Inertia And Other Psychological Barriers In Bank-Switching Behaviors

In general, people don’t like to switch banking relationships.

This is because our irrational brains interpret switching banks as risky behavior. In their paper, “Status Quo Bias in Decision Making," academics William Samuelson and Richard Zeckhauser note that people disproportionately prefer the status quo even when it makes rational and economic sense to change. This is due to a number of psychological biases including loss aversion, where we weigh losses heavier than gains, sunk costs, regret avoidance or a reluctance to "cut our losses."