Current account switches increase in Q4 2020 as incentives return.

In this latest dashboard we find out how many of us transferred our bank account in Q4 2020 and who the switching winners and losers were during the ongoing COVID pandemic in Q3 2020.

The number of switches during 2020

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 fell to 41,357 (a mix of seasonal and lockdown factors are the probable cause).

Source: Pay.UK

A total of 7 million current accounts have now been switched since the service was launched in September 2013.

While it’s positive to have passed the 7 million accounts switched milestone in 2020, we are fully aware that many consumers and businesses may be at more risk of financial vulnerability due to the economic impact of COVID-19. Our recent advertising campaign and accompanying research was focussed on this audience and understanding how, as a service, we can continue to help those who need it most.

David Piper, Head of Service Lines of Pay.UK

During 2020, 704,560 current account switches have been completed – a significant (COVID) reduction on the historic number of annual switches.

Q4 2020: CASS performance

The CASS insights published by Pay.UK (the operator of the switching service) show us that during Q4 2020:

Source: Pay.UK
  • The number of switches increased each month during the quarter with the switches completed in Q4 amounting to 189,273. Although the number of switches appear to be recovering form the first COVID lockdown the switches during Q4 remain well below pre-COVID switch levels. The Q4 increase is being attributed to incentives to switch offered by a number of participants.
  • More than 104 million payments have been seamlessly and transparently redirected 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 witching service.
  • 75% in Q4 (down from 81%) of people are aware of the CASS service:
Source: Pay.UK
  • 91% (up 1% from Q3) 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% (up 0.4%) of switches have been completed within the seven working day switch timescale.
  • December 2020 recorded the highest proportion of small business and charity switchers accounting for 12% of switchers (personal 88%).
  • 84% of CASS switchers would recommend the switching process.
  • Of those who have switched account, 71% 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 (40%)
    • Mobile banking (40%)
    • Customer service (36%).
  • The proportion of current account holders actively considering switching stands at 13% and a further 15% are thinking about it.
  • Over three quarters (78%) think that it would be easy to switch.

Q3 2020: Participant performance

Pay.UK publish participant CASS data a quarter in arrears so the latest data provides an insight to switches completed in Q3 2020:

Source: Pay.UK
  • Of the 49 brand participants once again only 6 brands recorded a net gain of accounts (note: a number of brands are included in a catch all ‘low value participant’ category which recorded 421 gains and 1,949 losses so it is possible that an individual brand or two made a small net gain).

Q3 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. Halifax: +22,742
  2. Starling Bank: +12,652
  3. Monzo: +9,157
  4. Lloyds: +8,335
  5. Bank of Scotland: +667
  6. Tridos Bank +666
  7. Ulster Bank: -61
  8. Danske Bank: -151
  9. Allied Irish Bank: -260
  10. Bank of Ireland: -274
  11. Clydesdale Bank: -326
  12. Nationwide Building Society: -928
  13. COOP Bank : -1,630
  14. Tesco Bank: -1,949
  15. Barclays Bank: -3,495
  16. Royal Bank of Scotland: -3,696
  17. TSB: -5,005
  18. Nat West: -9,717
  19. Santander: -10,029
  20. HSBC: -14,863

Q3 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 provides an interesting picture.

By banking group the top 5 switch winners podium points to a very successful quarter for Lloyds Banking Group:

  1. Lloyds Banking Group: +31,744
  2. Starling Bank: +12,652
  3. Monzo: +9,157

At the other end of the table Nat West groups aggregated figures place the banking group in second to last place with a net loss of -13,475 accounts (1,388 switches above HSBC).

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).

However, whilst this was true of personal current accounts in Q4, December 2020 recorded the highest proportion of small business and charity switchers accounting for 12% of switchers (personal 88%).

Whilst it is likely that Halifax’s number one spot can be attributed to switch incentive offers the top three reasons to switch (online banking, mobile banking and customer service) point to current account providers having a strong digital offering.

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 91% of people who have used the service over the last three years being satisfied with the CASS service.

With 13% of current account holders actively considering switching and a further 15% thinking about switching the service performance and consumer satisfaction point to 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.