Are the banking Big Four heading for a toppling?
Normally in life, the ones who got there first are the biggest and have the financial clout to keep themselves there, but recently smaller competitors have been able to break into some of the UK's biggest markets. Take the energy sector- more and more switchers are choosing smaller companies as they grow disillusioned with the megabucks screwed out of them earned by the faceless megacorps. Not to mention the fact that they often offer better deals.
Now it seems a similar effect might be taking hold in the bank sector. While the Big Four, Lloyds, Barclays, HSBC and RBS currently account for more than three quarters of the current account market, new figures from two of the smaller players suggests that the tide is turning and people are choosing smaller alternatives in greater numbers.
Recent figures released by Santander and TSB (coming in at number 5 and 7 on the banking chart) are taking around a third of new current account openings. Both are actively seeking new customers, and both are offering tempting sweeteners to the deal, be that cashback on regular purchases like the Santander 123 account, or offering deposit-account beating rates of interest as TSB are doing.
Current account switching, a notoriously turgid market, has been enlivened by the new faster switching service, and Santander said that almost one in four people switching current accounts in the last nine months in the UK had moved to the bank, claiming 132,900 new current account customers had signed up in the first half of the year.
In addition, TSB – recently divorced from Lloyds and currently stepping out on the London Stock Exchange- announced that it had accounted for 9.2% of new account openings in the second quarter of the year.
Regulators and politicians are, apparently, very keen more competition and diversity among current accounts (unless they are bankers) amid fears that the market is dominated by the major banks and that very few people bother to switch. The big boys are already subject to a Competition and Markets Authority investigation into their dodgy dealings, announced earlier this month.
So are you one of the switcherees? What is Santander or TSB giving you that your old financier can’t match? Or will you stick with the same old same old regardless?