Troubled NatWest wins switching war as savers flocked to its cash bonus
In the first three months of the year, NatWest beat competitors with more than 71,000 customers joining the bank, tying in with the launch of its £200 cash bonus for switchers and 6% savings offer.
The bank notched up 71,590 new current account holders between January and March 2023, but once customer losses were factored in, it was left with a net gain of 45,651, still way ahead of the competition.
It ties in with the launch of its £200 cash bonus for new customers switching their everyday banking to it, together with the interest rate increase on its Digital Regular Saver from 5% to 6% gross (variable).
The positive news on customer numbers comes amid a banking storm which saw CEO Alison Rose resign yesterday after revealing she was the source of the inaccurate BBC report on why Nigel Farage’s bank account was closed. It raised major concerns over client confidentiality and sent waves across the wider industry when it comes to freedom of expression.
Meanwhile, Pay.UK which owns and operates the Current Account Switch Service (CASS) revealed that HSBC came in second place. While it gained the greatest number of customers overall at 74,416, once exiting customers had been included, it saw a net gain of 28,486.
In third place was Lloyds Bank with a net gain of 10,959. The bank saw 48,163 savers flock to it, but 37,204 ditched the provider.
By losses, HSBC recorded the highest number at 45,930, but based on net gains, Nationwide which led the customer switching numbers in the last quarter fell substantially.
Between October and December 2022, the mutual picked up a record 146,676 customers – the biggest number by far compared to any bank or building society. This time round, it was left with a net gain of -34,259. Just 9,899 joined in the quarter, while 44,158 ditched the building society.
Current account switching stats and insights
While the customer switch data is three months in arrears due to “commercial sensitivity”, Pay.UK releases total but anonymised figures on the number of recent switches.
Between 1 April and 30 June 2023, there were 338,194 switches via CASS, a 76% increase on the 191,777 recorded in the same period last year.
Seven in 10 switchers said they preferred their new current account to their previous one, with service-related, non-financial benefits continuing to be the main reasons end users preferred their new account.
Those who switched current account through CASS during Q2 2023 cited better online or mobile app banking (41%) and customer service (29%) as the top two reasons for preferring their new account. Financial factors also ranked highly, with interest earned (29%) and account fees or charges (25%) coming in as the third and fourth most important factors.
Over the year to 30 June 2023, Pay.UK said the upward switching trend is apparent as 1,277,484 switches were made – a 50% year-on-year increase from the 850,243 recorded between July 2021 and June 2022.
As CASS approaches its tenth anniversary in September, 9.5 million switches have been made, with 137.8 million payments successfully redirected.
John Dentry, product owner at Pay.UK, said: “The service continues to play a vital role in allowing people and businesses the flexibility to change accounts and find a banking partner that better suits their needs. This quarter’s switching figures demonstrate a healthy and competitive switching environment for consumers and businesses during a time of economic uncertainty with high inflationary pressures.
“People can rest assured that if they decide to move to a new banking provider through the Current Account Switch Service, the process will be quick, free and easy.”