Bank switching: Nationwide, HSBC the big winners as customers ditch TSB

Latest figures reveal the most popular banks – plus those that are losing customers by the bucketload.

People switched bank accounts almost a million times in the last year, new figures have revealed.

This doesn’t take into account switches where the customer’s old bank account was left open – as loveMONEY readers know, keeping a second account is a savvy move – so the real switching total could be far higher.

The Current Account Switch Service, a bank initiative making it easier to move, now claims to complete over 99.4% of switches in seven working days, although some customers are still being left out.

Not all banks are equal

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

This data is provided by Bacs, the payment firm. As it takes a while to pull together, the latest stats available are for the final three months of 2018.

The winners

Nationwide was once again a strong performer, adding another 48,736 customers over the quarter, which is up from 40,656 new customers in the previous quarter.

Once you factor in customers that left during the same time the building society is the outright winner, with over 36,000 new accountholders overall.

No doubt one of the reasons behind its popularity is Nationwide’s Flex Direct current account, which has one of the highest interest rates in the market at 5% and an interest-free overdraft.

HSBC remained popular with switchers, with 60,970 new customers joining in the three month period. However, the fact that a lot of people left during the same time, means it is just second on the list of net gains (31,389).

We should stress that the Bacs numbers simply lump HSBC’s subsidiaries together – notably first direct and M&S Bank – so it’s impossible to say for certain which specific brand proved the most popular.

That said, the fact HSBC was offering a massive £200 bung to join during that quarter, coupled by the ongoing popularity of customer service king first direct, means these two are likely to have enjoyed decent gains.

Special mention for the newbies

The new app-based challenger banks, Monzo and Starling, continue to attract customers at a rapid rate with their offer of both convenience and fee-free holiday spending.

They grew by almost 6,600 and 4,200 respectively, but what really stands out good they are at retaining people.

Monzo, for example, gained 11 new customers for every one that left.

Compare that to HSBC, which effectively lost one for every two that joined over the same period.

This is the second quarter since Triodos Bank, an ethical bank, took on enough customers to be named in its own right (as opposed to being counted within ‘Low Volume Participants’).

Triodos is the only UK ethical bank to offer a current account in addition to savings and investments, and grew by a moderate amount.

See the table below for the full list of winners.

Brand

Gains

Losses

Net gains

Nationwide

48,736

12,409

36,327

HSBC (inc. first direct and M&S Bank)

60,970

29,581

31,389

NatWest

29,807

23,340

6,467

Monzo Bank

6,549

596

5,953

Starling Bank

4,195

469

3,726

Triodos Bank

248

32

216

Tesco Bank

1,333

1,232

101

Thinking about changing current account? Compare your options

The losers

TSB has suffered yet another terrible quarter, losing nearly 17,500 customers.

The suffered well-documented IT problems last and this may have encouraged yet more customers to jump ship.

TSB is not the only big name struggling as a significant number of large high street banks are clustered towards the bottom of the table.

Barclays, Clydesdale, Halifax, Lloyds, Barclays, RBS and NatWest have lost thousands of customers, on balance.

Brand

Gains

Losses

Net losses

TSB

2,122

19,614

17,492

Halifax

17,175

34,542

17,367

Royal Bank of Scotland

3,828

15,209

11,381

Lloyds Bank

11,476

21,935

10,459

Co-operative

454

8,415

7,961

Barclays

13,946

20,344

6,398

Clydesdale Bank

1,462

7,358

5,896

Santander

17,899

21,868

3,969

Bank of Scotland

3,557

4,884

1,327

AIB Group (UK)

64

870

806

Ulster Bank

302

985

683

Bank of Ireland

172

756

584

Danske

363

756

393

Read more: the best bank accounts for switching bonuses

What matters to us?

 

Switching incentives are often seen as a key part of the switching merry-go-round. Indeed, we've seen in the past NatWest go from near the top to bottom of the tables after withdrawing a juicy offer (though it’s worth noting it’s once again in a respectable third place).

It has recently reintroduced a top new offer, so it will be interesting to see what impact that has in a few months.

Regardless, what unites the banks consistently appearing at the top of switching tables are excellent account features and customer service.

A Government-backed survey of bank customer service last year named first direct, Nationwide and Santander in the top five for customer service.

It's worth noting here that while we never believe anyone should stick with a poor-value account or suffer rubbish customer service, it's not always a terrible thing if you don't switch.

It might just be you're happy with your current bank and, while you're always looking around, nothing better has come along yet.

If you are fed up with your bank, compare current accounts on loveMONEY’s comparison site.

This article is updated when new figures are released

Read these next:

The best bank accounts for cashback 

How to claim compensation for mis-sold packaged bank accounts

Debit cards that are free to use while abroad: avoid foreign usage fees and charges on your holidays

 

 

 

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