What is driving this quarter’s current account switchers?

HSBC was the biggest net gainer of current account switchers in Q3 of this year, according to the latest Current Account Switching Services (CASS) dashboard, while Barclays was the biggest net loser. What is driving the trends?

Switching bonuses

It’s hard to deny the impact of the switching bonuses offered by the two main gainers, HSBC and Lloyds Bank (+18,047 and +11,173). Since May, HSBC has been offering £170 to switchers, while Lloyds in the same month launched an offer for £125 (before recently increasing its offer to £150).

Those banks which have made a net loss of customers are those which didn’t offer such simple, no-questions-asked bonuses during the period: Barclays lost a net 14,421 customers. Santander lost 20,220, despite launching a switching bonus in August, but this failed as of yet to generate a large boost in customers.

Marketing and brand

The switching bonus is clearly not the whole story, as Starling, offering no bonus, managed to come third on the list with a net +9,880 switchers. The quarter encompassed Starling’s successful partnership with the Women’s Euro at the beginning of July, which gave significant exposure to the brand especially as the England team went on to win.

Starling and fellow neobank Monzo, which also reported a net gain in customers of 4,559, have made features their selling point.

Starling’s Marketing and Brand Director Rachel Kerrone told FSF earlier this year that the company has deliberately eschewed such incentives in favour of putting product at the centre of its marketing pitch.

While the mainstream banks have copied many of the features of the digital upstarts, Rachel maintains that Starling’s ability to move quickly still differentiates it. The other key element to Starling’s success, she says, is having a strong brand built around a strong purpose.

https://thefsforum.co.uk/knowledge-hub/strategies/interview-starling-brand-director-on-meta-ad-boycott-and-how-to-overcome-retail-banking-inertia/

Service related switching

According to the CASS, the most popular reasons given by switchers for preferring a new account were related to service. Online banking (48%), customer service (41%) and mobile banking or banking app ease (38%) were listed as the top three reasons for people preferring their new current account.

25% said they preferred their new current account due to a better interest rate.