Monzo and Starling captured soaring numbers of account switchers last quarter

High street banks are starting to lose more switchers to digital players.

Monzo added 7,292 new current accounts in the first quarter of 2019 as consumers switched away from other banks, according to figures from the Current Account Switch Service (CASS) published today.

The figure is a 22% jump up from the 5,953 who switched to Monzo in Q4 2018, or 5,363 in Q3 2018 and 2,702 in Q2 2018.

Starling Bank saw similar gains, with a net 5,233 customers switching from rival banks in Q1 2019, up from 3,726 in Q4 2018.

Both challenger banks still find themselves in fourth and fifth position in the CASS rankings, this quarter behind Nationwide (38,788 new customers), HSBC (26,043) and NatWest (15,461).

The overall number of people switching bank account remained around 250,000 for the quarter.

Analysis

While the total number of account switchers in the figures above remains disappointingly low, as I’ve written about before, the news for Monzo and Starling is far more positive.

On the back of glitzy marketing campaigns both are starting to see, maybe not quite “insane” growth, but certainly leaps and bounds in the number of Primary account holders (that is, where customers have their salaries deposited).

The next hurdle is to break into the top three rankings. A place where Nationwide offers 5% fixed interest for a year on up to £2,500, where HSBC’s First Direct offers a free £50 cash and 0% overdraft, and where NatWest offers 2% cashback on bills.

Clearly, our challengers have a way to go, but their first tentative steps in above-the-line marketing are starting to move the needle.

Read more: The Current Account Switch Service has reached an ‘awareness milestone’, but its priorities are all wrong