Best and worst banks: Starling and Monzo the big winners as customers ditch Santander

Latest switching figures reveal the banks most people are switching to – and those that are losing customers by the bucketload.

Bank customers have been ditching high street banks in favour of challengers like Starling and Monzo, latest bank switching stats have revealed.

However, the total number of people switching remains well down on pre-pandemic levels, likely because of financial uncertainty and the fact most banks have pulled their top perks for new customers anyway.

Take a look at what the Starling current accounts offer

How many people are switching?

According to the latest stats from the Current Account Switch Service, an initiative designed to make it easier to change banks, there were more than 136,000 switches between July and September.

This is well up on the 98,000 switches during the worst COVID lockdown months, April to June, but less than half the 280,000 recorded in the first three months of the year.

Note that this data doesn’t take into account switches where the customer’s old bank account was left open – as loveMONEY readers know, keeping a second account can be a savvy move – so the real switching total may be higher.

The Current Account Switch Service now claims to complete 99.4% of switches in seven working days, although for those unlucky few who hit problems it really can be a nightmare.

Who are we switching to?

The really interesting stats can be found when you look at which specific banks and building societies we all recently ditched and joined.

This data is provided by Pay UK, the retail payments authority.

As it takes a while to pull these together, the latest stats available are for the second quarter of 2020 (between 1 April and 30 June), which as we’ve mentioned is when the total number of switches was notably lower.

We should also point out that this was the quarter when most switching bonuses had been pulled (many have since returned), meaning many switchers may well have been prioritising other perks.

Best UK banks

In a surprising turn of events, Starling Bank has dethroned HSBC with the highest net switching gains.

The number of new Starling customers (12,786) far outweighed those who left the bank (788) over the quarter.

The bank may have gained thousands of new customers as it’s purely digital, which could be particularly appealing as the coronavirus pandemic prompted a nationwide lockdown.

That means people may have struggled to visit their bank in-branch and decided to opt for a digital bank, which would also shed light on why Monzo also performed strongly.

You can check out our review of Starling here.

Between April and June, Monzo added another 12,788 customers and lost 1,395 customers, leaving it with new gains of 11,393.

Nationwide was also popular with switchers between April and June, attracting 16,353 new customer and losing 6,270, leaving it with net gains of 10,083.

The building society has traditionally performed well, most likely thanks to its stellar customer service.

The only other banks to enjoy any net gains were NatWest, Triodos and Bank of Scotland, although this was significantly lower than the previous quarter due to lower demand.

See the table below for the full list of winners.

Brand

Gains

Losses

Net gains

Starling Bank

12,786

788

11,998

Monzo Bank

12,788

1,395

11,393

Nationwide

16,353

6,270

10,083

NatWest

12,350

8,216

4,134

Triodos Bank

441

31

410

Bank of Scotland

1,601

1,373

228

The best bank accounts for switching bonuses

Worst-performing banks

Santander had the highest net losses between April and June as 17,494 customers ditched the bank with only 4,962 switching.

This left Santander with 12,532 fewer customers overall, which may have been due to the bank announcing a further cut in the interest rate on its popular 123 Current Account in May.

It was certainly the reason why one loveMONEY writer decided to ditch the bank earlier this year.

Halifax also lost more customers than it gained as 13,402 left compared to only 3,383 who signed up, leaving it with net losses of 10,019.

Customers may have been fed up with online and mobile banking issues, which happened in June (these issues also occurred earlier this year).

These banks aren’t the only big names struggling as a significant number of well-known banks are clustered towards the bottom of the table.

You can check out the full list below.

Brand

Gains

Losses

Net losses

Santander

4,962

17,494

12,532

Halifax

3,383

13,402

10,019

Barclays

3,044

6,369

3,325

TSB

2,656

5,702

3,046

HSBC

12,171

14,363

2,192

Royal Bank of Scotland

2,925

4,724

1,799

Lloyds Bank

5,230

6,928

1,698

Low Volume Participants

330

1,275

945

Tesco Bank

116

840

724

Co-operative Bank

1,778

2,075

297

Clydesdale Bank

2,094

2,320

226

AIB Group (UK)

16

212

196

Bank of Ireland

36

214

178

Danske Bank

86

166

80

Ulster Bank

198

229

31

The best bank accounts for switching bonuses

What matters to us?

Switching incentives can play a key role in the switching merry-go-round.

For example, we've seen banks go from near the top to the bottom of the tables after withdrawing a juicy offer.

Of course, this quarter is somewhat unique in that there weren’t many of these around, so it will be interesting to see whether things have change in the next quarter now that bungs have returned.

Regardless, the common themes among the banks that consistently appear at the top of these switching tables every year are excellent account features and customer service.

*This article contains affiliate links, which means we may receive a commission on any sales of products or services we write about. This article was written completely independently.

 

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