1st August 2014
Britons are shunning the ‘Big Four’ banks and switching to smaller banks, according to new figures from The Payments Council.
The council, which operates and oversees the seven-day switching guarantee that was introduced at the end of last year, has released figures on which banks consumers are ditching and where they are going.
The ‘Big Four’ – HSBC, Barclays, Lloyds and RBS that control 77% of all current accounts –seem to be losing their stranglehold on the market.
All of the banks made a net loss of customers in the first three months of the switching scheme: HSBC lost 10,914 accounts, RBS lost 7,814, Barclays lost 13,379 and Lloyds saw a huge 20,065 customers walk away.
The Co-operative Bank, which reached the brink of collapse and was plagued by a number of scandals last year, lost 15,231 current accounts.
Conversely, Halifax was the biggest winner after attracting 46,332 new accounts and once beleaguered Santander attracted 30,001 customers. Nationwide was the third most popular switching destination, attracting 12,679 customers.
Gocompare.com banking expert Matt Sanders said the figures showed customers were making use of incentives being offered by banks but it also represented a wider shift away from the nation’s biggest high-street banks.
‘These figures make interesting reading and it’s clear that customers have been enticed by incentives and cash-back deals. The figures show that the biggest winners are Santander with its 123 account, which offers varying amount of cash-back, and Halifax with its £100 payment from those who switched to its Reward account, as well as the £5 per month in credit incentive,’ he said.
‘These new switching figures hint at a big bank backlash with the main four high street banks having seen thousands of customers defect. The reputation of banking in general has been tarnished by several mis-selling scandals and troubles at the beleagured Co-op bank seem to have triggered a significant customer revolt. The old guard banks really need to work on their reputation as well as their products if they want to regain customer trust.’
Customers will have a greater number of accounts to choose from in future as challenger banks enter the fray. Virgin Money has recently launched its Essential current account in Scotland and Northern Ireland and TSB is operating across the country as is Tesco Bank and the Post Office, all of which are looking to gain a foothold in the current account market.