Friday, May 6, 2022

Which banks gained and lost the most checking account customers this year?

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Figures released by the Current Account Switch Service show that 196,964 switches took place between January and March 2022 — an annual increase of 41 percent

Cass, which makes it easier for customers to switch their bank or building society accounts, saw an increase in current account switching between January and March 2022.

UK customers have switched eight million current accounts since the launch of the Current Account Switch Service (Cass) in 2013.

There were 196,964 switches in those three months, compared to 138,964 in the same three months last year, bringing the total number of switches to eight million.

Between October and December 2021, Santander recorded the highest net switching gains at 36,494, followed by Nationwide at 33,691 and Starling Bank, which attracted 10,364 customers from other banks.

Monzo with 3,068 and ethical bank Triodos with 642 took fourth and fifth place respectively.

Over the same period, Barclays lost 11,669 customers, Halifax lost 342, while HSBC – which includes First Direct – lost 14,875, although part of that was due to the closure of its Marks and Spencer-branded checking account. Lloyds Bank lost 2,677 customers and TSB lost 13,911 current account customers.

Cass said service-related, non-financial, benefits were the main reasons for the switch and customers would prefer their new current account to their old one — as they did last year.

Other reasons given for switching were online banking at 53 percent, mobile banking/banking app usability at 42 percent, customer service at 40 percent and branch location at 22 percent as the top reasons for preferring their new checking account.

One in six checking account holders was actively considering switching, with those who experienced a major life event in the past year twice as likely to consider switching, 22 percent compared to 9 percent.

David Piper, Head of Service Lines at Pay.UK, owner and operator of the current account switching service, said: “We saw positive engagement with the current account switching service earlier this year and increased satisfaction with the number of switches made compared to this quarter in 2021, when for many the disruption of a pandemic was more prominent.

“Obviously, with the rising cost of living continuing to put pressure on many households, it’s more important than ever for people to assess whether their existing checking account best suits their needs. It may be that an alternative provider could offer something better, and we encourage those considering switching to remember that the current account switching service is free, easy and guaranteed.”

Adrian Kidd, a licensed wealth manager at EQ Financial Planning, said the numbers are encouraging but it’s likely many customers could still benefit from switching banks.

He said: “People are probably still put off by the myth that it’s difficult and time-consuming and you miss debits and get rejected debits which costs money, but that’s fake news. The current account switching service is guaranteed to take all your worries away. This could save you annual fees and there are some good cash incentives too, as well as better interest rates and cashback on bills. I used it myself and it worked like a charm.”

Marcus Wright, managing director of Bolton Business Finance, said the service has been a huge success since its launch.

“I worked at a large bank before this service was introduced and moving your bank account was almost as stressful as moving house. Yes, really. I still think the overdraft handling could be improved, but overall I think it’s working well.”

What is the current account switching service?:

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