Table of Contents
Overview
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- What you need to know
Executive Summary
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- The market
- Current account holders have moved online…
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- Figure 1: Number of customer instructions by telephone and computer (millions) at high street banks
- …and new regulations offer further opportunities for development
- Companies and brands
- All major banks have closed branches and invested in digital services
- Challengers look to digital opportunities, but Metro Bank bucks the trend
- The consumer
- Current account holders more likely to use online banking than branches
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- Figure 2: Use of different retail banking channels, July 2016
- Digital channels are the go-to choice for managing accounts
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- Figure 3: Retail banking channels used to complete various activities, July 2016
- Branches still hold some appeal
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- Figure 4: Preferred retail banking channels to complete various activities, July 2016
- Consumers are most satisfied with online banking
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- Figure 5: Satisfaction with retail banking channels, July 2016
- Consumers tend to be cautious about new features
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- Figure 6: Attitudes towards using new online digital features, July 2016
- Consumers are most likely to respond to letters from their bank
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- Figure 7: Favoured methods of contact by banks, July 2016
- Branch closures weaken customer relationships
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- Figure 8: Attitudes towards changing retail banking channels, July 2016
- Convenience has made the online revolution a success
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- Figure 9: Attitudes towards changing retail banking channels, July 2016
- What we think
Issues and Insights
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- Consumers have forgiven security concerns to reap the benefits of online banking
- The facts
- The implications
- Branches still have a place in modern banking
- The facts
- The implications
- Early adopters have significant influence over future innovation
- The facts
- The implications
The Market – What You Need to Know
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- Current account holders have moved online…
- …and new regulations offer further opportunities for development
Market Drivers
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- More people are registered for, and use online banking than telephone banking
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- Figure 10: Number of personal customers registered to access their accounts by telephone and computer (millions) at high street banks
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- Figure 11: Number of customer instructions by telephone and computer (millions) at high street banks
- Access to Banking Protocol
- PSD2 and open APIs to offer new ways to manage accounts
Companies and Brands – What You Need to Know
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- All major banks have closed branches and invested in digital services
- Challengers look to digital opportunities, but Metro Bank bucks the trend
Company Profiles
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- Barclays
- HSBC
- Lloyds Banking Group
- RBS Group
- Santander
- Nationwide
Launch Activity and Innovation
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- Online-only banks come to market
- Metro Bank uses ‘stores’ to fuel growth
The Consumer – What You Need to Know
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- Current account holders more likely to use online banking than branches
- Digital channels are the go-to choice for managing accounts
- Branches still hold some appeal
- Consumers are most satisfied with online banking
- Consumers tend to be cautious about new features
- Consumers are most likely to respond to letters from their bank
- Branch closures weaken customer relationships
- Convenience has made the online revolution a success
Banking Channels – Frequency of Use
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- Branches: Highly valued, seldom used
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- Figure 12: Use of different retail banking channels, July 2016
- Younger consumers are most likely to ask for in-branch help…
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- Figure 13: Use of “In-branch advice services (eg for more detailed queries and product advice)” at least once a month, July 2016
- …and to use mobile apps
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- Figure 14: Use of “Mobile banking (including smartphone/tablet apps)” at least once a month, July 2016
Choice of Banking Channels
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- Digital channels are the go-to choice for managing accounts…
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- Figure 15: Retail banking channels used to complete various activities, July 2016
- …and for making new applications
- Branches are the top choice to find help and to complain
- Most consumers stick to one channel
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- Figure 16: Retail banking channels used to complete various activities, repertoire, July 2016
Banking Channel Preferences
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- Consumers still appreciate the value of branches
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- Figure 17: Preferred retail banking channels to complete various activities, July 2016
- Little demand for mobile banking expansion
- Telephone banking: The worst of all worlds
Satisfaction with Channels
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- Online banking achieves the highest levels of satisfaction…
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- Figure 18: Satisfaction with retail banking channels, July 2016
- …but few service users are dissatisfied with anything
- Nationwide and Santander customers are most satisfied with their branches…
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- Figure 19: Satisfaction with in-branch counter services (eg paying and withdrawing money), by main current account provider, July 2016
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- Figure 20: Satisfaction with in-branch advice services (eg for more detailed queries and product advice), by main current account provider, July 2016
- …while Barclays and NatWest lead the way in apps
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- Figure 21: Satisfaction with mobile banking (including smartphone/tablet apps), by main current account provider, July 2016
Attitudes towards New Channels
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- Consumers tend to be cautious about new features
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- Figure 22: Attitudes towards using new online digital features, July 2016
- Millennials are the most likely to be early adopters
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- Figure 23: Attitudes towards using new digital banking features, by generation, July 2016
Attitudes towards Customer Engagement
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- Consumers are most likely to respond to letters from their bank
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- Figure 24: Favoured methods of contact by banks, July 2016
- Emails are a popular choice, but are open to fraud
- Non-online banking customers would rather visit a branch
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- Figure 25: Customers’ favoured methods of contact by banks about a matter regarding their account, by use of online banking, July 2016
Attitudes towards Branch Closures
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- 55% think branch closures negatively impact banking relationships
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- Figure 26: Attitudes towards changing retail banking channels, July 2016
- Call centres aren’t a sufficient replacement
- HSBC and Barclays customers most likely to have lost their local branch
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- Figure 27: Agreement with the statement “My local branch has closed in the last 5 years”, by main current account provider, July 2016
Attitudes towards Changing Channels
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- The importance of convenience
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- Figure 28: Attitudes towards changing retail banking channels, July 2016
- The digital revolution has been positive, and more is to come
- New features could cause account switches
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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