Halifax’ £100 pandemic switch bonus sees customers flock to the bank
In the third quarter of 2020 (July – September), Halifax reported the largest net gain of current account customers (22,742) after 33,327 joined while 10,585 left the bank.
The big influx of customers ties in with the launch of Halifax’ £100 switch bonus in August. Halifax led the way as it was the first to launch switch incentives since the onset of the pandemic lockdown.
In second place came digital challenger Starling Bank which saw a net gain of 12,652 customers. In total in the quarter, 14,148 customers came on board, while 1,496 left.
Monzo came third with 12,451 customers joining the digital challenger as 3,294 switched away, leaving it with a net gain of 9,157 customers.
At the other end of the scale, HSBC reported the largest net losses of -14,863, followed by Santander’s -10,029 and NatWest’s -9,717.
This is the third consecutive quarterly loss for Santander, which reflects its recent announcements on cuts to the interest rate and cashback category changes to its flagship 123 current account.
The figures from Pay.UK which owns and runs the Current Account Switch Service (CASS), revealed that over seven million switches have taken place since the scheme launched in 2013.
In the final quarter of 2020, a total of 189,273 switches took place, an increase of 52,698 compared to Q3. Monthly data showed that November saw the highest number of switches take place (80,980) since March (113,037) as “confidence slowly began to return to the market” and participant incentives, such as one-off cash bonuses for switching accounts, increased.
Pay.UK added that the most commonly cited reasons for switching account were all service-related, and included better online banking facilities (40%), preferable mobile banking systems (40%) and strong customer service (36%).
Of those who completed a switch using the Current Account Switch Service, 71% said they prefer their new current account and only 2% believed it to be worse.
‘Incentives returned to the forefront’
David Piper, head of service lines at Pay.UK, said: “Like many organisations, the events of 2020 presented new challenges and as a service we’ve had to adapt to a rapidly changing financial ecosystem. While we saw a drop in switching figures in the second quarter of the year, the market picked up following that and switching figures steadily increased up to November as incentives returned to the forefront.
“It remains to be seen if this trend will continue in 2021, but our focus remains to ensure that the Current Account Switch Service is available to those who wish to move their current account in a quick, easy and guaranteed manner.”
Andrew Hagger of independent data site, Moneycomms, said: “It was a disappointing quarter for Nationwide Building Society losing a net 928 customers in the quarter, the first time it recorded a net negative outflow since the switching figures were published in 2014.
“The online only ‘neo banks’ Monzo and Starling continue to make steady progress at the expense of more established high street rivals, putting on a net 9,157 and 12,652 new customers, respectively.
“It’s also interesting to note that ethical banking provider Triodos made a net gain of 666 customers – although the numbers are still relatively small, its ethical stance and transparent charging tariff with monthly fee certainly seems to be hitting the right note.”