Current account switches rise as bank incentive offers return after lockdown slump

Kalila Sangster
·2-min read
Man Holding Credit Card And Using Cell Phone holding credit card with shopping online
The most common reason for choosing a new account was improved online banking facilities. Photo: Getty

UK current account switches steadily rose in the third quarter as bank incentive offers returned after the nationwide coronavirus lockdown, new figures from the Current Account Switch Service show.

Some 136,575 switches took place between July and September — 38,383 more than in the second quarter.

The Current Account Switch Service saw a drop in consumer activity between April and June as the UK went into lockdown but experienced a resurgence in the third quarter as some banks offered cash incentives for switching again.

The most common reason for choosing a new account was improved online banking facilities, which was cited by 47% of Current Account Switch Service users as their main reason for switching. Some 39% reported preferable mobile banking systems as a reason for picking a new account, and 37% of Brits switched for better customer service.

Of those who completed a switch 72% said they prefer their new current account.

READ MORE: Black Friday: '85% of Brits plan to spend online' and shun high street

Starling Bank had the greatest number of people switching to its current account in the second quarter of 2020, followed by Monzo, Nationwide, NatWest, and Triodos Bank. Participant data is collected three months in arrears, so the bank with the highest net switching gain for Q3 is not yet known.

Maha El Dimachki, chief payments officer of Pay.UK, owner and operator of the Current Account Switch Service, said: “The market changes we’ve seen this year are like nothing anyone anticipated a few short months ago and we’re now looking at a very different financial ecosystem.

“After a dip in switching figures earlier in the year it’s encouraging to see month-on-month rises in switching numbers through the most recent quarter. Our focus is to ensure the Current Account Switch Service is available to those who wish to manage their finances more flexibly by switching their current account in a stress-free manner.”

In October, the Current Account Switch Service launched a new advertising campaign targeting financially vulnerable people with the aim of helping consumers and businesses take charge of their money and work towards reducing financial stress, as the service said it recognises “that many consumers and businesses could be at more risk of financial vulnerability due to the spread of COVID-19.”

WATCH: What are negative interest rates?