This article is from a week ago, but nonetheless, sharing it as I’m sure not everyone has seen it (I hadn’t!)
Figures today from the Current Account Switch Service (CASS) show Starling Bank October and December 2020 with 15,960 customers using the service to switch their primary account to Starling.
That was behind Lloyds Bank, which saw 29,556 net switches buoyed by its £100 cash bonus for new customers, but ahead of Clydesdale Bank with 8,584 switches.
The figures echo Q3 of 2020 when Starling was also the 2nd most switched-to UK bank with 12,652 net switches, and Q2 when Starling was the No.1 most switched-to bank with 11,998 net switches.
Triodos gained over 15 customers for each customer it lost, ahead of Starling Bank(9.8 customers) and far ahead of Lloyds (3.4), adding a net gain of 1,043 customers to its accounts.
I switch to Starling whenever I want to close another account, because it’s so much easier than closing directly. So I doubt the figures mean Starling is getting loads of new customers. I’d love to see how many switches are to accounts opened within the last month or two.
I see Triodos mentioned there. I’ve looked at Triodos a couple of times and I know I shouldn’t because a lot of what I read I just find difficult to believe, but I have looked at the most famous review site and Triodos hasn’t fared particularly well on reviews.
I love the whole idea of ethical banking, but if the product isn’t up to speed tech wise, it’s a non starter for me.
They have no free tier, which is a no-no from me. I would be paying £3 a month (£36pa) for what exactly ? What banks should be doing anyway.
For a recycled plastic card that costs pennies to make. And a promise not to lend to anyone dodgy? So, in essence, I give them money to NOT do something? Maybe if I pay them £100 a year they can promise not to pay their CEO million pound bonuses ?
Additionally
Cash withdrawal abroad - 2.5% of the transaction
Cheques ? 12 free per year, then 60p per cheque
Receiving money from outside the UK (or in a foreign currency over €/$100.00 received into your account - €7 please
I can sort of get on board with the £3 a month fee given their general ethos and focus on sustainability. It doesn’t really seem to be possible to launch and run a ‘free’ current account without either having punitive fees for ‘transgressions’ or burning through hundreds of millions of pounds worth of VC capital in order to try and get enough volume that meagre margins eventually turn in to an overall profit. Neither of those things are what Triodos is about.
However where it falls down for me is that they have fees for things like foreign currency transactions - if I am going to pay a fee then I’d expect it to be all in.
And by the looks of it, they are aren’t directly connected to any of the UK payment schemes (understandable given the low volume), all of that stuff appears to be handled by RBS - not exactly the most ethical bank in the world.
But yes, in general you are paying them to not do a lot of things - and it’s because those things, according to Triodos, are not ethical - but those things are highly profitable and is how other banks pay for the free current accounts.
Same, I don’t mind the £3 fee if I know where it’s going and what it’s achieving ie. fir more staff, app upgrades etc…
What I can’t get over is the lack of Google Pay support as well the feeling of if I’m paying anything for an account I should be able to do anything I need to with it; Triodos don’t have a way to pay in cash and cheques are via post so I’d be paying £3 a month and still having to keep a backup account open for the rarity I need to pay in cash.
I like Triodos in every way besides the tech side of things. In a world where everything is sans, it’s refreshing to see a brand go with serif, especially as eloquently as they do. The serif branding looks nice, I think, and I like the leaf card too, because I’m into plants in general. But that’s the superficial stuff that matters little. I also like that the card is made from plants rather than standard plastic.
They tend to back up a lot of what they say with evidence, and their entire ethos is so radically transparent which I love.
In terms of ethical credentials, I believe them to be amongst the most credible of organisations. They go out of their way to back up their bark with a bite, so to speak. I’m happy to keep paying for that, even if it’s not my primary account. It’s a model I applaud, so I’m voting with my wallet here. Customer support is good too, albeit slow of late.
But, there’s no Apple Pay. The app isn’t great. Transfers are slow. You do get text messages rather than push notifications for spending, which I kinda like. But they’re very much the traditional sort of bank.
Given their size, I think they’ve performed especially well here, only losing a small percentage of customers compared to sign ups. Starling too have done well in that regard.
I’m under the impression that I’m paying to avoid all the predatory crap other banks pull to turn a profit, where free customers are subsidised by those who get trapped in cycles of debt and bank charges. Worth noting how the entire industry sky rocketed their overdraft interest rates whilst Triodos kept theirs at a single fair rate for all. It’s to replace the income other banks earn from more underhand tactics, so they can actually turn a profit and stay afloat.
Recycled plastic cards are pennies yes, but theirs is not recycled plastic. It’s made from plants, and unlike plastic is biodegradable. These cards are slightly more expensive to make than your typical plastic cards I believe.
All fair criticism here I think, and really highlights just how legacy they still are in a world where modern banks are ushering in the disappearance of those costs.
Maybe I’m differently built, but there surely can be a workable ethical business model that does not require you to pay for a service not to be received. And yes, £3 is effectively for nothing and the fees are steep, even by “normal” bank standards. The not inconsiderable forex charges are ironic for a Dutch based international bank.
I think the technical/product shortcomings and the things you’re paying them not to do are different things -
You’re paying them not to offer services to those who would use those services ‘unethically’, and you’re also paying them to keep a fee structure that doesn’t rely on some paying punitive fees so others can have free banking. Plus the other ethical initiatives they undertake.
The technical/product shortcomings simply seem like issues of volume to me. Their current account product doesn’t have enough volume to cover the cost of implementing those features, and they don’t have a never ending stream of VC money to pay for them.
Starling do seem to also seem to be trying, to some extent, to put about their ethical credentials, so I guess they believe they do have a business model that they would consider ‘ethical’ which allows for free banking. But I guess that’s where it comes down to what the individual considers ethical and how far you want to take it - Starling have had a lot of VC investment including from Goldman Sachs and QIA which for many would negate some of their claims to be ethical. Even without that, it’s clear just looking at their websites that operating ethically is nowhere near as main a focus for Starling as it is for Triodos.
Triodos is clearly a niche bank and their target market is those who really want ethics to be front-and-centre where their finances are concerned - and for some that is worth paying for. They’ll never be a massive bank and I doubt that’s their aim.
TSB stopped offering credit interest on all their accounts during this period, plus they don’t have in-app cheque imaging and have continued to suffer IT problems - so no surprise, in short.
Santander also tweaked their flagship 123 account again, to massive detriment, which likely prompted a mass exodus. Other tweaks were also made to more niche products, such as their student account, which made them relatively less attractive.
The exodus from Tesco is not surprising either as they seem to be running down their current account operation.
I’m a bit surprised that Nationwide lost so many customers, but it may again be that their digital operation is quite poor and reliant on card readers.
Co-operative suffered a big outage at Smile (which I think is counted under the Co-op figures) and also has a generally poor app, so again there’s no surprise there.
And with this I whole heartedly agree, their digital operation is quite poor. If it were not for the insurance package, I’d shift our joint account to Starling or if RBS ditched the card readers, I’d move it there. My opinion about their digital app, is that it needs a significant overhaul.
Nationwide for those that need it, do have a good branch network, but in the 7 years we’ve held an account with them, we’ve used a branch twice, both times to pay in cheques, but that was a few years back. We signed up for the account online, so we don’t have an allocated branch anyway.
That’s interesting. Whenever I’ve signed up with banks online, I’ve always been allocated a branch nearby (this was with both NatWest and Lloyds). So (if you have one) what does it say on your chequebook? Does it just have the national office address?
Yes, you are entirely correct, it is the national office address on the Nationwide cheques. My Wife and I only ordered our first cheque book from Nationwide about 5 months ago just in case we ever needed to write a cheque because once we’d closed our Lloyds account, we obviously had to shred our Lloyds cheque book.
One of the reasons we closed our Lloyds joint account, apart from the fact we actually stopped actively using it once my Wife transferred her salary to Starling, was we moved a couple of hundred miles away from the town where we used to live. It didn’t make any sense to me to hang onto a Lloyds account allocated to a branch hundreds of miles away from where we now live.
Edit: It’s the same with my RBS account. I signed up entirely online with that and I don’t have an allocated branch. Everything was handled through their registered office in Scotland I believe.
That’s an interesting view. I’ve never seen any significance of the "allocated” branch. I assumed it’s simply to enable a sense of customer geographic spread.
Ah, I’ve never seen that before. Maybe it’s a Nationwide thing? As I say, in my experience high st banks assign you a local branch during the online application. Although you say it’s the same with RBS. Do you have a chequebook with them?
Considering you can’t even speak to a specific branch on the phone anymore, and I can’t think of anything that I can do at my local/registered HSBC/NatWest/Lloyds that I couldn’t do at any other branch in the country, I think you’re right. Maybe it was significant in the past before online banking?
To be fair, with the amount of branch closures across the whole banking scene, it doesn’t make much sense full stop to allocate branches to customers in my view.
No, I don’t have a chequebook with RBS and for the time being, I won’t be requesting one. Where I live now, there isn’t a RBS branch within 50 miles of where I live as it is. Allocating me a specific branch would therefore be pointless.
Aha, maybe with RBS that’s the deciding factor?! I know that RBS (used to?) use a branch selector during their online applications, because people used to select the Child & Co sort code to get an account with them and a fancy debit card and cheque book. But perhaps if you live a certain distance away from an RBS branch the system determines that it would be pointless assigning you a local branch, and so just registers you as a national customer?
I’d imagine NatWest and RBS use the same application processes, and when I applied for a NatWest account online I was either assigned or made to choose (I can’t remember) a branch - but it just so happens that I do have one nearby.
I was in discussion with RBS to transfer my account to the Holts arm of their business, but they basically told me my account would have to be managed out of Farnborough, and I just canned the idea in the end.
You’ve got me thinking now, perhaps it would be fun to order a RBS chequebook just to see what address they use, but I’m fairly confident it will just show the Scotland address.
