks know they don’t have to do much to keep them. At worst, they just have to match an offer that might pop up elsewhere.
Conversely, when customers are willing to move, competition thrives. In its 2024 market study, the Commerce Commission recommended that Payments NZ improve and boost customer awareness for its switching service (readytoswitch.nz).
“This isn't the first time that Payments NZ has been urged to improve the switching service,” says Moore, of the bank-owned governance organisation responsible for New Zealand’s bank payment systems.
“We think it's time for an independent switching service,” says Moore.
Mythbusted: it’s hard to switch
Consumer NZ’s research also shows a disconnect between the perceived difficulty of switching and how difficult it actually is.
Fewer than half of Kiwis believe switching would be straightforward before attempting it, whereas 87% found it easy after switching.
The fear of switching normally stems from the perceived effort of moving automatic payments, direct debits and employer payroll.
This hits smaller banks particularly hard, because they struggle to wrestle customers free of their much larger competitors.
Catherine Bateman, chief customer and marketing officer of The Co-operative Bank, says a recent uptick in the number of people considering to switch shows customers aren’t getting the service they expect – even if they don’t act on it.
What many don’t realise is that under the current New Zealand bank switching process, once you open a new account, your new bank is required to handle the transfer of all your recurring payments within five working days.
“There can be a wide variety of reasons why customers switch banks, and it is not only home loan customers that shop around,” says Bateman.
“People may look at interest rates for loans or savings, product offerings, or may be dissatisfied with the service they’re receiving from another bank…As cost pressures continue, helping people understand their everyday banking options, and how easy it is to switch if they want to, can be just as important as the rates banks offer.”
Is there any point to switching?
MoneyHub founder Chris Walsh says New Zealand banks do very little to buy new customers, giving Kiwis little incentive to move (regardless of how easy it might be).
“I noticed in the UK, there were lots of advertisements saying 'switch to us, and we'll give you 100 pounds or 250 pounds,' whereas in New Zealand, you don’t see that,” says Walsh.
“I think people stay with their bank account because they’re not gonna get much more from anyone else.”
Walsh says all the major banks offer near-identical terms on standard accounts. And right now, we also have many credit card rewards programmes being watered down as new rules come into effect. This means that when it comes to accounts or card choices, there isn’t much enticing Kiwis to shop around.
The one exception is mortgage cashback offers. At the end of last year and the beginning of this year, the major banks were offering lucrative deals for new customers to sign on, leading to a bit of competitive hustle.
However, customers have also cottoned on to the fact that you can often get the same deal with your current provider if you just ask them to match what’s being offered.
Given the relative sameness in the sea of New Zealand’s banking options, Walsh’s recommendation is for Kiwis to look at their personal spending rather than who houses their accounts.
“People will save a lot more money by purging $100 of subscriptions they don't need than getting some incremental difference from a bank account,' he says.
Will open banking or tech save the day?
Open banking and a range of fintech startups have been posited as potential solutions to the competitive doldrums, but this is still a work in progress.
Walsh says the “neobank revolution” (led by companies like Revolut, Nubank and Webank) hasn’t yet had the impact we’ve seen elsewhere.
He says it will take some time for the changes to materialise as this space continues to evolve in the coming years.
Jacob Muñoz, the co-founder of fintech startup Afterburner AI, notes open banking regulations are already in force for the big four banks, with Kiwibank required to have compliant systems read by mid-2026.
This, says Muñoz, will allow customers to share their data with third-party providers and get insight into whether they really have the best mix of financial products.
“That is genuinely transformative for advisers and their clients,” says Muñoz, because it means advisers will be able to find a better mix of products and services for their clients faster than ever before.
While these changes carry risks, they have the potential to break the banking inertia. If enough customers finally walk, banks will have little choice but to respond.
What are your thoughts on this? What do you think will help competition? And what would you like to see from New Zealand banks?