Interesting article about switching I thoughtI would share. It’s probably too soon for the impact of challengers to really change these stats, but I like to think the attitude to switching banks is changing as it becomes easier and more convenient. What are your thoughts? Comments welcome here, or on the article itself.
Whenever I chat with colleagues I find the same thing is ALWAYS the same, they think it’s a pain to switch. CASS and how simple it is, is not widely known it would seem? Plus there’s always the what’s the point when “All banks are the same anyway?” argument.
Another regular feature are horror stories from the person’s current bank; none of which seem to bother putting an official complaint in, let alone being aware there is an ombudsman.
I often think that the potential blemishing of a spotless credit record from the process going wrong is not worth the risk.
It’s probably safer to open a new account and manually go through getting payments moved over. At least that’s what I’d do as a “full switch”
Honestly, I think most customers signing up to challenger banks at the moment usually fall into the early adopter category, we know we are signing up for a journey, and are willing to sign up for new things. We also tend to go out and research ourselves, meaning we tend to know more about the switching service through proactive research, and we know therefore how easy it is.
Simply by signing up for a new bank, we show we are willing to consider switching, and so are more likely to switch.
As far as the general population goes, however, I think most people still see switching banks as a hassle that will probably go wrong, affect their life in an adverse way and risks missed payments and therefore credit score issues.
I think there is still inherent mistrust in the banking system, and there is a case in Joe Public of better the devil you know, so people are still more likely to stick with their current bank as they don’t see the alternatives any better and so only see the potential downfalls of a switch combined with a service that is no different once the switch is complete. The current advertising campaign for CASS is obviously trying to push the message that CASS is easy and seamless, but if the resultant product is no different post switch, then why risk it?
I think a tipping point could be when more challenger banks and making more noise about their better services, once people actually see a reason to switch then they will be more inclined to take what they see as a risk. At the moment most challenger banks do the vast majority of advertising on social media and the web, I haven’t seen many (if any) traditional media ads for challenger banks, by doing that the advertising is actually being focused on the segment of the market that is already likely to know about them. This is a great way of growing in small chunks and, as new businesses, not taking on too much to handle, but once challenger banks go a bit more ‘mainstream’ with larger scale advertising and a wider portion of the public see the services they offer, with a genuinely different offering, at THAT point you may see an increase in switching.
I wonder if B part of Clydesdale and Yorkshire bank have had a large intake with their £250 switching offer!
Shame their app and customer service are dreadful.
Also, I think overdrafts are a major barrier to switching. I was quite deep into my overdraft when I switched to Starling from Santander, I spoke to CS and told them the overdraft I needed and was pre-approved based on the fact I would have a full switch, so my overdraft in Santander would be closed and my overall credit liability wouldn’t change, however I still felt this was slightly stressful, and this is with the instant customer service of Starling, I stayed with Santander for years rather than switching to another legacy bank simply because I had no idea how my overdraft would be handled and whether it would leave me out of pocket.
In the current credit climate, I can image there are MANY more people like me. If a bank (any bank) was to offer an account application where an overdraft was pre-approved based on a switch and the monies to clear the overdraft were transferred as part of the switch, (and this was marketed and explained clearly) that would encourage MANY more people to switch IMHO.
I haven’t fully switched, I use Starling for almost everything but my Barclays account gets me £7 cashback a month through certain Direct Debits.
I also found that certain banks favour customers when it comes to Mortgages, so i have a few accounts getting a tiny bit of interest just so I am a customer and don’t have to pay sky high fees when changing the mortgage every 2 years.
Until starling offers this, and savings accounts, I cant fully switch.
I think it’s much easier (and totally free) to just open a new account and gradually migrate things over. As easy as the CASS sounds, I’d rather do it myself, but maybe I’m a control freak!
Like @Bmacrow I’d say I signed up to Starling as an ‘early adopter’, but it doesn’t yet meet all my banking needs (e.g. joint accounts). I’m hanging around because I like the look of the things on the roadmap - things like ringfenced pots are genuinely novel and very useful.
The fact that transactions populate instantly is nice but TBH this is just par for the course with all the banks in Australia. Sure they don’t do push notifications, but my legacy bank in Australia had real-time transaction data and a decent app >8 years ago . UK banking lags far behind Australia on tech/online/app adoption and rollout. It’s good for Starling that the established players over here are such laggards - there’s your market
You should offer something a deal to graduates to switch with their student overdraft when the interest free period comes to an end…could work very well as the new thing seems to be money transfer cards which are basically interest free loans with a small transfer charge.
I’ve used the service to move from Yorkshire to Nationwide in the last year and it mostly went well. A few issues around direct debits but following a formal complaint Nationwide did accept they had fluffed a few things.
I’d happily move to Starling when & if things work. My negative experience with the last move hasn’t put my off any future ones.
My wife on the other hand won’t move - same bank for 16 years.
But that’s just it, isn’t it? Your switch ended in a formal complaint. Don’t get me wrong, I rate Nationwide and recommend them to anyone, but it shouldn’t need a formal complaint to put things right, and yet it did. And your business relationship with your new building society is already off to a bad start.
Of course it wasn’t the best start however 11 months later I’m still with them and things have been ok.
I see more and more people are open to switching. I have been almost ready to switch to Starling for a while, but aren’t ready yet for the following reasons:
- SecureCode isn’t supported and it’s caused me issues once or twice and resulted in me using my legacy card
- The number of outages that starling have had
- I’m on Android and can’t do a partial switch, which means I have to close my old account. If this weren’t the case I may have performed a partial switch so I could keep my legacy account for when Starling isn’t an option or isn’t working.
I’m definitely open to switching, but it has to be right. I’ve been with my bank since 1994 and never had a single issue. There has to be some compelling to make me switch. The feature Starling have, like goals, go a long way towards it but they don’t outweigh the current disadvantages. When the time is right I’ll do it. My wife is also in exactly the same position and almost there with being ready. One of her “must haves” is a balance after each transaction shown in the app.
It may seem that this post is just pointing out flaws, but it isn’t. I’m trying to underline that people’s attitude to switching is definitely changing, but the new account has to make sense and not leave them in a worse position than where they’re switching from.
Whenever I talk about the CASS with friends or colleagues, it’s always the same thing that comes up “what if my Direct Debits don’t switch” although mine did work perfectly from Nationwide to Starling.
I fully understand what you’re saying. I’ve been with First Direct and they’re superb.
Customer service is great, speak to a helpful, knowledgeable human who is able to sort your issue first time every time . They’ve never had any downtime that I’m aware of.
They offer a £250 free overdraft.
The secure code thing they do (I never realised how many sites wanted it until I realised Starling didn’t have it!)
As for savings goals, I have about 3/4 savings accounts all viewed on 1 page in app. So I can move money around and I know which money is for which. So for me very similar.
Their payments screen is so swift and clean for me, from log on to a paid bill via app I would say is 20 seconds or less.
I think people over the years have become disillusioned with banks (with good reason). New banks have to offer that ‘X Factor’ plus have great customer service. People I believe are fed up with poor service and will stay if they have this and won’t jump ship not knowing what they’re getting into. People are wise to switching bonuses. I thought about the £250 for B, but the customer service is rumoured to be a bit duff. Weighing it all up I’ll stsy with FD, I’m thinking it’s not worth the potential hassle.
This isn’t a moan about Starling, but banks in general. It’s just you need to have a consistent good record with customer service, and a good fully functional app to back it up, and maybe a web interface. The web option seems to be coming more and more popular, and maybe this is something that may need to be seriously considered.
I wish Starling well, but you’re not at the level of FD yet. Maybe in 6-12 months I’ll review again. Many other others may be happy to swap if they’re with a dreadful bank, but I’m not.
Of course First Direct have had a long head start and there are some inherent advantages in being owned by a mammoth bank like HSBC, card processing systems perhaps being one of them . But they do consistently top the customer ratings.
People that I talk to are concerned over DD transfer
They are worried that the transition between accounts will not go smoothly leaving them with unnecessary angst and stress
This then further compounds onto the fear of a bad credit score with all the consequences that this will bring
Lastly people still believe in loyalty. My wife has banked with the same bank for 32 yrs and her father for over 50 yrs . They simply want to remain loyal
I did wonder about this as there is a known issue with Three where the DD doesn’t come across and gets declined when next requested. I know the CASS means all incurred costs have to be sorted out, but what happens with the missed payment that gets recorded on your credit file with Experian, CallCredit etc?
And guess who has to do all the running to sort things out
The banks are responsible hence my compensation from Nationwide when I moved to them.