Santander well ahead in UK account switching race

Santander, Halifax and Nationwide are winning the most new customers, according to TNS

Santander is emerging as the main beneficiary of the battle to attract UK current account holders while NatWest and HSBC are losing ground, according to the monthly TNS Current Account Switching Index data for April.

The TNS Current Account Switching Index was launched in September, and compares the percentage of customers switching towards and away from each of the major UK current account brands. It found that Santander was the largest winner, gaining 23% of those switching their accounts. Other strong performers were Halifax (17%) and Nationwide (10%).

The biggest net reason consumers gave for joining Santander was rewards, cited by one in three customers. Although credit interest rates were cited as a reason by more people (one in two customers), they were also cited by one in three of the customers leaving the bank. One in three of those joining Nationwide cited reputation as the main reason. Santander attracted more switchers than it has lost in each month since September, losing 8% in April for a net gain of 15%.

The biggest losses belonged to HSBC and NatWest, which both recorded a 10% net loss of switchers in April. Both banks attracted just 2% of switchers but lost 12%. HSBC has recorded net losses every month since the switching service began, and NatWest in every month bar one. Lloyds and TSB are grouped together in the statistics, and experienced an even sharper fall at 22% – but recouped 16% of switchers in the other direction. The mean reason given by customers leaving their bank was customer service, which accounted for one in three of those leaving HSBC and 23% overall.

“These figures indicate that consumers who are switching continue to look beyond the ‘traditional High Street banks’, focusing instead on the individual bank offering,” said Maureen Duffy, chief executive of TNS UK. “Barclays’ current account strategy is at least sustaining their position whereas HSBC and NatWest may need to find new approaches to prevent further erosion of market share.”

The April survey also found that awareness of the current account Switch guarantee has stabilised at 60%, being highest among men (64%), the over-45s (69%) and the demographic ‘ABC1’, which refers to people in the middle class (66%). Regionally it is highest in the South West (69%) and lowest in London (48%). Some 1.3 million people switched their current account last year; in the April report, the overall switching level remains at 4%. The study was based on a representative sample of 12,147 current account holders interviewed between 28 March and 18 April of whom 419 were switchers. For the six months from 1 October to 1 April, there were 609,300 switches using the UK Payments Council’s official switching service in total.

The UK Payments Council introduced a seven-day switching service on 16 September, which obliges banks to switch a customer’s account to a rival within a maximum of seven days, should the customer wish it. The bank is responsible for transferring all direct debits and standing orders without the customer having to do anything. Any mistakes must be refunded in full immediately. The customer doesn’t even need to tell their bank about the switch – it is enough to simply provide the new bank with the necessary details. The rest of the process will be handled by the ‘destination’ bank.