Once again, Nationwide posts the highest net switching gains by some distance in the latest quarterly UK switching statistics. We have been here before. Today, the figures that are released relate to the fourth quarter of 2023.
Once again, it is a case of take a bow Nationwide. It posts a whopping net gain of 163,363 switches, ahead of a rather distant second-placed Barclays with almost 13,000 net gains and Lloyds with around 6,000.
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Looking back to the final quarter of 2022, it was a similar story. Nationwide was not just ahead of its rivals-it was in another league. It led the pack with 112,000 net gains in Q4 2022, ahead of second-placed NatWest with under 6,000 net gains.
Nationwide grows market share from 6.2% to 10.6%
The 7-day UK account switching service launched in 2013. I recall that, at the time, the head of Nationwide told me on a conference panel, that Nationwide would achieve a 10% market share for current accounts. At that time, Nationwide had a market share of just 6.2%. It was a bold ambition. It has achieved that goal and more. Nationwide currently has a market share of around 10.6% of UK current accounts.
That growth has come at the cost of regular account switching incentives. It is however, an investment that is paying off. That is evident from Nationwide’s financial results over recent years. Not to mention its regular strong performances in the CMA customer satisfaction surveys.
When Nationwide drops its account switch incentive, there are predictable results. The UK’s largest building society posted a net loss of switchers in each of the first two quarters of 2023. This covered a period when it was not offering switch incentives.
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By GlobalDataThis followed eight successive quarters reporting net gains. In the four quarters of 2022, Nationwide posted net gains of 111,941, 3,248, 5,598 and 12,503. In 2021, Nationwide posted net gains in each quarter of 33,691, 33,828, 3,601 and 1,474. Until the first quarter of 2023, Nationwide had not endured a quarter of net losses since Q4 2020.
Switch incentives end across the sector – for now
The latest Nationwide switch incentive has now ended. Indeed, at present, there is no cash incentive on the market for UK current account holders to switch bank. As recently as a few weeks ago, five current account brands were offering up to £200 to switch.
It is a fair bet that overall switching will dip in the next quarter. The loss of switch incentives across the sector will see to that. 2023 represented a record year for overall switching with 1,457,165 switches. 2024 has kicked off with a 6% decline in first quarter switches. They are down from 341,000 last year to 320,000 in the first quarter of 2024.
PayUK: top notch switch administration
The UK does 7 day-switching rather well. There is no comparable service of note in any other market. PayUK continues to execute the service with commendable efficiency. The service covers some 53 brands, highlighting the level of choice in the market. It remains something of a mystery why Metro Bank is not a member as the reasons for its absence remain unexplained. It is the only major UK current account provider not to participate. No matter – the quarterly numbers reflect all other players and again highlight the power of switching incentives.
