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Are these switching offers actually getting banks more customers?

I was just wondering if, at the end of it all, the banks are actually going to see a net increase in customers as a result of these switching offers or if equal numbers of customers are going to switch from bank A to bank B and from bank B to bank A so that the banks just end up with the same number of customers (excluding genuine new non-switch customers)?
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Comments

  • eskbanker
    eskbanker Posts: 35,277 Forumite
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    Figures for gains and losses by bank are published quarterly, the most recent being last week's, at https://www.wearepay.uk/wp-content/uploads/2019/10/Current-Account-Switch-Service-Q3-2019-Dashboard-24th-Oct.pdf

    They're issued in arrears so these cover Q2 rather than Q3, but the relative success of the likes of HSBC, NatWest and Nationwide seems to suggest that switching incentives do have a positive effect, although a few thousand here and there isn't significant when the major players have current account populations in the millions....
  • d63
    d63 Posts: 328 Forumite
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    there was an article about this in thisismoney recently https://www.thisismoney.co.uk/money/saving/article-7605331/NatWest-sees-boost-current-account-switchers-successive-cash-bribes.html
    and a brief comment at the end that -- "Barclays has lost a net figure of nearly half a million current account switchers since CASS started recording the data."
    they don't say how many accounts they had to to start with though. does anyone know where to find this out?
  • eskbanker
    eskbanker Posts: 35,277 Forumite
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    d63 wrote: »
    there was an article about this in thisismoney recently https://www.thisismoney.co.uk/money/saving/article-7605331/NatWest-sees-boost-current-account-switchers-successive-cash-bribes.html
    and a brief comment at the end that -- "Barclays has lost a net figure of nearly half a million current account switchers since CASS started recording the data."
    they don't say how many accounts they had to to start with though. does anyone know where to find this out?
    According to https://www.bbc.co.uk/news/business-44522630 Barclays had an 18% market share of circa 70m current accounts, i.e. about 12m accounts, in 2016.

    https://assets.publishing.service.gov.uk/media/53c834c640f0b610aa000009/140717_-_PCA_Review_Full_Report.pdf suggests that their market share was largely unaltered at this sort of level between 2007 and 2013.

    So half a million sounds like a lot but is 'only' about 4% of their customer base....
  • keef-WhatStandards
    keef-WhatStandards Posts: 286 Forumite
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    edited 1 November 2019 at 9:10AM
    I'm surprised that banks pump money into these incentives when they can't even sort their systems out to handle the uptake. e.g. Lloyds (referring to not being able to complete switch form) "we don't currently have a date for when this fault will be rectified" and Marks and Spenser (referring to not being able to do things online) "we've no plans to change this at the moment.".
    Keef - Sheerness, Kent UK
  • Milarky
    Milarky Posts: 6,356 Forumite
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    The winners just happen to be... banks running incentives around this time. So no surprise there then!
    .....under construction.... COVID is a [discontinued] scam
  • jimjames
    jimjames Posts: 18,278 Forumite
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    I'm surprised that banks pump money into these incentives when they can't even sort their systems out to handle the uptake. e.g. Lloyds (referring to not being able to complete switch form) "we don't currently have a date for when this fault will be rectified" and Marks and Spenser (referring to not being able to do things online) "we've no plans to change this at the moment.".

    Lloyds switch worked perfectly for me so I suspect if it only affects a small minority that it's not a major priority for them. M&S not having an app is a pain but tolerable for the 5% RS
    Remember the saying: if it looks too good to be true it almost certainly is.
  • I presume you did the Lloyds switch from a PC and used the TAB key? Might have to borrow a laptop. ;)
    Keef - Sheerness, Kent UK
  • vacheron
    vacheron Posts: 1,946 Forumite
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    Well from personal experience they do work as I have just switched our joint current account to Natwest which I probably would not have done has the £150 incentive not been a factor, so Natwest +2 - Santander -2!

    I also think it is increasing the total number of current accounts. I now have five and would not still have five if it was not for the switching incentives as most are as a consequence of switching in the past, and I am now retaining them so I have eligible donor accounts to switch from in the future!.

    How many of the new accounts are actually providing worthwhile revenue to the banks in the form of fees etc. is a different story!
    • The rich buy assets.
    • The poor only have expenses.
    • The middle class buy liabilities they think are assets.
    Robert T. Kiyosaki
  • born_again
    born_again Posts: 18,362 Forumite
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    Once had to listen to our CEO wax lyrically how we had beat the new account target in 8 months. But come the end of year figures we were pretty much the same number of customers as the start of the year. Funny but he did not mention the previous statement & totally side stepped any question on customer retention over bribing new customers.
    Winners = Switchers & marketing teams who say Look how well that promotion did.
    Loser = Non switchers & staff who have to do all the work for nothing.
    Life in the slow lane
  • Perhaps when your bank offers switching incentives to new customers existing customers should ask for a loyalty payment?
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