Current account switching on the rise; golden hello incentives pay off
The £250 Clydesdale Bank golden hello offer for current account switchers ran from October 2017 until the end of the year. Figures released by the Current Account Switching Service (CASS) for the fourth quarter of 2017 reveal that the offer helped Clydesdale to gain a net 22,000 switchers in Q417, writes Douglas Blakey
The £250 current account switching offer from Clydesdale Bank was the most generous switching offer available in 2017. And it paid off handsomely.
Who says switching offers do not pay off? Come 2018 and with no such offer in place, Clydesdale lost almost a net 12,000 switchers in Q118.
Other account switching incentives helped HSBC and Halifax to post net gains.
In the fourth quarter of 2017 HSBC offered switchers £150 plus a further £50 if customers remain with the bank for a year.
Halifax’s offer comprised a £125 bonus, plus a £3 reward each month customers made a credit of at least £750, make two direct debits and remain in credit.
Halifax and HSBC both enjoyed a net gain of switchers in the fourth quarter last year and in the first quarter of 2018.
In the six months period to end March, Barclays was the biggest loser, down a net 33,000 customers. Other losers included Cooperative Bank and Royal Bank of Scotland, down by 22,000 and 20,000 respectively over the same period.
Santander has suffered a net loss of account switchers since it raised the price of its 123 product. For the six months period to end March, Santander was down a net 18,000.
Over 4.9 million successful switches have taken place since seven day switching launched in 2013.
Between 1 July 2017 and 30 June 2018, 965,317 switches were completed – up 6% on the previous 12 months.
Almost half-a-million (499,801) switches were completed in the first half of 2018, up 7% compared to the same period in 2017.
More than 98.7% of switches were completed in the seven working day timescale in the past quarter.
The latest data highlights that the mechanics of the switching service is working well.
There is however no room for complacency and there will be disappointment on the part of regulators and government that switching rates overall remain low.
Total switches in calendar year 2017 amounted to 931,956, down 8% from 1,010,423 in 2016.
Present switching rates are no better than they were in 2012 before the service launched, when 1.12 million switches took place.
With around 47 million adults holding a current account, a 1 in 47 switch rate or little more than a 2% annual rate is not the rate envisaged when the switching service was established.
UK current account switching Q4 2017
UK current account switching Q1 2018
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