- Contents
- *Introduction
- Key themes in the report
- Data Sources
- Consumer data
- Definitions
- Abbreviations
Ownership of current accounts in Ireland remains strong, with 96% of RoI and 95% of NI consumers owning at least one account in 2014. However, the overall number of active current accounts in the market has suffered as consumers close secondary and tertiary accounts to reduce fees and make managing their finances easier.
Moving forward, the market is set to become more dynamic, with account switching becoming a more common practice in both NI and RoI – helping to drive competition and in turn innovations within the types of services offered with current accounts.
Key themes in the report
What impact will account switching guarantees and legislation have on the market? – How has account switching impacted the market to date? What drives consumers to switch current account providers?
What could help drive uptake of ‘packaged’ current accounts? – What services or features would encourage more consumers to upgrade to packaged current accounts? Who are the primary users of such accounts?
How important are overdraft facilities to current account users? – How many consumers currently make use of overdraft facilities? Are they aware of any charges levied at them?
How many current accounts does the average Irish consumer own? – How many consumers own multiple accounts? Are there any benefits or drawbacks to this?
Which banks do consumers have their current accounts with? – Who are the key providers of current accounts in the NI and RoI market? How has the closure of a number of providers in RoI affected the total number of current accounts in issue?
Other Mintel reports of relevance include:
Plastic Cards – Ireland, July 2014
Packaged and Current Accounts – UK, July 2014
Insurance – Ireland, May 2014
Mortgages – Ireland, March 2014
Savings – Ireland, January 2014
Current Accounts – Ireland, December 2013.
Data Sources
In compiling this report, Mintel has gathered data from separate NI and RoI sources (eg NISRA, CSO). In some cases, therefore, it has not been possible to provide comparable data for each region. For the purposes of this report:
Ireland or IoI refers to the island of Ireland.
NI refers to Northern Ireland.
RoI refers to the Republic of Ireland.
Therefore, ‘Irish consumers’ refers to both NI and RoI consumers.
Consumer data
Exclusive consumer research was commissioned by Mintel and conducted by Toluna in July 2014. The following questions were asked to internet users aged 18+ for both NI and RoI:
“How many personal current accounts do you have? Please include any you hold jointly with someone else. Please exclude business accounts.”
“Which bank or building society do you hold your current account(s) with? If you have more than one account, please respond in relation to your ‘main’ account (ie the one that your salary is paid into or the one you use the most regularly) and, separately, in relation to any other accounts you have.”
“Have you ever switched where your main current account is held? If so, how long ago was this? If you’ve switched more than once, please respond in relation to your most recent switch.”
“You stated that you have moved your main current account in the last 5 years. Which of the following factors prompted you to switch accounts?”
“Please imagine that you had to pay a monthly fee of £10/€15 for current account services. If you could design your current account that you paid a monthly fee of £10/€15 for, which of the following features would you want to include? Please select up to 5.”
Definitions
This report examines the dynamics of the current account market in Ireland, assessing the main trends that are underway and consumer attitudes towards a range of factors. The report examines the personal current market only.
Current accounts can be classified into various sub-types according to their target market and pricing model. In NI, the most common type of current account is the free-if-in-credit (or ‘free banking’) model. This is where the customer does not pay any direct fees for having the account, if in credit, or for core services such as direct debits and cheques. Interest is usually charged on any money borrowed via an overdraft, which can be either ‘authorised’ or ‘unauthorised’.
Charges are usually significant on borrowing above an arranged overdraft limit. Student and graduate accounts are variants of the free-if-in-credit model and may offer special features, such as an interest-free overdraft. Similarly, basic bank accounts are based on the free-if-in-credit model and do not carry any charges provided there are sufficient funds in the account to meet any payments made.
The other main category is the premium or packaged account. This involves the customer being charged a monthly fee in return for a range of additional benefits, such as travel insurance and motor breakdown cover. In RoI, premium or packaged accounts are far less common. However, even standard accounts typically entail monthly or quarterly maintenance charges – which are fixed, upfront amounts levied on the customer's account – in addition to transaction fees that depend on usage. In certain cases, it is possible to avoid these monthly or quarterly charges by maintaining a certain balance in the account.
