Table of Contents
Executive Summary
-
- The market
- Confidence has increased in 2019
-
- Figure 1: Consumers’ financial wellbeing, three-month moving average, January 2017-July 2019
- FCA introduces rules to fix ‘dysfunctional’ overdraft market
- Companies and brands
- Lloyds Banking Group is the biggest retail banking provider
- Goldman Sachs offers savings and digital banks offer loans
- Advertising spend returns to marginal growth
- Nationwide is the most recommended brand
-
- Figure 2: Key metrics for selected brands, August 2019
- The consumer
- Barclays tops the list for current accounts
-
- Figure 3: Current accounts held, July 2019
- Nationwide account holders are most likely to hold additional products
-
- Figure 4: Other banking products held, July 2019
- 25-44s most likely to use their main current account for daily spend
-
- Figure 5: Method of daily spending, by age and gender, July 2019
- People are generally pretty satisfied with their bank
-
- Figure 6: Satisfaction with banking services, July 2019
- A fifth have switched banks
-
- Figure 7: Likelihood to switch account, by age, July 2019
- Bonus and cashback are the biggest drivers of switching
-
- Figure 8: Motivations to switch, July 2019
- People prefer to deal with issues in person
-
- Figure 9: Preferred methods of communication with banks, July 2019
- What we think
Issues and Insights
-
- Are banks placing too much focus on digital?
- The facts
- The implications
- Challenger banks face a struggle to become the ‘main bank’
- The facts
- The implications
- Is it time for more targeted banking brands?
- The facts
- The implications
The Market – What You Need to Know
-
- Confidence has increased in 2019
- FCA introduces rules to fix ‘dysfunctional’ overdraft market
Market Drivers
-
- Confidence has increased in 2019
-
- Figure 10: Consumers’ financial wellbeing, three-month moving average, January 2017-June 2019
- Wage growth continues to exceed inflation
-
- Figure 11: Inflation versus earnings growth, July 2016-June 2019
- Household savings ratio recovers slightly in 2018
-
- Figure 12: Household savings ratio, 2000-18
- Bank of England holds interest rates at 0.75%
-
- Figure 13: Quoted household interest rates January 2014-July 2019
- Banking and credit card complaints flat year-on-year
-
- Figure 14: Aggregate complaints data, H2 2017-H2 2018
Regulatory and Legislative Changes
-
- Open Banking develops, but slower than expected
- Changes to overdraft regulation
- PPI deadline closes in
- FCA launched a consultation on fair treatment of vulnerable customers
- Strong Customer Authentication changes delayed
Companies and Brands – What You Need to Know
-
- Lloyds Banking Group is the biggest retail banking provider
- Goldman Sachs offers savings and digital banks offer loans
- Advertising spend returns to marginal growth
- Nationwide is the most recommended brand
Leading Players
-
- Lloyds Bank continues to lead the sector
-
- Figure 15: Customer deposit and loan values for the leading banks, 2018*
- Lloyds Banking Group
- Barclays
- RBS Group
- Santander
- HSBC Group
- Nationwide Building Society
- Others
- Botched IT migration creates the most challenging year for TSB
- Monzo hits 2 million customers
- Metro Bank accounting scandal
- CYBG moves forward with Virgin Money integration
- Starling aims to break even in 2020
Launch Activity and Innovation
-
- Open Banking
- Lloyds launches Open Banking app for credit cards and savings
- CYBG launches energy switching service
- Nationwide and Starling Bank partner with CreditLadder
- Investing in innovation
- First Direct launches mobile co-creation lab
- Nationwide and Lloyds launch digital innovation centres
- Security enhancements
- TSB and NatWest offer account opening by selfie
- Santander adds combined voice and phone ID authentication
- NatWest launches first biometric card in the UK
-
- Figure 16: NatWest Biometric card, March 2019
- New launches
- Marcus by Goldman Sachs launched in the UK
- RBS prepares to launch Bó
- Digital banks start offering loans
Advertising and Marketing Activity
-
- Advertising expenditure by retail banks stabilises
-
- Figure 17: Above-the-line, online display and direct mail advertising expenditure on retail banking, 2014/15-2018/19
- Halifax moves into top spot
-
- Figure 18: Leading spenders on above-the-line, online display and direct mail advertising expenditure on retail banking, 2014/15-2018/19
- TV takes lion’s share of spend
-
- Figure 19: Above-the-line, online display and direct mail advertising expenditure on retail banking, by media type, 2018/19
- TSB places greatest focus on TV advertising
-
- Figure 20: 10 leading spenders on above-the-line, online display and direct mail advertising expenditure on retail banking, by media type, 2018/19
- Brand building is the focus of advertising
-
- Figure 21: Above-the-line, online display and direct mail advertising expenditure on retail banking, by product type, 2018/19
- Nielsen Ad Intel coverage
- Sponsorships
Brand Research
-
- Brand map
-
- Figure 22: Attitudes towards and usage of selected brands, August 2019
- Key brand metrics
-
- Figure 23: Key metrics for selected brands, August 2019
- Brand attitudes: Santander seen to reward loyalty
-
- Figure 24: Attitudes, by brand, August 2019
- Brand personality: Challenger banks create a sense of fun
-
- Figure 25: Brand personality – Macro image, August 2019
- Nationwide is viewed as reliable, honest and helpful
-
- Figure 26: Brand personality – Micro image, August 2019
- Brand analysis
- Nationwide is the most recommended brand
- Barclays and Lloyds – prestigious and authoritative but impersonal
- Santander and Halifax enjoy high levels of trust
- HSBC and NatWest suffer low recommendations
- First Direct delivers an excellent experience
- TSB and Co-operative struggle to rebuild brands
- Digital banks leverage a playful and progressive image
- Metro Bank struggles to stand out
The Consumer – What You Need to Know
-
- Barclays tops the list for current accounts
- Nationwide account holders are most likely to hold additional products
- 25-44s most likely to use their main current account for daily spend
- People are generally pretty satisfied with their bank
- A fifth have switched banks
- Bonus and cashback are the biggest drivers of switching
- People prefer to deal with issues in person
Current Account Ownership
-
- Barclays is most widely used current account provider
- Big four continue to dominate
-
- Figure 27: Current accounts held, July 2019
- Nationwide has the oldest customer base
-
- Figure 28: Current accounts held, by age and socio-economic group, July 2019
- Challenger banks struggle to gain ‘Main Bank’ status
-
- Figure 29: Proportion of current account holders saying it is their main current account, July 2019
- More than a third of 25-34 year olds hold multiple current accounts
-
- Figure 30: Repertoire analysis of current accounts held, by age, July 2019
Banking Products Held
-
- More than half hold credit cards or savings accounts
-
- Figure 31: Other banking products held, July 2019
- Savings accounts are most likely to be held with the main account
-
- Figure 32: Other banking products held with main bank, July 2019
- Nationwide members are most likely to hold additional products
-
- Figure 33: Other banking products held with main bank, by main bank, July 2019
Account Used for Daily Spending
-
- 25-44s are most likely to use their current account for daily spend
- Less than a fifth rely on cash
- Over-65s are most likely to use credit cards for daily spending
-
- Figure 34: Method of daily spending, by age and gender, July 2019
Satisfaction with Banking Services
-
- People are generally satisfied with their online banking services…
- …and least happy with interest rates
-
- Figure 35: Satisfaction with banking services, July 2019
- Nationwide customers value the branch network
-
- Figure 36: Satisfaction with communication channels (any satisfied), by main bank, July 2019
- RBS customers less happy about service
-
- Figure 37: Satisfaction with banking service (any satisfied), by main bank used, July 2019
- Most people are satisfied with their main bank
-
- Figure 38: Overall satisfaction, July 2019
Key Driver Analysis
-
- Service is key but customers are still attached to branches
-
- Figure 39: Key drivers of overall satisfaction with main current account provider, July 2019
-
- Figure 40: Overall satisfaction with main current account provider – Key driver output, July 2019
Switching Habits
-
- A fifth have switched in the last three years
- Switching peaks among 25-34 year olds
-
- Figure 41: Switching habits, by age and gender, July 2019
- Switching peaks among higher-income households
-
- Figure 42: Switching habits, by household income, July 2019
- Over a quarter of non-switchers under 45 would consider switching
-
- Figure 43: Likelihood to switch account, by age, July 2019
Motivations and Barriers to Switching
-
- Bonuses encourage switchers but banks are scaling back
-
- Figure 44: Motivations to switch, July 2019
- Spending tools hold greater appeal to the young
-
- Figure 45: Encouragements to switch, by age and socio-economic group, July 2019
- Happy customers don’t switch
-
- Figure 46: Discouragements to switch, July 2019
Preferred Methods of Communication
-
- People prefer to deal with issues in person
-
- Figure 47: Preferred methods of communication with banks, July 2019
- The key is making real people easily accessible
-
- Figure 48: Preferred methods of communication with banks, by age, July 2019
Appendix – Data Sources, Abbreviations and Supporting Information
-
- Abbreviations
- Consumer research methodology
Appendix – Key Driver Analysis
-
- Interpretation of results
-
- Figure 49: Overall satisfaction with main current account provider – Key driver output, July 2019
-
- Figure 50: Satisfaction with main current account provider, July 2019
Back to top