Challenger banks among ‘winners’ from current account switch service

The number of current account customers ditching their old bank and switching to a new one jumped towards the end of last year, figures show.

The latest findings also suggest that customers are continuing to use the seven-day current account switch service to move to newer, mobile banking challengers such as Monzo and Starling Bank while more established high street names see customers looking elsewhere.

In the final three months of 2018, 235,648 account moves were successfully completed using the seven-day switching service as customers were perhaps fed up with their existing provider or inspired to move to a new one.

This figure was up by 22% when compared with the previous quarter, when 193,621 switches took place.

The figures, from the current account switch service (Cass) show that, across 2018 as a whole, 929,070 switches were made – slightly down on the 931,956 made in the previous year.

Launched in 2013, the scheme has cut the length of time it takes to change banks and removes a lot of other hassle, by automatically moving payments over to the new account.

Payments body Bacs, which oversees the service, also released data provided voluntarily by banks and building societies showing how many switches were made between July 1 and September 30 2018.

It showed that TSB, which suffered high-profile problems last year that left people locked out of their accounts, made a net loss of 16,142 switches during the period.

NatWest, RBS, Halifax, Lloyds Bank and Barclays were also among those who recorded net switching losses between July and September.

Meanwhile, Nationwide Building Society, HSBC and Santander were among the “winners” in terms of customers using Cass to move accounts during the period.

And Monzo Bank, which describes itself as a bank “that lives on your smartphone” made a net gain of 5,363 switches.

Starling Bank, which describes its service as “banking built for mobile living” gained 2,116 switches overall.

Tesco Bank and Triodos Bank were also among the challengers making net switching gains.

Gareth Shaw, head of money at Which?, said: “Our research has shown that fresh thinking and innovation from some of the challenger banks has shaken up the market and put them ahead of some of the biggest banking brands for customer satisfaction.

“After a turbulent year of IT meltdowns that caused inconvenience to millions of people, anyone feeling frustrated with their bank should consider switching – as there has never been an easier time to move to a new provider.”

The switching data provided by banks and building societies only includes switches made by people, small businesses and small charities using the full benefits of Cass to move their account and does not include switches made outside the scheme.

A spokeswoman for TSB said that, in the third quarter of 2018, approximately 22,000 customers opened a new bank account with it or switched their account to it.

She said: “Customers do not solely need to use the switching service – they can open a new bank account with us via our branch network or online.”

Here are the net switching gains or losses made by banks and building societies from customers using Cass between July 1 and September 30 2018 (figures do not include switches made outside Cass):

– AIB Group UK (includes First Trust Bank and Allied Irish Bank GB switches) minus 671
– Bank of Ireland (includes the Post Office brand switches), minus 460
– Bank of Scotland, 558
– Barclays, minus 5,471
– Clydesdale Bank (includes Yorkshire Bank brand switches), minus 4,432
– Co-operative (includes Smile brand switches), minus 6,631
– Danske, minus 240
– Halifax, minus 5,088
– HSBC (includes First Direct and Marks & Spencer Bank brand switches), 16,430
– Lloyds Bank, minus 5,334
– Monzo Bank, 5,363
– Nationwide Building Society, 31,773
– NatWest, minus 12,514
– RBS (includes Adam & Company, Coutts and Isle of Man brand switches), minus 8,143
– Santander, 7,483
– Starling Bank, 2,116
– Tesco Bank, 586
– Triodos Bank, 284
– TSB, minus 16,142
– Ulster Bank, minus 655