Table of Contents
Introduction
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- Abbreviations
Executive Summary
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- Market share
- Top five banking groups account for 85% market share
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- Figure 1: Main current account provider, by banking group, May 2014
- Product ownership and channel use
- Product ownership and cross-sales
- Incumbents increasingly at risk of losing wallet share
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- Figure 2: Products held and cross-sales, May 2014
- Frequency of use of main banking channels
- Online and mobile banking integrate banking into everyday life
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- Figure 3: Frequency of banking channel use, May 2014
- Perceived value of banking channels
- Online banking leads the way
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- Figure 4: Importance of banking services, May 2014
- Attitudes towards retail banking
- Bargain hunting increasingly important to consumers
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- Figure 5: Consumer attitudes towards banking, May 2014
- Account switching
- Consumer intentions in using the Current Account Switch Service
- Inertia reigns supreme
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- Figure 6: Consumer intentions in using the Current Account Switch Service, May 2014
- Awareness of the current account switch service
- Three quarters of consumers aware of the Current Account Switch Service
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- Figure 7: Awareness of the Current Account Switch Service, May 2014
- Features/services appealing to potential switchers
- Banks face a difficult decision when it comes to channel prioritisation
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- Figure 8: Features/services appealing to potential switchers, May 2014
- Consideration of switching to various banking providers
- Challengers start to appeal to consumers
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- Figure 9: Consideration of switching to various banking providers, May 2014
- What we think
Issues and Insights
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- As long as people still believe that banks are “all the same”, the Current Account Switch Service will have minimal impact
- The facts
- The implications
- Challenging demographics: how to impress Generation Y
- The facts
- The implications
- Are we looking at a future of branchless banks?
- The facts
- The implications
- Adapting the branch to fit diverse consumer requirements
- The facts
- The implications
Trend Application
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- Inter-generational Knowledge Exchange
- Predictive financial advice at your fingertips
- Access Anything, Anywhere
Market Developments
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- Key points
- The economic recovery is feeding through into retail banking results
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- Figure 10: Retail banking profits, by provider, 2013 and 2014
- Digital disruption has raised consumer expectations
- Analysis of big data can help incumbents maintain their advantage in a changing environment
- Developments in FinTech challenge banks’ ownership of consumer data
- Competition in the industry is slowly increasing
- Regulation is holding back innovation
- Talking ‘bout my reputation
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- Figure 11: Results for first quarter of Current Account Switch Service
Retail Banking Providers: Market Share
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- Key points
- Decreasing dominance?
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- Figure 12: Main current account provider, May 2014
- Simple, personal and fair leads the way
- Lloyds’ market share reflects the spin-off of TSB branches
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- Figure 13: Market share, May 2014
- TSB is the exception, not the rule
Company Profiles
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- Barclays
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- Figure 14: Key financial data for Barclays plc, 2011-13
- Figure 15: Key financial data for Barclays plc, 2013 and 2014
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- Figure 16: Key data for Barclays PLC, 2012 and 2013
- HSBC
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- Figure 17: Key financial data for HSBC, 2011-13
- Figure 18: Key financial data for HSBC, 2012 and 2013
- Figure 19: Key data for HSBC, 2012 and 2013
- Lloyds Banking Group
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- Figure 20: Key financial data for Lloyds Banking Group, 2011-13
- Figure 21: Key financial data for Lloyds Banking Group, 2013 and 2014
- Figure 22: Key financial data for Lloyds Banking Group, 2012 and 2013
- Figure 23: Key financial data TSB, 2013 and 2014
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- Figure 24: Key data for TSB, 2013 and 2014
- Nationwide
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- Figure 25: Key financial data for Nationwide, 2013 and 2014
- Figure 26: Key data for Nationwide, 2013 and 2014
- RBS
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- Figure 27: Key financial data for RBS Group, 2011-13
- Figure 28: Key financial data for RBS Group, 2013 and 2014
- Figure 29: Key financial information for RBS Bank, 2012 and 2013
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- Figure 30: Key data for RBS Group (UK Retail Banking Division), 2011-13
- Santander
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- Figure 31: Key financial data for Santander UK, 2011-13
- Figure 32: Key financial data for Santander UK, 2013 and 2014
- Figure 33: Key data for Santander Group, 2012 and 2013
- The Co-operative Bank
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- Figure 34: Key financial data for The Co-operative Bank, 2012 and 2013
- Figure 35: Key data for the Co-operative Bank, 2012 and 2013
- Virgin Money
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- Figure 36: Key financial data for Virgin Money, 2012 and 2013
- Figure 37: Key data for Virgin Money, 2012 and 2013
Brand Communication and Promotion
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- Key points
- Adspend grew by 10% over the course of 2014
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- Figure 38: Advertising expenditure by retail banking providers, 2012-14
- Figure 39: Retail banking advertising expenditure, by advertiser, 2012-14
- £67 million spent on brand building
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- Figure 40: Retail banking expenditure, by advertiser, 2013 and 2014
- Television is the key marketing channel
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- Figure 41: Retail banking advertising expenditure, by media type, 2014
- A note on adspend
Product Ownership and Cross-sales
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- Key points
- Cross-selling opportunities
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- Figure 42: Financial services product ownership and cross-sales, May 2014
- Technology will erode the “one-stop shop” appeal of the industry giants
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- Figure 43: Financial services product ownership and cross-sales, by number of products held with main current account provider, May 2014
- Keeping up with the Joneses…or with Nationwide and Barclays
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- Figure 44: Savings account and credit card ownership, by provider, May 2014
- Disintermediation dilemma
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- Figure 45: Number of products held with main current account provider, May 2014
- Capturing Generation Y
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- Figure 46: Number of products held, by age, May 2014
Importance of Banking Channels
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- Key points
- Online (almost) every time
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- Figure 47: Relative perceived importance of banking channels as rated the most important, May 2014
- Mobile banking yet to go mainstream
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- Figure 48: Frequency of mobile and online banking channel usage, by age, May 2014
- NatWest and Barclays ‘get’ Mobile Banking
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- Figure 49: Most important banking channel, by provider, May 2014
- Differences in ownership drive differences in opinion
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- Figure 50: Most important banking channel, by product ownership, May 2014
- Figure 51: Those who never use in-branch counter services, May 2014
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- Figure 52: Those who never use in-branch advice services, by product ownership, May 2014
- I want what I want, when I want it
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- Figure 53: Frequency of banking channel use, May 2014
- Differences in ownership drive differences in opinion
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- Figure 54: Most important banking channel, by product ownership, May 2014
- Figure 55: Frequency of channel use, by product type, May 2014
Attitudes towards Retail Banking
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- Key points
- Majority of consumers believe it is important to shop around
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- Figure 56: Consumer attitudes towards banking, May 2014
- Most people think banks take their customers for granted
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- Figure 57: Consumer attitudes about the concept of loyalty in retail banking, May 2014
- Aligning bank and consumer definitions of loyalty
- 69% agree that “banking is never really free”
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- Figure 58: Belief that “banking is never really free”, by age and financial situation, May 2014
- Free banking: The triumph of hope over experience?
- Attitudes towards cashback highlight the challenge faced by banks
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- Figure 59: Attitudes towards current account rewards, May 2014
- Beware of generalisations
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- Figure 60: Concern about branch closures compared with the belief that digital services are more important than branch services, by age, May 2014
Intended Use of Current Account Switch Service
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- Key points
- Irreversible inertia?
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- Figure 61: Consumer intentions to use the Current Account Switch Service, may 204
- Figure 62: Intention to switch current account provider, May 2014 compared to June 2013
- Consumers find it difficult to see the point in switching
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- Figure 63: Attitude towards banking, by attitude towards switching, May 2014
- Confusion over the differences between products acts as a barrier to competition
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- Figure 64: Likelihood to switch, by product ownership, May 2014
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- Figure 65: Potential movers, by products held with main current account provider and with alternative provider, May 2014
- Awareness of the Current Account Switch Service
- Message received, but not translated
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- Figure 66: Awareness of the Current Account Switch Service, May 2014
- Awareness varies widely across demographic groups
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- Figure 67: Awareness of the Current Account Switch Service, by age, May 2014
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- Figure 68: Proportion of each age group classed as a potential mover, May 2014
Current Account Switching – Consideration of Retail Banking Services and Features
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- Key points
- Banks face a tough decision when it comes to prioritising channels for development
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- Figure 69: Features/services appealing to potential account switchers, May 2014
- Channel hopping
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- Figure 70: Use of banking channel once a month or more, by likelihood to switch, May 2014
- Push or Pull?
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- Figure 71: Factors motivating the desire to switch among potential account switchers, May 2014
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- Figure 72: Features appealing to current account switchers, by age, May 2014
Current Account Switching – Consideration of Retail Banking Brands
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- Key points
- Most potential switchers are still looking at the industry giants
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- Figure 73: Consideration of different banking providers – potential switchers, May 2014
- Rise of the challengers
- No two are alike
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- Figure 74: Intention to switch to specific provider, by age, May 2014
- Figure 75: Intention to switch to specific provider, by age, May 2014 (continued)
Appendix – Product Ownership and Cross-sales
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- Figure 76: Product ownership and cross-sales – Savings account, by demographics, May 2014
- Figure 77: Product ownership and cross-sales – Cash ISA, by demographics, May 2014
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- Figure 78: Product ownership and cross-sales – Any stock market-based investment product, by demographics, May 2014
- Figure 79: Product ownership and cross-sales – Credit card, by demographics, May 2014
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- Figure 80: Product ownership and cross-sales – Personal loan, by demographics, May 2014
- Figure 81: Product ownership and cross-sales – Business loan, by demographics, May 2014
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- Figure 82: Product ownership and cross-sales – Mortgage, by demographics, May 2014
- Figure 83: Product ownership and cross-sales – Life insurance, by demographics, May 2014
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- Figure 84: Product ownership and cross-sales – Home insurance, by demographics, May 2014
- Figure 85: Product ownership and cross-sales – Car insurance, by demographics, May 2014
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- Figure 86: Product ownership and cross-sales – Income protection/critical illness cover, by demographics, May 2014
- Figure 87: Product ownership and cross-sales – Business bank account, by demographics, May 2014
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- Figure 88: Product ownership and cross-sales, by demographics, May 2014
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Appendix – Importance of Banking Channels
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- Figure 89: Importance of banking services – In-branch counter services, by demographics, May 2014
- Figure 90: Importance of banking services – In-branch advice services, by demographics, May 2014
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- Figure 91: Importance of banking services – Online banking, by demographics, May 2014
- Figure 92: Importance of banking services – Telephone banking, by demographics, May 2014
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- Figure 93: Importance of banking services – Mobile banking, by demographics, May 2014
- Figure 94: Frequency of use of various retail banking channels – In-branch counter services, by demographics, May 2014
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- Figure 95: Frequency of use of various retail banking channels – In-branch advice services, by demographics, May 2014
- Figure 96: Frequency of use of various retail banking channels – Online banking, by demographics, May 2014
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- Figure 97: Frequency of use of various retail banking channels – Telephone banking, by demographics, May 2014
- Figure 98: Frequency of use of various retail banking channels – Mobile banking, by demographics, May 2014
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- Figure 99: Frequency of mobile and branch banking channels, by product ownership, May 2014
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Appendix – Attitudes towards Retail Banking
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- Figure 100: Agreement with the statement ‘I don’t believe banking is ever really free’, by demographics, May 2014
- Figure 101: Agreement with the statement ‘The number of bank branches that are closing worries me’, by demographics, May 2014
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- Figure 102: Agreement with the statement ‘It is a good idea for banks to offer services in different locations’, by demographics, May 2014
- Figure 103: Agreement with the statement ‘Online/mobile services are more important to me than branch services’, by demographics, May 2014
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- Figure 104: Agreement with the statement ‘Building societies are better at rewarding loyalty than banks’, by demographics, May 2014
- Figure 105: Agreement with the statement ‘Banks take their customers for granted’, by demographics, May 2014
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- Figure 106: Agreement with the statement ‘It is important to look for the best deals on the market yourself’, by demographics, May 2014
- Figure 107: Agreement with the statement ‘I am lazy when it comes to making sure I am getting the best deals’, by demographics, May 2014
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- Figure 108: Agreement with the statement ‘Some banks are better than others at looking after their customers’, by demographics, May 2014
- Figure 109: Agreement with the statement ‘Current accounts that offer cashback and other rewards are a good idea’, by demographics, May 2014
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- Figure 110: Agreement with the statement ‘I would like to have a current account that offers cashback or other rewards’, by demographics, May 2014
- Figure 111: Agreement with the statement ‘It would be worth paying for a current account if it offered cashback/rewards on spending and purchases’, by demographics, May 2014
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- Figure 112: Positive attitudes towards banking, by provider, May 2014
- Figure 113: Attitudes towards banking, by age, May 2014
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Appendix – Intended Use of Current Account Switch Service
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- Figure 114: Consumer intentions of using the Current Account Switch Service, by demographics, May 2014
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Appendix – Awareness of the Current Account Switch Service
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- Figure 115: Consumer awareness of the Current Account Switch Service, by demographics, May 2014
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Appendix – Current Account Switching – Consideration of Retail Banking Services and Features
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- Figure 116: Most popular features/services appealing to potential account switchers, by demographics, May 2014
- Figure 117: Next most popular features/services appealing to potential account switchers, by demographics, May 2014
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Appendix – Current Account Switching – Consideration of Retail Banking Brands
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- Figure 118: Most popular consideration of switching to various retail banking brands, by demographics, May 2014
- Figure 119: Next most popular consideration of switching to various retail banking brands, by demographics, May 2014
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- Figure 120: Popular consideration of switching to various retail banking brands, by demographics, May 2014
- Figure 121: Other consideration of switching to various retail banking brands, by demographics, May 2014
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- Figure 122: Least popular consideration of switching to various retail banking brands, by demographics, May 2014
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Appendix – Market Share
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- Figure 123: Most popular main account provider, by demographics, May 2014
- Figure 124: Next most popular main account provider, by demographics, May 2014
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- Figure 125: Other main account provider, by demographics, May 2014
- Figure 126: Least popular main account provider, by demographics, May 2014
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