By Aisling Finn on Thursday 29 October 2020
After good online banking, customers cite better mobile banking and customer service as important factors for switching.
The coronavirus pandemic is helping digital-only banks win new customers, according to Anne Boden, CEO and founder of Starling Bank, who says a good digital experience has been pushed up consumers’ banking demands.
Figures published today from the Current Account Switch Service (CASS) show that good online banking is the strongest reason for current account switching.
Boden, who is speaking at The AltFi Festival of Finance 2020, told AltFi: “In this time of remote working and partial lockdowns, customers want to be able to do their banking remotely and at times of day that best suits them.”
“With Starling, they get a bank that is on hand to serve and support them 24/7,” she added.
Nearly half (47 per cent) of customers that switched their account in the last three months cited improved online banking facilities as the reason for their switch —music to digital banks’ ears I’m sure.
The latest data was published in unison with the latest current account switching figures from CASS, which saw Starling Bank top the table of highest net switching gain.
Starling added 12,786 accounts between April and June 2020 and just 788 people closed their accounts, just over 16 accounts gained for every customer lost, during the same period.
After improved online banking, 39 per cent of people cited better mobile banking systems as the most important reason for switching and better customer service trailed slightly behind with 37 per cent of people saying it was their top reason for changing banks.
Jon Ostler, CEO at the personal finance comparison site, finder.com, said: "The lack of switching incentives from the big banks over lockdown is a likely explanation as to why digital-only banks take the top two positions for net gains, and you could argue this parity gives a more natural indication of consumer preference.”
Following a massive 65 per cent drop in current account switching, the amount of people changing banks has rallied again with 38,383 more switches happening last quarter, 136,575 in Q3 in total.
Despite the jump, current account switching still remains 40 per cent lower than the same period last year, when roughly 228,00 switches were made.