Current account switches increase by 44769 in Q2

In this latest dashboard, we find out how many of us transferred our bank account in Q2 2021 as restrictions eased and who the switching winners and losers were in the first three months of the year during Lockdown 3.0.

The number of switches during 2021

As previously reported the steady state of Current Account Switches was disrupted by the emergence of the COVID pandemic in the first half of 2020. Although the number of switches began to rise during the Autumn, the December switching level had fallen to 41,357 (a mix of seasonal and lockdown factors are the probable cause).

Source: Pay.UK

While current account switches dipped again in January (31,854) and February (42,398) as Lockdown 3.0 took hold, there was a significant increase in March (63,724) as the roadmap for the COVID-19 recovery became clearer. This recovery has continued as restrictions have continued to ease and during Q2 2021 182745 current account switches have been completed which is 44769 more than in the previous quarter.

Source: Pay.UK

A total of 7.3 million current accounts have now been switched since the service was launched in September 2013.

“As the roadmap to the COVID-19 recovery was outlined and clarity around timings increased, we saw a rise in current account switches through the Current Account Switch Service through Q2. It’s too early to tell whether this trend will continue as we head further into 2021, but as a service we remain focused on ensuring those who wish to move their current account can do so in a reliable, simple and stress-free manner. I am continually proud of our team in their ability to maintain a high completion rate and strong satisfaction and awareness figures that sit above the target levels.”

David Piper, Head of Service Lines at Pay.UK, owner and operator of the Current Account Switch Service

Q2 2021: CASS performance

The CASS insights published by Pay.UK (the operator of the switching service) show us that during Q2 2021:

Source: Pay.UK
  • A total of 182745 switches took place between April and June 2021, 44769 more than in the previous quarter.
  • Q2 2021 figures reflected a drop of just 6528 compared to the final quarter of 2020 (189,273), where social distancing measures were relaxed for many and participants started re-introducing switching incentives to the market. While current account switches dipped in January (31,854) and February (42,398), there was a significant increase in March (63,724) as the roadmap for the COVID-19 recovery became clearer. This recovery has continued through Q2.
  • Since the service launched in 2013, the system has successfully redirected more than 110.1 million payments seamlessly and transparently from an ‘old’ (and closed) bank account to the ‘new’ bank account. One of the early fears for the CASS service was that payments directed to the ‘old’ bank account would result in ‘lost’ payments, the development of a ‘redirection table’ has proved to be an integral part of ensuring the success of the accounts switching service.
  • Consumer awareness of the Current Account Switch Service was at an average of 77% through Q2 – again edging ahead of 76% in Q1 2021.
Source: Pay.UK
  • 93% (maintaining the same level as Q1) of people who have used the service over the last three years are satisfied with the CASS service:
Source: Pay.UK
  • Despite the disruption caused by COVID, 99.8% (no change) of switches have been completed within the seven working day switch timescale.
  • December 2020 had recorded the highest proportion of small business and charity switchers accounting for 12% of switchers (personal 88%) This increased further in January 2021 with the proportion being 14.9% and 85.1% respectively. Levels for small businesses and charities have now fallen back to historic levels with the proportion at 7.9% in June 2021.
  • In Q2 2021 88% of CASS switchers would recommend the switching process.
  • Of those who have switched account, 70% say their new current account is better than their old one and only 2% say it is worse.
  • The top three reasons people rate their new account as better than their old account continue to be service related:
    • Online banking (47%) (Q1 2021 51%)
    • Mobile banking (39%) (Q1 2021 37%)
    • Customer service (39%) (Q1 2021 44%)
  • The proportion of current account holders actively considering switching stands at 14% and a further 14% are thinking about it.
  • Over three quarters (81%) think that it would be easy to switch – thus the all time high level in the Confidence Index has been maintained for a second quarter.

Q1 2021: Participant performance

Pay.UK publish participant CASS data a quarter in arrears so the latest data provides an insight to switches completed in Q1 2021:

Source: Pay.UK
  • Of the 49 brand participants 7 brands recorded a net gain of accounts (note: a number of brands are included in a catch all ‘low value participant’ category which recorded 418 gains and 946 losses so it is possible that an individual brand or two made a small net gain).

Q1 CASS winners and losers by brand

Pay.UK publish the winners and losers information in alphabetical order but sorting based on net gains/losses provides an interesting picture of winners and losers on an individual brand level:

  1. Starling Bank: +17769
  2. Virgin Money: +17495
  3. Monzo Bank Limited: +7744
  4. Nationwide: +1474
  5. Bank of Scotland: +1448
  6. Triodos Bank: +1133
  7. Lloyds Bank: +1002
  8. Danske : -63
  9. Ulster Bank: -147
  10. AIB Group (UK) p.l.c.: -211
  11. Bank of Ireland: -328
  12. Co-operative : -664
  13. Tesco Bank: -1060
  14. Halifax: -1637
  15. HSBC: -2851
  16. Barclays: -3533
  17. RBS: -7621
  18. TSB: -8502
  19. NatWest: -10605
  20. Santander: -10965

Q1 CASS winners and losers by banking group

Pay.UK publish the winners and losers information in alphabetical order by brand but sorting based on net gains / losses by banking group usually provides a different picture. However for Q1 the top three by group are unchanged – i.e.

  1. Starling Bank: +17769
  2. Virgin Money: +17495
  3. Monzo Bank Limited: +7744

At the other end of the table the picture is slightly changed by group:

19. Santander: -10965
20. NatWest: -18226

Conclusion

As previously reported the steady state of Current Account Switches was disrupted by the emergence of the COVID pandemic in the first half of 2020. Although the number of switches began to rise during the Autumn, the December switching levels fell to 41,357 (a mix of seasonal and lockdown factors are the probable cause of this dip). While current account switches dipped in January (31,854) and February (42,398), there was a significant increase in March (63,724) as the roadmap for the COVID-19 recovery became clearer. This has continued in Q2 with the number of Current Account Switches increasing by 44769 in Q2.

However, whilst this was true of personal current accounts in Q4, December 2020 had recorded the highest proportion of small business and charity switchers accounting for 12% of switchers (personal 88%). This increased further in January 2021 with the proportion being 14.9% and 85.1% respectively. Since that time the percentage for small business and charity switchers has fallen back to more historic levels and had reduced to 7.9% in June 2021.

The top three reasons to switch (online banking, mobile banking and customer service) continue to point to current account providers having a strong digital offering as is evidenced in the league table above.

The key service factors of the CASS service of the 7 day switch guarantee, consumer awareness, consumer confidence and account redirection have all performed highly during Q4. This is evidenced by the 93% of people who have used the service over the last three years being satisfied with the CASS service.

With 14% of current account holders actively considering switching and a further 14% thinking about switching, the service performance and consumer satisfaction point to the likelihood that the CASS service will continue to play its part in stimulating a competitive current account market in the UK – which, after all, was the key driver for the development of the CASS service.