Halifax, Starling and Virgin winning current account switching war
According to the Current Account Switch Service (CASS), 212,600 switches took place in the quarter, 29,855 more than in Q2, and representing a year-on-year increase of 56% from the third quarter of 2020.
Halifax reported net gains of 16,684 accounts, Starling 13,720 and Virgin Money 6,915. Monzo Bank and Lloyds Bank were in fourth and fifth places with 5,707 and 3,875 net gains respectively.
While switching incentives drove switching activity in part, the latest data for Q3 2021 shows that service related, non-financial reasons, were the most cited reasons for favouring a new current account. A total of 722,594 switches were processed by CASS in the past 12 months.
The top reasons cited by consumers for preferring their new current accounts included: online banking facilities (52%), stronger customer service (42%) and ease of mobile or app-based banking systems (39%). Favourable interest rates (23%) overtook location of branches (22%) as the fourth most cited reason in comparison with Q2 2021.
Nearly three-quarters (73%) of those who completed a switch in Q3 using the CASS said they prefer their new current account, an increase of 3% on Q2 2021. Only 2% stated that their new account is worse.
David Piper, head of service lines at Pay.UK, owner and operator of the Current Account Switch Service, said: “The number of Current Account Switch Service users rose in Q3 as consumers continued to explore digital options and switching offers.
“The return of competitive incentives being offered by participating banks and building societies is a strong sign of confidence returning to the market. This growth is encouraging and as we look to the end of the year our focus remains on ensuring our service is widely available to those looking to switch accounts in a simple, reliable, and stress-free manner.”