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Upsurge in customers switching accounts for better online services

The Current Account Switching Service (Cass) is seeing an upsurge in account migrations based on service quality, rather than cash incentives, with challenger banks profiting from the trend.

Close to a quarter of a million switches (248,902) took place between October and December 2021. This is 36,302 more than in Q3 2021, and 59,629 more than in Q4 2020.

Nationwide (33,828) had the largest net switching gain in Q3 2021. This was followed by digital-first providers, Starling Bank (15,371) and Monzo Bank (6,498). Santander (4,372) and Virgin Money (3,377) take fourth and fifth place for net switching gains.

While consumer switching trends are typically influenced by the cash incentives offered by individual participants, the latest data for Q4 2021 also shows that service related, non-financial reasons, were the most significant contributors to people favouring their new current account once a switch had been completed.

David Piper, head of service lines at Pay.UK, owner and operator of the Current Account Switch Service, says: “We saw digital-first participants continuing to attract new customers as many seek current account providers with high-quality online tools, such as mobile apps."

The top reasons cited by switchers included: better online banking facilities (51 per cent), sophisticated mobile or app-based banking systems (41 per cent) and improved customer service (38 per cent). Location of branches (24 per cent) and preferable account fees or charges (23 per cent) followed closely.

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Mobile & online banking

Editorial | what does this mean?

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Comments: (2)

Lucian Morris - MAB - Derby 27 January, 2022, 09:45

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In terms of total switching these figures are just getting back to where they were pre-covid. In Q4 2019 switching was at 262,106. Nationwide, Monzo and Starling were 3 of the top 4 net gainers.

The real story here is about a service that is recovering to pre-covid levels, not about a dramtic uptick in switching numbers. I do get a bit annoyed that the story doesn't acknowledge this and, instead, paints a picture of an 'upsurge' without the background.

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A Finextra member 27 January, 2022, 16:35

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Very interesting findings that demonstrate the continued value of simplicity and support when it comes to brand loyalty.

SRM’s own research emphasises the importance of customer experience, with "ease of use" and "great service" the two primary factors for current account customers when selecting – as well as staying with – a brand.

Service is, of course, about more than just effortless digital functionality, not least as it really comes into its own when customers need or want human support.