Losers emerge in the wake of current account switching

Business banking news review: week ending 7 Aug 2014

The writing is definitely on the wall for some banks after the new current account switching rules have gone into effect, and the common scrawled word is loser.

In fact there are some major personal and business bank account suppliers that have been revealed to be losing shedloads of customers thanks to new rules that require current account switches to take place much sooner than ever before. The biggest and most egregious losers, according to official data from the Payments Council, include two large yet quite beleaguered banks: Lloyds and The Co-Operative.

Lloyds – formerly Lloyds TSB until the forced spin-off of hundreds of branches after its role in the 2008 banking crisis – has been losing customers left and right over the past 12 months. A total of 103,00 Lloyds banking customers have jumped ship in search of better offers, despite the bank’s lucrative 4 per cent interest rate it’s offering on its flagship current account. It just goes to show you that sometimes customers care less about the so-called ‘best’ deals than they do about conducting their banking business with a firm they respect – and one they can trust to not bollocks everything up during a massive changeover like Lloyds went through with the branch spin-off. There were more than a few ruffled feathers over the last year when persistent computer glitches wreaked havoc with customers and their ability to access their cash during the restructuring.

Meanwhile, The Co-Operative wins the dubious honour of having the most embarrassing gap between the number of customers that took up current accounts with the bank versus those who fled like rats on a sinking ship. The Co-Op lost more than 17,000 customers to rivals – which, truth be told when you compare that to Lloyds and their absolutely horrific loss doesn’t sound so bad – but only added less than 2,000 switched accounts. In other words, the new switching rules have not benefited Co-Op in the least and have only brought a completely embarrassing set of figures that highlights just how bad the bank’s reputation amongst Brits who know where to put their money for safe-keeping – and which banks to avoid like the plague!

I mean, sure Lloyds losing more than 100,000 accounts is a staggering figure, but think about it this way: the High Street retailer added more than 83,000 in that same period. That’s a lot of new customers, even if it doesn’t cover the entire shortfall. But Co-Operative just seems to have no luck at all!

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