Current account switching figures ‘underwhelming’
Just three million people switched bank accounts in the last three years out of an estimated 65 million current account holders in the UK, figures reveal.
Data from Bacs on behalf of the Current Account Switch Service (CASS) shows there were 257,999 switches during the second quarter of 2016, down on the 309,678 in the previous three months.
The figures also show that in the 12 months to 30 June, there were 1.05 million switches – down on the 1.10 million recorded a year earlier.
In total, since the launch of the seven working day switch guarantee in September 2013, there have been just over three million switches, with more than 99% completed within the time frame.
However, with an estimated 65 million current accounts in the UK, the three million switches in the last three years represent just a tiny fraction – less than 5%.
With the Competition and Markets Authority’s recent investigation into the industry finding customers switching could stand to gain around £70, millions are losing out.
The statistics show that 12,076 decided to keep their old account open when they switched, falling outside of the CASS guarantee.
The biggest winners and losers
Bacs also published statistics showing which banks and building societies had the largest number of customer wins and losses in the last quarter of 2015.
Halifax had the largest net gain at 31,181, followed by Nationwide which had a net gain of 26,150.
The biggest losers were Barclays with 27,064 deciding to switch away, followed by Natwest which gained 14,931 but recorded a loss of 28,859, leaving it with a net loss of 13,928.
The increase in the Santander 123 current account monthly fee from £2 to £5 appears to have had a dramatic impact on the number of new accounts opened.
Although Santander gained 41,772 customers in Q4 2015, when the fee hike was announced, 38,180 walked away, leaving it with a net gain of just 3,592.
‘Latest figures are underwhelming’
Kevin Mountford, head of banking at MoneySuperMarket, said: “The latest current account switching figures feel slightly underwhelming, with just a four per cent increase in switches during the first half of 2016 compared to the same period last year. Only a handful of providers – Halifax, Nationwide – are making net gains from switching and it shows more needs to be done to engage customers into switching, and on a more regular basis.
“Providers clearly need to consider adding more products to the market and making it more competitive. At the same time, consumers should continue to put pressure on banks and shop around to see if they can improve on their current deal.
“Given the uncertainty following the Brexit vote many households will be reviewing their finances and as part of this may want to consider changing their current account. There’s plenty to be gained from doing so, with good interest rates, cashback incentives and other perks available.”