Current account switching soars in banking backlashCustomers vote with their feet amid scandals
21 July 2012
Mutual building societies and small banking institutions have seen a surge in new account applications in recent weeks in reaction to the problems of big name banking brands, Which? has found.
Nationwide, Co-operative Bank and Yorkshire Building society have reported an increase in activity spurred on by the IT woes of NatWest/RBS and Barlcays involvement in the interest-rate rigging scandal.
Customers vote with their feet and switch bank accounts
Such events have prompted many customers to vote with their feet and take their business elsewhere.
Research carried out by Which? shows that Charity Bank has seen a 300% increase in new accounts being opened in the last two weeks (though this amounts to 48 accounts), while it has had a 214% increase in deposits between the beginning of January 2012 and the end of June compared to the same period last year.
Building societies Nationwide and Co-op, both Which? Recommended Providers for current accounts, have had 67% and 61% increases in the number of people switching accounts to them within the last month respectively.
Metro Bank reports that its customer base is up 10% month-on-month, even though customers can only open new accounts in one of its 12 branches across Greater London.
Norwich and Peterborough Building Society told us interest in its Gold current account is up 40%, while its staff members have seen a 10% increase in activity in branches. Also, the number of new triple access saver accounts opened at Yorkshire, Chelsea and Barnsley branches, more than doubled at the beginning of July.
Action point: How to switch bank accounts - read our guide to find out how to change bank accounts
Why are customers switching accounts?
First there were technical problems at NatWest which affected millions of its customers, as well as many others at RBS and Ulster Bank, as people didn't receive payments into their bank account or found they were unable to move their money.
Action point: How to complain to NatWest - read our helpful guide if you were affected by NatWest's IT problems
That was soon followed by the scandal surrounding Barclays and the fixing of London inter-bank offered rates (Libor), the interest rate at which banks lend to each other.
Action point: Read more on our coverage of the Barclays Libor scandal.
How to switch bank accounts
Plenty of people find the prospect of switching bank accounts daunting - our research shows that only 6% of consumers have switched bank accounts in the past year - but it is easier than you think.
If you want to vote with your feet and switch bank, Which? is here to help. You can read our guide to switching bank accounts and read up on our Which? Recommended Providers for current accounts to find the best for customer service and satisfaction.