Table of Contents
Issues in the Market
-
- Key themes of the report
- Definition
- Abbreviations
Insights and Opportunities
-
- RoI current account price war – room for ‘modest’ banking?
- Global economic downturn modifying customer needs
Market In Brief
-
- Healthy growth in current accounts in both RoI and NI
- Standing out from the rest
- RoI favours Big Two while NI consumers still keen on the Big Four
- NI consumers still leaving a paper trail, unlike RoI consumers
- Multiple account ownership on the rise and still more popular in NI
- Changing set of criteria driving account switching – providers take note
Fast Forward Trends
-
- Trend 1: Brand Experience
- What's it about?
- What we've seen
- What next?
- Trend 2: No Middleman
- What's it about?
- What we've seen
- What next?
- Trend 3: Corner Store
- What's it about?
- What we've seen
- What next?
Strengths and Weaknesses in the Market
-
- Strengths
- Weaknesses
Internal Market Environment
-
- Key points
- Developments on the European scene
- Brussels legislators threaten to get tough
- Pan-European consensus converging
- SEPA compliance a major driving force
- Low level of card fees paid in Ireland directly linked to SEPA project
- EU likely to put pressure on Irish Government
- Irish bankers lobbying for card duty to be abolished – out of step with Europe
- UK market could get messy
- Unfair charges being investigated
- Mainland UK consumers next in line
- Competition Commission makes new demands of the banks
- October 2008 deadline for NI banks
- Overdraft fees and bank charges being contested in record numbers
- No decision until 2008
- UK account providers forced to bite back
- Irish current account market makes for interesting analysis
- Chip and Pin now operational in both markets
- More RoI people switching accounts
- RoI online banking uptake unremarkable but steadily increasing
- Greater emphasis on segmentation
- Technology is a key driver
- Packaged accounts and the cheque book’s demise
- Product marketing turns aggressive
- Increased advertising and promotional activity in the media
- Product augmentation in the form of packaged current accounts
- Competing on terms of interest on credit balances
- Financial attitudes
-
- Figure 1: Attitudes towards personal finance, December 2007
- NI consumers appear more short-termist
- RoI consumers keen to stay in financial control
Broader Market Environment
-
- Key points
- The economy
- Rising interest rates
-
- Figure 2: UK and eurozone interest rates, 2002-07
- Mortgage repayments to increase
- Under-40s with a credit card habit likely the hardest-hit by rate rise
- Strong GDP growth both North and South
-
- Figure 3: The economic outlook for RoI and NI, 2006-08
- Consumer spending still a major engine for growth in RoI
- NI consumers happy to keep spending but have their concerns
- Inflationary pressure in the UK affecting NI consumers
- Rising incomes good news for RoI financial institutions
- Disposable incomes take a battering in NI
- Declining unemployment levels in both NI and RoI
- Consumer confidence a key indicator for the economy
- RoI consumer confidence hits four-year low
- Population statistics
- Changing demographics
-
- Figure 4: Population change, by age group, NI, 2000-20
-
- Figure 5: Population change, by age group, RoI, 2000-20
- Long-term responsibilities start later
-
- Figure 6: Average age at marriage, by gender, NI and RoI, 2000-05
-
- Figure 7: Average age of women at birth of first child, NI and RoI, 1991-2005
- Time-poor individuals require online banking
- Changing norms in Irish and UK society
- Promotion of a cashless society
- EU10 nationals aged 25-44 the typical immigrant profile for RoI
- Disparate broadband penetration between both states
Market Value and Forecast
-
- Key points
- RoI growth pushes ahead
-
- Figure 8: Number of current accounts in issue, RoI and NI, 2001-12
- Value held in RoI is rising while NI continues to gain ground
-
- Figure 9: 12-month averages of amounts held in Irish residents’ current accounts, RoI and NI, 2004-06
- Irish consumers prefer a chequebook with their account
-
- Figure 10: Type of current account held, RoI and NI, 2004-06
- Joint accounts increasing at slower pace than individual current accounts
- Future outlook
- A cashless society by 2012?
- Internet offers considerable potential
- Competition set to intensify and drive the market
Competitive Context
-
- Key points
- Limited competition for personal current accounts
- The great unbanked
- Basic bank accounts
Who’s Innovating?
-
- Key points
- New products and applications
- Pay-as-you-go banking looming
- The ‘Polish pound’ turns lucrative
- Going green the new black
- Encouraging consumers to save
- Technology of the future is here now
Companies and Products
-
- Key points
-
- Figure 11: Market share of leading current account providers, RoI, 2007
- Figure 12: Market share of leading current account providers, NI, 2007
- Abbey (NI only)
- Alliance & Leicester (NI only)
- AIB/First Trust Bank
- Bank of Ireland
- HBOS
- National Irish Bank and Northern Bank
- Nationwide (NI only)
- Permanent TSB
- Post Office (NI only)
- The Royal Bank of Scotland (Ulster Bank)
- Pureplays and direct banks
Channels to Market
-
- Key points
- Branch and ATM banking
- NI banks contributing to a branch renaissance
-
- Figure 13: Branches and ATMs of clearing bank groups in RoI and the top four banks in NI, 2002-06
- 134% growth over four years in ATM penetration in RoI
- Direct banking
- Online banking
-
- Figure 14: Methods used to access banking services, RoI and NI, 2007
Consumer: Ownership of Current Accounts
-
- Key points
- Banking literacy
-
- Figure 15: Penetration of any banking product, NI and RoI, 2002-07
- Current account ownership
-
- Figure 16: Current account ownership, NI and RoI, 2007
- Demographic summary
- Married full-timers with teenage kids – typical profile
- Switching behaviour
-
- Figure 17: Number of current accounts, NI and RoI, 2007
- Multiple account holding more prevalent in NI
- More RoI consumers are unbanked than in NI
- Bank account activity
- High demand for basic banking facilities among young people
- Joint accounts popular with affluent 35-44-year-olds
- Couples without kids own individual and joint accounts
Consumer Current Account Priorities
-
- Money talks: top 5 priorities when choosing a current account
-
- Figure 18: Top five reasons for choosing a current account, NI and RoI, 2006
- Reasons for choosing a current account
-
- Figure 19: Most important reasons for choosing a current account, NI, 2002-06
- Smarter positioning the key for account providers
- Other factors at work besides interest rates
- The future may lie further down the list
-
- Figure 20: Most important reasons for choosing a current account, RoI, 2002-06
Appendix
-
- Regional definitions
- Population 2006
- BMRB Target Group Index (TGI) sample sizes
- Summary of Competition Commission ruling to NI banks – May 2007
- Adults who have used the Internet
-
- Figure 21: Number of current accounts in issue, RoI and NI, 2001-12
- Adults who have used the Internet
-
- Figure 22: Adult population who have used the Internet in the last 12 months, by gender, age, socio-economic group, lifestage, working status, presence of children and marital status, NI and RoI, 2006
- Figure 23: Forecast population change, by age, NI, 2000-20
- Figure 24: Forecast population change, by age, RoI, 2000-20
- Additional consumer data tables
- Employment statistics
-
- Figure 25: Percentage in employment, by age group, NI and RoI, 2000-05
- Household composition
-
- Figure 26: Number of households, by size, NI and RoI, 2000-05
- Figure 27: Consumers who choose ‘The amount of debt that I have’ as a concern, by gender, age, socio-economic group, working status and marital status, NI and RoI, 2006
- Figure 28: Current worries, NI and RoI, 2006
-
- Figure 29: Type of current accounts held, by gender, age, socio-economic group, lifestage, marital status, working status and presence of children, NI, 2006
- Figure 30: Type of current accounts held, by gender, age, socio-economic group, lifestage, marital status, working status and presence of children, RoI, 2006
-
- Figure 31: Number of current accounts held, by gender, age, socio-economic group, marital status, working status and number of people in household, lifestage, NI, 2007
- Figure 32: Number of current accounts held, by gender, age, socio-economic group, marital status, working status and number of people in household, lifestage, RoI, 2007
Back to top