Table of Contents
Issues in the Market
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- Key themes
- Definitions
- Data sources
- Abbreviations
Insights and Opportunities
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- Premium accounts may yet find their niche among Irish consumers
- Demographic changes to force a future shift in focus
Market in Brief
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- Current account ownership approaches saturation
- Low level of trust among consumers in banks
- Banks 'spreading the net' wider in search of income
- Economic challenges to remain for foreseeable future
- Demographic changes pose challenges for providers
- Branches and online – preferred means of account management
- Interest on balance the most common feature
- Interest on credit balances the main deciding factor
- High level of loyalty towards current account providers
- Reluctance to accumulate debt or purchase with credit
Fast Forward Trends
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- Trend 1: Prepare for the Worst
- What’s it about?
- What we’ve seen
- What next?
- Trend 2: Decline of Deference
- What’s it about?
- What we’ve seen
- What next?
Internal Market Environment
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- Key points
- Banks losing the trust of Irish consumers
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- Figure 1: Consumers agreeing with selected statements about trust, NI and RoI, 2011
- Middle-aged consumers have less trust
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- Figure 2: Consumers who agree with the statement ‘I have trust in banks’, by age, NI and RoI, 2011
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- Figure 3: Consumers who agree with the statement ‘I have trust in other financial institutions (eg Credit Unions, Post Office etc)’, by age, NI and RoI, 2011
- Consumers finding more cause for complaint
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- Figure 4: Banking-related complaints lodged with Irish Financial Ombudsman, by type of complaint, RoI, 2010
- Preference for cash remains high
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- Figure 5: Agreement with statement 'I like to pay cash for everything I buy', NI and RoI, 2006-10
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- Figure 6: Percentage of all transactions that cash accounts for, UK, 1999, 2009 and 2018
- Are banks 'spreading the net' wider in search of income?
- The end of ‘free banking’ in RoI?
- Service charges can add up
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- Figure 7: Overview of service charges and overdraft fees levied on current account holder, RoI, October 2011
- NI consumers face steeper service charges
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- Figure 8: Overview of service charges and overdraft fees levied on current account holders, NI, October 2011
- High variation in interest charged on overdrafts
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- Figure 9: Authorised overdraft interest rates, for selected banks, RoI, October 2011
- Higher variation in NI, despite lower rates
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- Figure 10: Authorised overdraft interest rates, for selected banks, NI, October 2011
- NI banks presenting charges in clear English
- Interest on credit balances no longer common
Broader Market Environment
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- Key points
- Economic outlook remains uncertain
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- Figure 11: GDP growth, actual and forecast, UK, NI and RoI, 2009-12
- NI
- RoI
- No easy solution to unemployment
- NI
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- Figure 12: Employment and claimant count numbers, actual, estimated and forecast, NI, 2009-12
- RoI
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- Figure 13: Employment, labour force and unemployment, RoI, actual, estimated and forecast, RoI, 2010-12
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- Figure 14: Unemployment rate, actual and forecast, RoI, 2009-12
- Interest rates low and unappealing
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- Figure 15: Interest rates, actual and forecast, RoI and NI, 2011
- Consumers' incomes under increasing pressure
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- Figure 16: Median gross weekly pay, NI, 2005-10
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- Figure 17: Median gross weekly earnings, RoI, 2006-11
- Confidence at close to all-time lows
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- Figure 18: Expectations of how household financial position will fare in next 12 months, NI, June 2011
- RoI confidence low, but better than in 2008
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- Figure 19: Consumer sentiment index, three-month moving average, RoI, 2002-11
- Online access central to current account management
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- Figure 20: Consumers with broadband connection at home, RoI and NI, 2004-10
- Demographic changes bring challenges
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- Figure 21: Population, by age, RoI, 2006-41
- Figure 22: Population, by age, NI, 2008-58
- Exodus of foreign nationals
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- Figure 23: Net migration, RoI and NI, 2000-10
- Young fear having to leave Ireland
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- Figure 24: Consumers agreeing that ‘having to emigrate to find work/go to college’ most concerns them, by age, RoI and NI, 2011
Strengths and Weaknesses
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- Strengths
- Weaknesses
Who’s Innovating?
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- Key points
- Co-op Bank offers switchers £200
- Co-op Bank also appealing to football fans
- Santander offering rewards for loyal customers
- Northern Bank launches new smartphone app
- Evolving the mobile banking offering
Market Size and Penetration
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- Key points
- More than 6 million current accounts in Ireland
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- Figure 25: Number of current accounts in issue, IoI, RoI and NI, 2005-15
- Current account ownership approaching saturation
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- Figure 26: Current account ownership, NI and RoI, 2008 and 2010
- Ownership lowest among consumers aged 15-24
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- Figure 27: Consumers with no current account, by age and socio-economic group, NI and RoI, 2010
- Lower ownership among the less affluent
- Ownership highest among married consumers
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- Figure 28: Current account ownership, by marital status, NI and RoI, 2010
- Little interest in premium and packaged accounts
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- Figure 29: Type of current account owned, NI and RoI, 2010
Companies and Products
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- Figure 30: Profiled banks, 2011
- AIB
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- Figure 31: AIB current accounts, RoI, October 2011
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- Figure 32: AIB current account service charges, RoI, October 2011
- Bank of Ireland
- RoI
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- Figure 33: Bank of Ireland current account, RoI, October 2011
- NI
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- Figure 34: Bank of Ireland current account portfolio, NI, October 2011
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- Figure 35: Bank of Ireland current account service charges, RoI, October 2011
- Figure 36: Bank of Ireland service and overdraft charges, NI, October 2011
- First Trust Bank
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- Figure 37: First Trust Bank current account portfolio, NI, October 2011
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- Figure 38: First Trust Bank current account service charges, NI, October 2011
- HSBC
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- Figure 39: HSBC current account portfolio, UK (including NI), October 2011
- National Irish Bank
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- Figure 40: National Irish Bank current accounts, RoI, October 2011
- Figure 41: Northern Bank current account service charges, RoI, October 2011
- Northern Bank
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- Figure 42: Northern Bank current accounts, NI, October 2011
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- Figure 43: Northern Bank current account service charges, NI, October 2011
- Permanent TSB
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- Figure 44: PTSB current accounts, RoI, October 2011
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- Figure 45: PTSB current account service charges, RoI, October 2011
- Santander
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- Figure 46: Santander current account portfolio, UK (including NI), October 2011
- Ulster Bank
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- Figure 47: Ulster Bank current accounts, NI and RoI, October 2011
- Figure 48: Ulster Bank current account service charges, RoI, October 2011
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The Consumer – How Accounts are Accessed
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- Key points
- Branches retain role in current account management
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- Figure 49: Financial transactions conducted through a branch, RoI, 2006 and 2010
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- Figure 50: Financial transactions conducted through a branch, NI, 2006 and 2010
- Consumers particularly keen on branches when seeking advice
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- Figure 51: Platform used to access financial advice, NI and RoI, 2006-10
- Telephone banking facilities losing relevance
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- Figure 52: Financial transactions conducted via telephone, RoI, 2006 and 2010
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- Figure 53: Financial transactions conducted via telephone, NI, 2006 and 2010
- Online emerging as preferred way to manage account
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- Figure 54: Financial transactions conducted online, RoI, 2006 and 2010
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- Figure 55: Financial transactions conducted online, NI, 2006 and 2010
The Consumer – Features and Transactions
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- Key points
- Interest on balance the most common feature
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- Figure 56: Features on main current account, NI and RoI, 2010
- Direct debit bill paying the most popular transaction
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- Figure 57: Transactions with main current account, NI and RoI, 2010
- ABC1s engage more with their current accounts
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- Figure 58: Consumers who have salary paid directly into main current account, by socio-economic background, NI and RoI, 2010
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- Figure 59: Consumers who conduct bill payments by direct debit through main current account, by socio-economic background, NI and RoI, 2010
The Consumer – Factors When Choosing Current Account Provider
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- Key points
- Interest rates most important factor when choosing bank
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- Figure 60: Most important factors when choosing a bank for a current account, RoI and NI, 2010
- Locality a rising concern for Irish consumers
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- Figure 61: Consumers who mention 'Locality' as an important factor when choosing a bank for a current account provider, RoI and NI, 2002 and 2010
- Growing concern about company reputation
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- Figure 62: Consumers who mention 'Locality' as an important factor when choosing a bank for a current account provider, RoI and NI, 2006 and 2010
- Online facilities now central to consumers' selection
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- Figure 63: Consumers who mention 'Telephone/internet banking facilities' as an important factor when choosing a bank for a current account provider, RoI and NI, 2002-10
- Personal recommendations becoming slightly more influential among RoI consumers
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- Figure 64: Consumers who mention 'Personal recommendation' as an important factor when choosing a bank for a current account provider, RoI and NI, 2008 and 2010
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- Figure 65: Consumers who mention 'Range of services' as an important factor when choosing a bank for a current account provider, RoI and NI, 2008 and 2010
- Overdraft charges attracting more attention
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- Figure 66: Consumers who mention 'Overdraft charges' as an important factor when choosing a bank for a current account provider, RoI and NI, 2002-10
- Most consumers choose own current account
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- Figure 67: Who chose main current account, NI and RoI, 2010
The Consumer – Length of time Current Account Held
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- Key points
- Half of RoI consumers bank for more than a decade
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- Figure 68: How long main current has been held, NI and RoI, 2010
- Age of account tends to correlate with age of consumer
- Evidence of higher loyalty among ABC1 consumers
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- Figure 69: Consumers who have held their main current account for more than ten years, by socio-economic background, NI and RoI, 2010
- Even additional accounts tend to be 'long held'
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- Figure 70: How long other (not main) current account held, NI and RoI, 2010
The Consumer – Attitudes Towards Finance
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- Key points
- Consumers reluctant to be in debt
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- Figure 71: Agreement with selected statements relating to personal finance, RoI and NI, 2010
- Growing aversion to debt
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- Figure 72: Agreement with the statement 'I don't like the idea of being in debt', NI and RoI, 2007-10
- Aversion to debt increases with age
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- Figure 73: Agreement with statement 'I don't like the idea of being in debt', by age, NI and RoI, 2010
- High level of reluctance to shop on credit
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- Figure 74: Agreement with statement 'If there's something I want, I save up for it', by gender, NI and RoI, 2010
- Growing awareness of personal finance among consumers
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- Figure 75: Agreement with statement 'I am more aware of personal finance than I used to be', by age and socio-economic background, NI and RoI, 2010
Consumer Target Groups
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- Key points
- NI target groups
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- Figure 76: NI consumer typologies, 2010
- Financial Controllers
- Disengaged
- Traditionalists
- Moderates
- RoI target groups
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- Figure 77: RoI consumer typologies, 2010
- Informed and Involved
- Disinterested
- Interested Observers
- Relationship Seekers
Appendix
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- NI TGI
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- Figure 78: Number of current or savings accounts held, by demographics, NI, 2010
- Figure 79: Number of current accounts held, by demographics, NI, 2010
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- Figure 80: Own/joint account, by ownership, by demographics, NI, 2010
- Figure 81: Type of current account owned (main account), by demographics, NI, 2010
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- Figure 82: Type of current account owned (other accounts), by demographics, NI, 2010
- Figure 83: Features of main current account, by demographics, NI, 2010
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- Figure 84: Features of other current account, by demographics, NI, 2010
- Figure 85: Transactions with main current accounts, by demographics, NI, 2010
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- Figure 86: Transactions with other current accounts, by demographics, NI, 2010
- Figure 87: How long main current account has been held, by demographics, NI, 2010
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- Figure 88: How long other current account has been held, by demographics, NI, 2010
- Figure 89: Who choose main current account, by demographics, NI, 2010
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- Figure 90: Who choose other current account, by demographics, NI, 2010
- Figure 91: Consumers who have opened new current accounts, by demographics, NI, 2010
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- Figure 92: Most important factors when choosing a bank for a current account, by demographics, NI, 2010
- Figure 93: Most important factors when choosing a bank for a current account (continued), by demographics, NI, 2010
- RoI TGI
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- Figure 94: Number of current or savings accounts held, by demographics, RoI, 2010
- Figure 95: Number of current accounts held, by demographics, RoI, 2010
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- Figure 96: Own/joint account, by ownership, by demographics, RoI, 2010
- Figure 97: Type of current account owned (main account), by demographics, RoI, 2010
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- Figure 98: Type of current account owned (other accounts), by demographics, RoI, 2010
- Figure 99: Features of main current account, by demographics, RoI, 2010
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- Figure 100: Features of other current account, by demographics, RoI, 2010
- Figure 101: Transactions with main current accounts, by demographics, RoI, 2010
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- Figure 102: Transactions with other current accounts, by demographics, RoI, 2010
- Figure 103: How long main current account has been held, by demographics, RoI, 2010
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- Figure 104: How long other current account has been held, by demographics, RoI, 2010
- Figure 105: Who choose main current account, by demographics, RoI, 2010
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- Figure 106: Who choose other current account, by demographics, RoI, 2010
- Figure 107: Consumers who have opened new current accounts, by demographics, RoI, 2010
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- Figure 108: Most important factors when choosing a bank for a current account, by demographics, RoI, 2010
- Figure 109: Most important factors when choosing a bank for a current account (continued), by demographics, RoI, 2010
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