Bank switching jumps 56% as digital banks and switching deals tempt Brits

Switching jumped back to its pre-Covid highs in the third quarter of 2021, with the number of switches rising to 212,600 during the three months to the end of September.

That figure is up some 56 per cent year-on-year, a sharp rise of 76,000 extra switches, which the Current Account Switch Service (CASS) says was prompted by an increasing number of banks offering incentives to switch plus the growing demand for digital banking options.

Over half of switchers (52 per cent) cited improved online banking facilities as the reason they preferred their new account, while mobile or app-based banking were cited by 39 per cent of those who had switched.

“The number of Current Account Switch Service users rose in Q3 as consumers continued to explore digital options and switching offers,” said David Piper, head of service lines at Pay.UK which owns and operates CASS.

“The return of competitive incentives being offered by participating banks and building societies is a strong sign of confidence returning to the market.”

Looking back at Q2 2021, CASS published a breakdown of where switchers went, with Starling maintaining its position in the top two for the fifth quarter running.

Halifax was the most switched-to bank account, with 16,684 net gains, with Starling closely following with 13,720 net account gains, then Virgin Money (6,915) and Monzo (5,707) in a distant fourth place.

While Halifax was first back to market with a £100 switching deal that started in March, other banks have now gotten involved.

Santander is currently paying £130 cash, Nationwide £125 and HSBC £110—figures which may indicate who is currently gaining the most new customers.

Starling, meanwhile, has never offered a cash incentive to switch, and Monzo withdrew its own cash incentive to switch years ago, both banks trade on the quality of their service and app to attract new customers.