Table of Contents
Introduction and Abbreviations
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- Geographical, national and regional definitions
- Conversion factors
- Population
- BMRB Target Group Index sample sizes
- Abbreviations
Executive Summary
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- Impressive growth in current accounts in both RoI and NI
- Evidence of financial apathy among RoI and NI consumers; facilitation of switching accounts to shake this up?
- Opportunities limited for smaller players in RoI and NI market…for now
- Cheque book accounts remain the most popular with RoI and NI consumers
- For some, one account is never enough
- Seven in ten RoI consumers owned a current account in 2004, with ownership slightly higher in NI
Market Drivers
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- Economic background
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- Figure 1: Health of the economy, percentage growth, RoI and NI, 2002-05
- Initiatives to facilitate switching accounts in RoI and NI – the most important development in the market in recent years?
- Population changes of vital importance to market
- Branch banking is here to stay as multichannel delivery becomes key to increasing account usage and profitability
- Current accounts provide opportunity to increase ‘share of wallet’
- Government initiatives to drive uptake of current accounts among benefit seekers and pensioners
- Banks in the spotlight
Market Size and Segmentation
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- Figure 2: Number of current accounts in RoI and NI, 2000-04
- Market growth was impressive – 37% growth in RoI and 20% growth in NI
- Value held in RoI current accounts is rising
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- Figure 3: 12-month averages of amounts held in Irish residents’ current accounts, RoI, 2002-04
- Segmentation by type of current account
- Cheque book accounts most popular with RoI and NI consumers
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- Figure 4: Type of current account held, RoI and NI, 2000 and 2004
- Joint accounts increasing at slower pace than that of individual current accounts
- High-interest accounts show a decline in popularity among RoI consumers – is there a preference to use savings accounts to earn interest?
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- Figure 5: Penetration of high-interest current accounts, RoI and NI, 2000 and 2004
- Conversely, NI consumers show signs of increasing demand for high-interest cheque book accounts – do NI consumers prefer accessibility to their money?
- Electronic transactions and automated payments
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- Figure 6: Volume of non-cash transactions in RoI, 1999-2002
- Figure 7: Volume of automated direct credits, UK, 2000-04
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The Supply Structure
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- Figure 8: Market share of leading current account providers, RoI, 2004
- Abbey
- AIB/First Trust Bank
- Alliance & Leicester
- Bank of Ireland
- Halifax
- National Irish Bank and Northern Bank
- Nationwide
- Permanent TSB
- Post Office
- Royal Bank of Scotland
- Pure-plays and direct banks
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- Figure 9: Interest paid monthly on instant current accounts among UK providers, March 2005
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Distribution
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- Branch and ATM banking
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- Figure 10: Branches and ATMs of clearing bank groups in RoI and the top four banks in NI, 1998-2003
- Direct banking
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- Figure 11: Awareness and use of telephone and Internet banking, RoI and NI, 2004
Advertising and Promotion
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- Permanent TSB spending big in a bid to challenge status quo
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- Figure 12: Total advertising expenditure of current account providers and proportion spent on current account products, RoI, 2002 and 2004
- Mass-media channels favoured by current account providers in RoI
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- Figure 13: Top three advertising channels used by current account providers, RoI, 2002 and 2004
- Northern Bank pushing the boat out in NI with advertising expenditure
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- Figure 14: Total advertising expenditure of current account providers and proportion spent on current account products, NI, 2002 and 2004
The Consumer
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- Lifestage definitions and population sizes
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- Figure 15: Lifestage definitions and lifestages as % of population, RoI and NI, 2004
- Current account ownership
- Seven in ten RoI consumers owned a current account in 2004 – an extra one in ten on 2000
- 35-44-year-olds represent key target market – in terms of current account products and share of wallet
- Gulf in current account ownership among affluent and less affluent
- Occupation and automated payments a key driver in demand for current accounts
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- Figure 16: Penetration of current accounts, by gender, age, socio-economic group, marital status, working status and lifestage, RoI and NI, 2000 and 2004
- Ownership of current accounts slightly higher in NI than in RoI; three quarters of NI consumers owned a current account in 2004
- Opportunity to increase uptake of current accounts among young and older in NI
- Little variance in current account ownership throughout socio-economic groups in NI
- Basic bank accounts and automated welfare payments to increase uptake among E consumers in NI?
- With marriage and full-time employment comes increased financial responsibility for RoI and NI consumers
- Lifestage analysis shows that relationships and current accounts go hand-in-hand
- Just under half of RoI and NI students own a current account
- Number of accounts held
- Ownership of one bank account most common in RoI – but only just
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- Figure 17: Number of accounts (current or savings) held, RoI and NI, 2002 and 2004
- NI consumers exhibit a growing trend towards multiple account ownership, as NI couples prefer to share and share alike
- Money matters left to women in RoI and men in NI?
- Multiple ownership = financial literacy = demand for additional banking products and services
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- Figure 18: Number of accounts (current or savings) held, by gender, age, socio-economic group, marital status, working status and lifestage, RoI and NI, 2004
- Older RoI consumers saving for a rainy day but do they know what to do with their money?
- Almost half of AB consumers in NI juggling three or more accounts
- Opportunity to target agricultural workers and tradesmen
- Link between having young children and owning a number of accounts
- Conversely, couples without children have highest ownership of two accounts or more
- Type of current accounts owned – individual/joint
- Joint accounts popular with affluent 35-44-year-olds in part-time employment
- Higher demand for ‘no-frills’ banking among young, free and single in RoI
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- Figure 19: Type of current accounts held, by gender, age, socio-economic group, marital status, working status and lifestage, RoI, 2004
- Indications that couples without children in RoI own both an individual and a joint account
- Affluent NI men more likely to grant control over finances
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- Figure 20: Type of current accounts held, by gender, age, socio-economic group, marital status, working status and lifestage, NI, 2004
- As in RoI, younger NI consumers exhibit demand for basic current accounts
- Multiple ownership – both an individual and joint account
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- Figure 21: Ownership of current account in own name and joint current account, RoI and NI, 2000 and 2004
- Affluent and couples without children display greatest confidence with finances in RoI and NI
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- Figure 22: Ownership of individual and joint current account, by gender, age, socio-economic group, working status and lifestage, RoI and NI, 2004
- Bank account activity
- Signs of ‘financial apathy’…
- …but RoI consumers show some tendencies to save
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- Figure 23: Bank account activity in the last 12 months, RoI, 2000 and 2004
- A significant percentage of RoI consumers opened new current accounts but did not stray far
- NI consumers show higher tendency to switch current account providers
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- Figure 24: Bank account activity in the last 12 months, NI, 2002 and 2004
The Future
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- Population figures key to future growth
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- Figure 25: Trends in RoI population, by age band, 1999-2009
- Figure 26: Trends in NI population, by age band, 1999-2009
- Competition set to intensify and drive the market
- Focus on profitability
- Current account mortgages: first step in financial product integration?
Forecast
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- Impressive growth set to continue in RoI and NI
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- Figure 27: Forecast number of current accounts, RoI and NI, 2004-08
Appendix: Financial Attitudes – RoI and NI
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- Attitudes towards finance among RoI consumers
- 25-34-year-olds are good money managers, due to recent commitments
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- Figure 28: Agreement with financial statements, by age, RoI, 2004
- ABC1s are also good with money
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- Figure 29: Agreement with financial statements, by socio-economic group, RoI, 2004
- Consumers in the F socio-economic group demand a tailored banking service
- Attitudes towards finance among NI consumers
- 25-34-year-olds in NI are more aware of personal finance but need the bank to hold their hand
- Prudence more common among the older age groups
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- Figure 30: Agreement with financial statements, by age, NI, 2004
- ABC1s in NI lack the time for personal finance
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- Figure 31: Agreement with financial statements, by socio-economic group, NI, 2004
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