NatWest, Co-op and Barclays had the biggest losses of current account customers from high street banks, according to the latest statistics.
Despite attracting new banking customers between April and June last year, NatWest still lost almost 14,000 accounts overall, according to data from the Current Account Switch Service, while Co-op lost nearly 13,000 and Barclays just over 10,000.
The most popular banks to switch to during the period, with the biggest outright gains, meanwhile, were Nationwide, HSBC and TSB. They attracted 46,503, 34,750 and 30,317 new current account customers respectively.
Walking on by: NatWest had the biggest net losses of current account customers from high street banks in the second quarter of 2017
However, once the number of account closures are factored in, Nationwide, TSB and Tesco ended up in the best overall positions, with a net gain of 38,626, 20,120 and 1,244 new customers respectively.
Despite more than 110,000 accounts being switched using the service in November – the highest figure since March 2016 – the data revealed that the number of people switching banks fell again year-on-year.
Just 931,956 people switched current account via the guaranteed seven-working-day service in 2017 – the equivalent of around 2 per cent of UK consumers. That represented a reduction of almost 8 per cent compared to 1,010,423 a year earlier.
TSB has released its own research coinciding with the switching data that suggests despite this inertia, people feel the ‘big five’ banks – Barclays, HSBC, Lloyds, NatWest/RBS and Santander – do the bare minimum to keep their customers happy and the average person could be £70 better off by switching.
TSB itself was spun out of Lloyds Banking Group in 2013 and listed on the stock exchange before being bought by Spanish bank Sabadell.
Switched: These are the number of current account customers who changed provider in 2017
TSB found that four in five people who bank with the big five believe their bank does ‘as little as possible’ for them; 86 per cent said the big banks only get in touch when they have something to sell; and more than three quarters feel the big five profit at their expense.
While NatWest and Co-op would not be drawn on the exodus of customers in Q2 2017, the period did cover changes being made to the NatWest Reward account, when the rate of cashback was cut from 3 per cent to 2 per cent. At the same time, Co-op was undergoing its recapitalisation and had been forced to put itself up for sale.
A Barclays spokesperson said: ‘The switching service works well for customers, however there is still significant account opening and closing outside of the service. In fact, we continue to open more current accounts each month than we close.’
But returning to the here and now, NatWest has recently stepped up efforts to woo new customers by breaking with its near decade-long stance of not offering sign up incentives.
A NatWest spokesman explained: ‘We have recently introduced a switcher offer, which is proving extremely popular. New and existing customers switching their main bank account to us can now receive £125 in addition to the average £83 cashback received on the Reward account.’
Cash sweeteners are a popular tactic used by banks to swell customer numbers.
Currently, the best such deal up for grabs is from HSBC, perhaps contributing to its bumper customers gains last year. It gives out £150 to switch to its Advance Account and a further £50 after a year.
However, the accounts with the largest net gains overall, according to the CASS figures, don’t come with sign up bonuses, instead offering interest-starved savers interest on their balances.
Nationwide, the biggest winner in the battle for new customers, offers a market-beating 5 per cent interest on balances on it flagship FlexDirect account and 0 per cent interest on overdrafts for a year.
TSB, which took second position, has offered a temporary cash sign up bonus in the past but it currently takes a slightly different approach to new-customer perks with monthly cashback of up to £10 and 3 per cent incredit interest on the first £1,500.
Tesco Bank offers the same 3 per cent rate on up to £3,000 guaranteed until April 2019, plus extra Clubcard reward point on your spending at the supermarket and elsewhere.
You can find out more about This is Money’s favourite current account picks in our guide here.
Alternatively we have listed the most eye-catching current account perks currently available in the table below.
||Santander will pay 1.5 per cent on balances up to £20,000 plus up to 3 per cent cashback on bills||£5 a month fee. You must pay in £500 a month and two active direct debits|
|Santander 123 Lite||Up to 3 per cent cashback on your household bills||£1 a month fee, £500 a month and two active direct debits|
|First Direct 1st Account||£125 for joining via MoneySupermarket and £250 interest-free overdraft||Pay in £1,000 a month or maintain a £1,000 balance|
|Nationwide FlexDirect||5 per cent interest on up to £2,500 and fee-free overdraft, both for the first year only||Pay in £1,000 a month|
||£75 for joining via switch service and a £3 monthly bonus||Pay in £750 a month, stay in credit and two active direct debits.|
|Tesco Bank Current Account||3 per cent on balances up to £3,000 (guaranteed until 2019) and extra Clubcard points for spending on debit card||£750 monthly deposit and 3 direct debits|
|TSB Classic Plus||3 per cent on up to £1,500 plus up to £10 cashback each month until December 2018||Pay in £500 a month. You must maintain two direct debits, register for internet banking, paperless statements and paperless correspondence.|
|M&S Bank Current Account
||£125 gift card for joining via switch service, plus collect an extra £5 a month for the first year in vouchers. Loyalty points for spending on debit card in store and £100 interest-free overdraft||No fee or rules|
|Metro Bank Current Account||Free debit card transactions in Europe and longer opening hours||No fee or rules, no available to open online.|
|Club Lloyds||Pays 2 per cent on up to £5,000, plus a choice of one lifestyle benefit such as six cinema tickets or magazine subscription||£3 monthly fee or deposit £1,500 a month|
|Classic Account with Vantage||2 per cent interest on up to £5,000||Remain in credit, two active direct debits, and pay in £1,000 a month. Branches in Scotland only, but Halifax branches support most day-to-day banking needs.|
|Co operative Bank with Everyday Rewards||Up to £5.50 in monthly rewards including 5p (up to £1.50) each time you use your debit card||Switch accounts using the Current Account Switch Service and maintain 4 direct debits, pay in £800 a month, stay in credit and receive paperless statements|
|Natwest Reward Account||£125 cashback until February 16, 2 per cent back on your household bills||Comes with £2 monthly fee and £1,500 minimum monthly deposit. switch using CASS|
|HSBC Advance Account||Free overdraft for the first 6 months, £150 to switch and an extra £50 if you stay for a year||£1,750 monthly minimum deposit. Switch using CASS with at least two direct debits|