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HSBC wins account switch war as Santander rate cut hits numbers

Paloma Kubiak
Written By:
Paloma Kubiak

HSBC gained the greatest number of current account customers in the three months to March 2020, while users turned their backs on Santander, switching figures reveal.

In the first three months of the year, HSBC reported the largest net gain of current account customers (33,994), after 74,563 came on board while 40,569 bolted from the lender.

This ties in with the fact that HSBC launched its £175 current account switch offer in January, the best hard cash deal in the market at the time.

Nationwide also reported a stellar period with 22,993 net new accounts after it gained 43,883, but lost 20,890 customer accounts.

And in third place came app-only challenger bank Monzo with a net gain of 19,049. In the three months to March, it gained 22,096 customers, while 3,047 left the group.

At the other end of the scale, Santander saw the largest net loss of customers (-29,192). It gained just over 12,000 customers in the quarter, but of all the participant banks, saw the largest loss at 41,222.

In Q1 2020, Santander announced it would cut the interest rate on its flagship 123 account from 1.5% to 1% AER on balances up to £20,000. With the maximum interest customers could earn falling from £298 to £199 (before its £5 monthly fee), customers were spurred to switch to a more rewarding current account.

Halifax recorded a net loss of 23,189 customers, followed by RBS with 14,094.

The figures from Pay.UK which owns and runs the Current Account Switch Service (CASS), reveal that more than 6.7 million switches have taken place since the scheme launched in 2013.

Between July 2019 and 30 June 2020, there were 868,572 switches and in Q2 2020, there were 98,192 switches, a lower number than typically recorded. Pay.UK said this was a result of the impact of the Covid-19 pandemic and social distancing measures.

To date, 49 brands now participate in CASS.