Current account switching: TSB the biggest loser; challengers beat big incumbents

Current account switching: TSB the biggest loser; challengers beat big incumbents

The UK's TSB shed over 16,000 customers in the past quarter as it continued to grapple with the fall out from its botched IT upgrade.

The latest current account switching data from Bacs shows that TSB was the biggest loser between April and June, as customers voted with their feet following months of ongoing IT problems at the bank.

The Royal Bank of Scotland (RBS) was the next biggest loser in the quarter, with 12,362 customers switching to accounts elsewhere, while Nationwide Building Society took a net 34,577 accounts from its competitors.

The data was also positive for challenger banks, with Monzo and Starling outperforming their biggest rivals including Lloyds, NatWest and Barclays with a net gain of 2702 and 1737 new customers respectively.

Comments: (6)

Andrew Saines
Andrew Saines - Giesecke+Devrient Mobile Security GB Ltd - London 24 October, 2018, 11:051 like 1 like

The big headline here should be Nationwide taking on 34K accounts -they are an "old incumbent" who are clearly doing something right. The swing to the challengers is pretty low. Shows that customers still prefer to trust their money with established / stable businesses rather than non profit making startups....for now anyway. As they get more accounts and maybe start to make money they will become more appealing. Seems most people like to leave money in traditional bank and transfer monies over to their super slick money alternative.

Phil Tottie
Phil Tottie - Church Wood Solutions Ltd - Ripon 24 October, 2018, 11:211 like 1 like

The net worth of the accounts switched to challenger banks would also be a useful measure. The challenge lying ahead for the challengers is attracting the higher net worth customers. Right now they have an abundance of current accounts that have a salary paid in, no borrowing, balance taken down to almost zero (hence little savings) and then round the cycle again the next month. It is difficult to make money from those customers. 

Dirk Kinvig
Dirk Kinvig - Finextra - London 24 October, 2018, 11:231 like 1 like

TSB had the switching bonus of, if I remember rightly, of £125 and still lost out?! That's pretty impressive.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 24 October, 2018, 19:181 like 1 like

Industry-wide, total switches seem to be less than 50K. That's extremely underwhelming (<0.2%) considering there must be at least 30M current accounts in UK.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 24 October, 2018, 19:211 like 1 like

Also Andrew Saines + 1. VC-funded fintechs can erode trust very rapidly - an ability that stodgy, old banks totally lack. PayTM Shows How Fintechs Can Lose Trust

A Finextra member
A Finextra member 25 October, 2018, 09:491 like 1 like

Don't forget that many of those moving to Challenger Banks will want to try their service first and so won't use CASS although they may do so later.

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