By Oliver Smith on Friday 24 January 2020
The upstart bank won over 21,576 new primary accounts last quarter.
More than 21,000 Brits switched to Monzo as their primary bank account last winter, putting the bank neck and neck with Nationwide’s 25,000 switchers as the top-performing bank over the period.
It marks the first time a digital bank has made it into the top two spot and, of the only five banks to gain customers before Christmas, three were digital challengers.
Starling Bank and Triodos Bank came in at fourth and fifth place, netting 7,075 and 409 account switches respectively.
The figures from the Current Account Switch Service (CASS) published today included a note that usage of CASS among switchers is higher among the over 45s and that 77% of those who use the service say they prefer their new current account.
In total 260,000 switches were completed in the period between October and December 2019—higher than the typical 250,000—however competition between providers led to the majority of banks seeing a net decline in their overall account base for the quarter.
We’re finally reaching a critical mass of switchers heading to digital banks, something which just 12 months ago didn’t seem to be happening.
In the coming quarters I expect net account gains by Monzo and Starling will continue to rival, if not exceed, those of their high street counterparts.
The tentative first steps in above-the-line marketing during 2019 have certainly paid off.
This should (eventually) shut down the debate over whether consumers would start using digital banks as their primary accounts—a small but fast-growing minority certainly are.
Next, as we’ve written before, the question will turn to whether digital banks can cross-sell products, subscriptions and services in order to turn a profit from this customer base. And this is where questions still remain.
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