ABSTRACT
Within the traditional structure and operation of the financial services industry, consumers had little choice in terms of selecting financial instruments and delivery channels. The rigid structure of the industry, combined with the operation of cartels, meant that consumers had to accept the form and price of both financial instruments and delivery channels. Switching between financial providers generated little, if any, long-term benefit and forced the consumer to incur disruption and financial cost. Consumers were, therefore, locked into buying patterns and had little incentive to change. However, deregulation and the emergence of technology has created highly competitive market conditions which have had a critical impact on consumer behaviour. Consumers are now more disposed to change their buying behaviour when purchasing financial products and as a consequence bank providers are less certain that their customers will continue to bank with them or that they will be able to rely upon the traditional banker-customer relationship to cross-sell high value, so-called ancillary products.
