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Starling and Monzo lead the neobanks as current account switching booms

In the last quarter of 2022, the Current Account Switch Service saw its highest number of switches.

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As central bank interest rates have started to trend up, reaching a 3.5 per cent peak in December in the UK,  strong incentives are proliferating among banks looking to cash in. 

The result is a record amount of switching in the UK current account market. 

Santander and HSBC were the most switched to banks in the third quarter of 2022, according to the latest figures from the Current Account Switch Service.

Starling and Monzo, two digital challenger banks, had the highest net switching gains after these two high street incumbent banks during the July and September 2022 period.

Santander had the highest net switching gains (29,105), followed by HSBC (13,119), and Starling Bank (9,070). Monzo Bank (6,038) and Nationwide (3,248) were in fourth and fifth place, respectively.

In addition in the fourth quarter, between October and December 2022, 376,107 overall switches took place; the highest quarterly figure on record iun the 10 years since it launched. 

The number represents a 73 per cent uplift on the same period in 2021.

November 2022 came top with the highest total number of monthly switches ever (157,376), with small business and charity accounts also reaching a new high (2,131).

“It is encouraging to see the highest level of switches ever this quarter, demonstrating the continued relevance of the service to consumers and businesses across the UK. It’s also positive to see an uptake in small business and charity account switches, showing that the value of the Current Account Switch Service extends beyond personal accounts.

“Those considering a new current account, for whatever reason, can be assured that the Current Account Switch Service has facilitated nearly 9 million switches through a quick, free and easy process,” said David Piper, Head of Payments Operations at Pay.UK, the owner and operator of the Current Account Switch Service.

Despite one in four saying high interest rates was a reason for them preferring their new account, a more commonly cited reason was online banking (46 per cent), customer service (42 per cent) and mobile banking/banking ‘app ease’ (40 per cent).

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