LONDON’S BUSINESS NEWSPAPER
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CHALLENGER BANKS OUTDO BIG BOYS WITH BETTER RATES
FINTECHS ON THE MARCH AS THEY POACH CUSTOMERS AWAY FROM SLOW-TO-RAISE-RATES BIGGER PLAYERS EXCLUSIVE
CHRIS DORRELL MANY challenger banks have seen an influx in customers in recent months as clients abandon high street lenders because of their low savings rates. High street banks have come under attack from regulators and lawmakers for offering “measly” rates on easy access savings accounts. The five largest banks – HSBC, Natwest, Barclays, Lloyds and Nationwide – offer rates between 0.9 per cent and 1.75 per cent. The influential Treasury Committee has repeatedly drawn attention to the low rates on offer at the high street banks. Harriet Baldwin, chair of the Committee, has accused the major lenders of failing in their “social duty” to
encourage saving, while fellow member Angela Eagle said banks were “blatant[ly] profiteering”. However, many challenger banks offer much higher rates. Monzo, Revolut and Starling all offer rates of 3.25 per cent or more, with Atom Bank offering 3.95 per cent on easy access accounts. The better rates have attracted more and more customers to the challengers. Atom Bank saw an 82 per cent increase in its customer base in the year to March, with the bank suggesting much of that increase was linked to its savings rates. Monzo told City A.M. it had seen 800,000 customers open an instant access savings account since February. Mark Mullen, chief executive at Atom Bank, said: “The best way to stop them [high street banks] profiting at the expense of customers is to encourage
people to get online, vote with their fingers and move their hard-earned money to a better rate. We think savers should be getting paid, not played by their bank.” Meanwhile, Chase UK, which offers a rate of 3.8 per cent, said its customer numbers had tripled since May last year reaching 1.6m customers. Many were attracted by the competitive savings rate. Ford Money, which offers 4.25 per cent on its easy access account, has taken on 34,000 new customers this year. Ford’s Will Davies said that the rates at large banks were as exciting as “watching paint dry”. Yet another challenger said its savings balances had increased by around 50 per cent in the past six months, with anecdotal evidence suggesting customers were leaving high
street banks to choose better rates. While challenger banks have been pulling in the customers, the bosses of the high street banks have been summoned to a meeting with the regulator today to discuss rates. A range of proposals have been suggested – including a ‘savings charter’ to mirror the mortgage charter signed last week – but City A.M. understands the regulator is not pursuing any specific outcome. £ Additional reporting by Abi Dean
British stars prove music to industry’s ears as UK record exports pass £700m high JESS JONES ED SHEERAN, Adele and Harry Styles have helped ensure the UK’s music exports had a record year in 2022, topping £700m. The value of UK music sales and streams overseas increased by 20 per cent last year to £709m – a jump of over £100m in a single year and
the first time that figure has ever breached the £700m mark, according to new stats from the British Phonographic Industry (BPI). The trade association for music companies and record labels attributes the success to chartbusting hits released by UK artists last year and streamed on services across the world.
‘As It Was’ by Harry Styles (pictured) was the moststreamed track globally of 2022, according to data from Luminate, with tunes by artists Glass Animals, Dua Lipa, Elton John and Kate Bush close behind in the top 10.
Interim BPI boss Sophie Jones said the record-breaking export numbers “represent an exceptional achievement in the face of unprecedented competition on the global music stage” and puts the UK on track to hit £1bn in the nation’s annual music exports by 2030. “But for this growth to
continue the UK needs to remain a supportive environment for investment in music, and policymakers should continue to work with industry to maximise the overseas potential of UK music,” Jones said. The industry saw increases in newer markets, including Latin America and the Middle East.
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