The Salary Calculator

Whether you’re opening a bank account for the first time, heading off to university or just looking to switch things up, when it comes to choosing the right bank for you, there’s a lot to weigh up.

At The Salary Calculator, we’ll guide you through the process. In this week’s article, we’ll explore:

• Reasons to switch banks
• Banks’ ESG and CSR considerations
• Which banks offer the best digital services
• How to make the switch

Why you might be thinking of changing banks

According to recent statistics, the number of people with current accounts switching banks has surged as of late, increasing by more than 70% in the first three months of 2023. In fact, 341,075 switches occurred between January and March 2023. So, why are so many choosing to switch banks? Well, reasons vary. Many are looking for better deals, stronger customer service, sign-on bonuses, and increasingly more environmentally and socially conscious organisations.

According to a survey conducted by MoneySuperMarket, one of the main reasons people switch is to access higher interest; the survey showed that 41% of customers made the change to boost savings. Following behind this were cashback and benefits (20%), overdrafts (14%), and finally, customer service (5%).

Of course, there are also some people to whom switching banks hasn’t occurred to and those who don’t know that there are alternative routes to take. Indeed, a Frost Bank survey found that only 11% felt a sense of ‘financial belonging’ with their current banks, and yet, nearly half (44%) said they wouldn’t change banks. So, let’s break that down.

The ESG and CSR considerations

There’s no denying that conscious consumers are on the rise. Never before have so many people put so much thought into how their purchasing decisions affect others, animals and the planet. This extends to where people house their money, too, with more and more people waking up to the reality of how banks operate.

Research shows that these days, 82% of consumers want a brand’s views to align with their own, 76% won’t give their money to those brands that don’t, and a quarter of people having a zero-tolerance policy for ‘unethical behaviour.’ Further to this, recent data has revealed that 75% of banking customers now want more information about their bank’s carbon impact; 48% want a bank that helps them in making more environmentally-friendly purchasing decisions.

Barclays has been found to be one of the largest investors in fossil fuels, investing over $144.9 billion in fossil fuels in 2020. Triodos, on the other hand, has been identified as one of the leading banks for lower carbon emissions, as have Monzo and Starling. Indeed, research from MotherTree found that moving £5,767 from Barclays to Triodos can cut your carbon footprint by a massive 1.7 tonnes per year!

Digital banks with features that give them an edge

While banking is becoming more and more digitalised, not every bank is on the same level just yet. These days the majority of apps offer basic digital services, but some are still catching up when it comes to smartphone apps, digital wallets, personal financial planning, security notifications and face and voice biometrics.

Some of the top digital banks include Revolut, which provides smart budgeting tools, with built-in analytical tools. Monzo is another, which equips customers with real-time notifications, virtual cards, spending budgets and saving pots. Starling similarly gives customers spending insights and assists with savings goals.

Of course, this all comes down to preference and you may prefer brick-and-mortar banks, although, as we’ll discuss in our next section, these days, they’re few and far between.

Branch locations

Digital features might add a bit of pizazz to your banking experience, but maybe you prefer dealing with your finances face-to-face. Indeed, a third of Brits still prefer to do banking in person. In this case, it’s likely your switch will be informed by the proximity of your closest bank.

Interestingly, it’s not just older customers who prefer to visit a branch; although 44% do choose in-person interaction, a fifth of 18-34-year-olds also prefer to do all their banking in person.

Unfortunately, despite this preference, bank branches are dropping like flies. The recent figures show that 5,162 bank and building society branches have closed since January 2015. Further, according to Which? an additional 206 branches are set to close by the end of the year. So, this may not be as pertinent a consideration as it once was for customers.

How to make the switch

The hardest part of the switch is finding a bank that aligns with your ethics, gives you the rates you’re looking for and offers the features you need. In this decision-making process: compare, compare, compare.

Here, the following might be useful:

• MoneySuperMarket
• USwitch
• GoCompare

It’s also important to make sure that you don’t miss the small print and that you’re up to date with all the Ts and Cs.

Once you’ve decided to make sure you have a smooth transition, make a note of all your automatic payments and deposits, and prepare them for the switch, so you don’t end up missing any payments.

Finally, enrol, and be sure not to close your old account until your new account is active and ready to use.