Savers are turning to challenger banks to store their cash reserves as high street providers fall out of favour with customers, a consumer champion finds.
Digital-only banks and smaller challengers are proving to be winners for customers looking to save their cash, according to Which?’s survey of 4,178 UK savers and 4,550 current account holders.
Paragon Bank and Marcus by Goldman Sachs topped the charts when it came to communication and the ease of the application process, while app-based provider Zopa bagged four stars out of five for its transparency with account holders.
For instant-access rates, Coventry Building Society and Paragon Bank were rated highest for the most competitive offers over a 12-week period, followed by Marcus and Zopa.
The positive trend for challenger accounts continued in the current account market too, with Starling Bank standing out as one of the top providers for mobile banking experience.
Each of the firms gained the title of Which? Recommended Provider (WRP) status in the annual study, which considers customers’ overall satisfaction, and their likelihood to recommend that brand.
However, at the other end of the scale, Bank of Ireland and Virgin Money were the lowest ranked current account options, with overall scores of 63% and 68% respectively based on customer satisfaction.
‘Clear gaps between best and worst providers’
For banking with a current account on the high street, Nationwide was the cream of the crop, as its service across its 605 branches scored the highest mark of four-stars among banks with a UK branch network.
As part of the wide-ranging report, the consumer champion also found that only one in six (17%) savers are currently looking to switch accounts in the next year, meaning savers could miss out on better rates and a bigger savings pot.
Ele Clark, senior money editor at Which?, said: “Our research has found leading challenger banks are ahead of the traditional high street names in terms of both customer satisfaction and competitive savings rates.
“Lots of us stick with the same bank for years, but with clear gaps between the best and worst providers, customers unhappy with their service or rate should consider switching.
“If you’re thinking of moving banks, don’t let enticing offers of free cash be your sole motivation. While we could all do with a cash injection right now, poor customer service might prove more frustrating than the introductory offer is worth.”
