- Growing number of UK adults are switching current accounts; nearly one in ten (7%) changing banks in the last 12 months
- A quarter of people (25%) have either considered switching or will be considering in the next year
- Half of people (50%) have never switched current account; those who could benefit the most from switching continue to miss out
12 May 2020: New analysis from Cardlytics (NASDAQ: CDLX), a purchase intelligence platform that drives loyalty and engagement through merchant-funded rewards, has found that more than three million UK adults changed their current bank accounts in the past year as the switching trend continues to grow.
Driven by increased competition in the UK banking sector, which has brought with it a boom in rewards and offers available to customers, nearly one in ten (7%) switched current account providers last year.
The growing popularity of switching shows no signs of slowing. While this year’s figures represented a modest increase on last year (+2%), the study found that a further 5.9 million UK adults will consider switching current accounts in the next 12 months. Out of those who have already switched, 52% said they would switch more frequently in future.
Digital challengers gain as customers switch gears
Traditional banks made up well over half (69%) of the accounts UK adults switched from, while newer digital challenger banks such as Monzo, Starling Bank and Revolut made up 25% of current accounts switched to.
Out of those who switched, nearly a third (31%) continued to keep their old account, pointing to the growing trend of individuals having multiple accounts for different purposes.
Money for something
With new players on the scene, competition for customers among banks is fierce; and they won’t be able to rely on blind loyalty. Less than a third of people (31%) considering switching, or those who had planned to do so but hadn’t done yet, said they would feel loyal to their bank if they knew they could get a better deal elsewhere.
Cash incentives (27%) was the top reason given by people who had switched and set up a new bank account. This was followed by a better interest rate (21%). Many switchers cited how they were treated as customers as a key driver. Furthermore, 19% said their main reason was that the new bank would better recognise and reward their customers, while 14% said better engagement through rewards, offers and services.
Commenting on the findings, Campbell Shaw, Head of Bank Partnerships at Cardlytics, said, “Switching is clearly here to stay. The money supermarket effect has meant it’s never been easier to shop around for a current account and people are voting with their feet. While that’s great for consumers after a deal, it puts banks in a tricky position. Many are committing big budgets and efforts to draw in new customers who may soon move on again when a better deal emerges.
“The coming year will be a real test for banks. As customers focus even more on value, how banks can offer them that while recognising their loyalty will be crucial.”
Top reasons why people switched:
- Cash incentives (27%)
- Better interest rate (21%)
- Being recognised and rewarded (19%)
- Superior mobile banking app (17%)
- Poor service from previous bank (17%)
- Personal recommendation (17%)
- Better engagement through rewards, offers and services (14%)
- Better rewards or cashback scheme (12%)
- Most of their products already with the new bank (11%)
- Previous bank didn’t offer the services I needed (11%)
Where the buck stops
Despite nearly half (48%) of UK adults admitting they know they aren’t getting the best deal with their current provider, half of the UK population have never switched their current account, leaving many cut out of the best rates, fees and rewards open to them.
Decision paralysis (44%), lack of time (32%), not finding a reward or incentive worth switching for (27%) and concerns over the hassle of switching (23%) are the most popular reasons for this.
In spite of efforts by the Current Account Switch Service to increase the number and frequency of current account switching, particularly among the hardest to reach and most vulnerable groups, the research found those who could benefit most from switching are the most likely not to.
One in three (30%) working class, unemployed, or on limited income adults have never switched their current account. That’s compared to four in five (79%) upper- and middle-class professionals who have, a third (33%) of whom did in the last 12 months alone.
– ENDS –
Notes to editors
Research conducted by YouGov between 24.02.20 and 05.03.20.
Nationally representative sample of 1422 UK adults with a current account, who have either switched current account in the last 12 months, considered switching current account in the last 12 months but didn’t, or are considering switching current account in the next 12 months.
Cardlytics (NASDAQ: CDLX) uses purchase-based intelligence to make marketing more relevant and measurable. We partner with major financial institutions – including Lloyds and Santander – to run their banking rewards programs that promote customer loyalty and deepen banking relationships. In turn, we have a secure view into where and when consumers are spending their money. We use these insights to help marketers identify, reach, and influence likely buyers at scale, as well as measure the true sales impact of marketing campaigns. Headquartered in Atlanta, Cardlytics has offices in London, New York, San Francisco, and Visakhapatnam. Learn more at www.cardlytics.com.
 Figure based on 7% of latest figure from Statista on the number of adults in the UK with a current account: https://www.statista.com/statistics/936174/number-of-adults-with-a-retail-or-savings-bank-account-united-kingdom/
 12% of people said they would consider switching in the next 12 months; figure based on the previously mentioned Statista figure for the number of adults with a current account
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