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Digital banks among the winners as more Brits switch current accounts

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30/01/2019
Current account customers are increasingly ditching mainstream brands and switching to app-only banks, such as Monzo and Starling, figures show.

The two challenger banks were among the winners in the race to secure new customers between 1 July and 30 September 2018, with net gains of 5,363 and 2,116 customers respectively.

But the biggest gains were made by HSBC and Nationwide, according to statistics from the Current Account Switch Service (CASS).

HSBC made a net gain of 16,430, while Nationwide reported a net gain of 31,773.

During this period TSB was one of the worst performers, recording a net loss of 16,142 after it suffered a high-profile IT crisis, which left customers locked out of their accounts.

However, these figures only show the customers who moved using the seven-day switching service.

The service, which was launched in 2013, cut the time a switch from 18-30 days to seven working days. It also means all payments, such as direct debits and salaries, are automatically moved from an old account to a new account.

TSB said more than 22,000 customers opened accounts in the third quarter of last year.

A TSB spokesperson said: “Customers do not solely need to use the automated switching service, as they can open a new bank account with us via our branch network or online.”

Natwest, RBS, Lloyds Bank, Halifax and Barclays were among the other high street names to lose customers during the period.

Anelda Knoesen, senior manager of money at comparethemarket.com said: “The challenger brands – such as Monzo and Starling – are attracting yet more customers with their simple mobile apps and customer-first approach. I’d expect this trend to continue as more challengers, such as N26, enter the UK market.

“Nationwide has attracted the most switches in the quarter, possibly due to the attractive rate of 5% AER fixed for a year on up to £2,500  on some of the accounts they offer.”

The figures published today also show the number of customers switching banks jumped at the end of last year.

In total, 235,648 account switches were made using CASS between 1 October and 31 December, up 22% compared to the previous three-month period.

More than 5.3 million switches have taken place since the service launched five-and-half years ago.

Total switches made between 1 July and 30 September 2018

Source: CASS

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