Current account switching: TSB the biggest loser; challengers beat big incumbents

The UK's TSB shed over 16,000 customers in the past quarter as it continued to grapple with the fall out from its botched IT upgrade.

The latest current account switching data from Bacs shows that TSB was the biggest loser between April and June, as customers voted with their feet following months of ongoing IT problems at the bank.

The Royal Bank of Scotland (RBS) was the next biggest loser in the quarter, with 12,362 customers switching to accounts elsewhere, while Nationwide Building Society took a net 34,577 accounts from its competitors.

The data was also positive for challenger banks, with Monzo and Starling outperforming their biggest rivals including Lloyds, NatWest and Barclays with a net gain of 2702 and 1737 new customers respectively.

Related Companies

Royal Bank of Scotland TSB Monzo Starling Bank

Channels

Retail banking

Comments: (6)

A Finextra member 24 October, 2018, 11:05

1 like

The big headline here should be Nationwide taking on 34K accounts -they are an "old incumbent" who are clearly doing something right. The swing to the challengers is pretty low. Shows that customers still prefer to trust their money with established / stable businesses rather than non profit making startups....for now anyway. As they get more accounts and maybe start to make money they will become more appealing. Seems most people like to leave money in traditional bank and transfer monies over to their super slick money alternative.

Report abuse

A Finextra member 24 October, 2018, 11:21

Be the first to give this comment the thumbs up

0 likes

The net worth of the accounts switched to challenger banks would also be a useful measure. The challenge lying ahead for the challengers is attracting the higher net worth customers. Right now they have an abundance of current accounts that have a salary paid in, no borrowing, balance taken down to almost zero (hence little savings) and then round the cycle again the next month. It is difficult to make money from those customers.

Report abuse

A Finextra member 24 October, 2018, 11:23

0 likes

TSB had the switching bonus of, if I remember rightly, of £125 and still lost out?! That's pretty impressive.

Report abuse

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 24 October, 2018, 19:18

0 likes

Industry-wide, total switches seem to be less than 50K. That's extremely underwhelming (<0.2%) considering there must be at least 30M current accounts in UK.

Report abuse

Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 24 October, 2018, 19:21

0 likes

Also Andrew Saines + 1. VC-funded fintechs can erode trust very rapidly - an ability that stodgy, old banks totally lack. PayTM Shows How Fintechs Can Lose Trust