Best and worst banks: Halifax, Starling and Monzo the big winners as customers ditch HSBC

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

Halifax and challenger bank Starling are the big winners from the latest switching figures, while HSBC and Santander have lost the most customers.

According to the Current Account Switch Service, there was a sharp rise in the total number of people switching banks in the latest quarterly stats, which run from July to September 2020.

The organisation processed a total of 136,000 switches, up from 98,000 during the previous quarter.

Take a look at what the Starling current accounts offer

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 99.8% of switches in seven working days, but 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 third quarter of 2020 (1 July-30 September), when the total number of switches was notably higher.

We should stress a lot of switching bonuses were re-introduced over the summer (many have since ended), meaning many customers may have switched for extra cash.

Best UK banks

Halifax was the bank with the highest net switching gains, followed by challenger banks Starling Bank and Monzo are in second and third place, respectively.

The number of new Halifax customers (33,327) far outweighed those who left the bank (10,585) over the quarter.

Halifax may have gained thousands of customers because it was the first bank to reintroduce a switching bonus (£100) after these were all pulled when the COVID-19 pandemic first struck.

Speaking of which, the pandemic has also meant many high street banks have limited their opening hours, so some people may have struggled to visit their local branch and decided to opt for a digital bank, shedding some light on why Starling and Monzo performed well.

Between July and September, Starling added another 14,148 customers and lost 1,496 customers, leaving it with new gains of 12,652 (you can check out our review of Starling here).

The fact it gained almost 10 accounts for each one it lost is particularly impressive, putting it well ahead of its rivals on that metric (want to see what Starling has to offer? View its current accounts here).

Monzo was also popular with switchers over the same period, attracting 12,451 new customers and losing 3,294, leaving it with net gains of 9,157.

The only other banks to enjoy a net gain of customers were Lloyds, Bank of Scotland and Triodos.

See the table below for the full list of winners.

Brand

Gains

Losses

Net gains

Halifax

33,327

10,585

22,742

Starling Bank

14,148

1,496

12,652

Monzo

12,451

3,294

9,157

Lloyds

18,081

9,746

8,335

Bank of Scotland

2,513

1,846

667

Triodos Bank

736

70

666

The best bank accounts for switching bonuses

Worst-performing banks

HSBC had the highest net losses between July and September as 20,861 customers ditched the bank with only 5,998 joining.

This left HSBC with 14,863 fewer customers overall, which is somewhat surprising considering the bank launched a £125 switching incentive at the start of September.

Santander also lost more customers than it gained as 21,047 closed their account compared to only 11,018 who signed up, leaving it with net losses of 10,029.

Customers may have been fed up with Santander after it cut the interest rate on its popular 123 Current Account in August.

Unfortunately, Santander recently announced yet another rate cut, which will come into force from April, so it will be interesting to see what impact that has on its customer base.

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

HSBC

5,998

20,861

14,863

Santander

11,018

21,047

10,029

NatWest

5,904

15,621

9,717

TSB

3,512

8,517

5,005

Royal Bank of Scotland

3,476

7,171

3,695

Barclays

5,572

9,067

3,495

Tesco Bank

55

2,004

1,949

Co-operative Bank

1,803

3,433

1,630

Low Volume Participants

421

1,949

1,528

Nationwide

9,670

10,598

928

Clydesdale Bank

3,296

3,622

326

Bank of Ireland

57

331

274

AIB Group

44

304

260

Danske Bank

151

302

151

Ulster Bank

337

398

61

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.

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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