Table of Contents
Executive Summary
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- The market
- UK personal current account market has high and stable penetration
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- Figure 1: Estimated number of current accounts and current account holders – UK, 2015
- Increasing margins on overdraft lending
- More than 1.75 million current account switches since CASS launch
- FOS reports an upsurge in current account complaints
- Digital banks set to enter the current account market
- Banks launch ‘MiData’ current account comparison tool
- Digital banking beats all channels
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- Figure 2: Frequency of use of the following banking services, May 2015
- Key players
- Lloyds Banking Group is the largest current account provider in the UK
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- Figure 3: Current account providers, by group share of main current account market, May 2015
- Halifax and Santander are the biggest winners of CASS
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- Figure 4: Net gains of full account switches completed using CASS between Q3 2014 and Q3 2014 (1 October 2013 - 30 September 2014)
- While some providers continue offering switching incentives…
- …others have shifted towards big in-credit current account interest rates
- High-street providers look to inspire greater customer loyalty
- New student current account launches and promotion of financial education
- Increased competition from non-traditional entrants
- High street players continue to develop their digital services…
- …as well as their multi-channel capabilities
- Barclays and others look to their customers with disabilities
- The consumer
- Almost every adult in the UK has a current account
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- Figure 5: Number of current accounts owned, May 2015
- One in five adults owns a premium or packaged current account
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- Figure 6: Type of current account held, May 2015
- Only 13% of current account holders own more than one type of current account
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- Figure 7: Number of type of current accounts held, May 2015
- No fees are the most important deciding factor for consumers
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- Figure 8: Influential factors when choosing a new current account, May 2015
- Convenient branches are head-to-head with easy-to-use websites
- Current accounts which just do the basics are the desired product for the majority
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- Figure 9: Attitudes towards packaged and paid-for current accounts, May 2015
- 82% of current account holders are satisfied with their main provider…
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- Figure 10: Satisfaction with main current account providers, May 2015
- …rising to 90% among consumers with a premium or packaged current account
- Nearly half of current account holders have never switched their main provider
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- Figure 11: Current account switching activity, May 2015
- Just over 70% of current account holders are aware of the CASS
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- Figure 12: Awareness and use of the CASS, May 2015
- More than four in five CASS users are satisfied with the service
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- Figure 13: Satisfaction with CASS, May 2015
- 58% of adults would be interested in a current account comparison tool
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- Figure 14: Attitudes towards current account comparison tools, May 2015
Issues and Insights
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- Tailored packaged current accounts can better reflect consumers’ preferences
- The facts
- The implications
- Even dissatisfied customers fail to switch
- The facts
- The implications
The Market – What You Need to Know
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- UK’s personal current account market has high and stable penetration
- Increasing margins on overdraft lending
- More than 1.75 million current account switches since CASS launch
- FOS reports an upsurge in current account complaints
- Introduction of Paym pushes current account providers towards further digitalisation
- Digital banks set to enter the current account market
- Banks launch ‘MiData’ current account comparison tool
- Digital banking beats all channels
- In-branch services however, are still valued
- Decline in the UK branch network continues
Market Size
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- UK’s personal current account market has high and stable penetration
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- Figure 15: Estimated number of current accounts and current account holders – UK, 2014 and 2015
Economic Environment and Market Conditions
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- Increasing margins on overdraft lending
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- Figure 16: Monthly interest rate of UK monetary financial institutions sterling overdraft for households – Not seasonally adjusted, January 2009-April15
- More than 1.75 million current account switches since CASS launch
- FOS reports an upsurge in current account complaints
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- Figure 17: Number of new complaints about current accounts to the FOS, 2013/14-2014-15 (years ending on 31 March)
- Introduction of Paym pushes current account providers towards further digitalisation
- Digital banks set to enter the current account market
- Banks launch ‘MiData’ current account comparison tool
Channels to Market
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- Digital banking beats all channels
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- Figure 18: Frequency of use of the following banking services, May 2015
- Mobile banking has strongest potential among Millennials…
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- Figure 19: Frequency of use of the following banking services, by generation, May 2015
- …but is likely to pick up across all age groups
- In-branch services however, are still valued
- Decline in the UK branch network continues
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- Figure 20: UK retail bank and building society branch networks, 1997-2013
Key Players – What You Need to Know
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- Lloyds Banking Group is the largest current account provider in the UK
- Halifax and Santander are the biggest winners of CASS
- Packaged and premium accounts receive the greatest increase in adspend in 2014/15
- Top 10 advertisers account for over 90% of total adspend
- While some providers continue offering switching incentives….
- …others have shifted towards big in-credit current account interest rates
- High-street providers look to inspire greater customer loyalty
- New student current account launches and promotion of financial education
- Increased competition from non-traditional entrants
- High street players continue to develop their digital services…
- …as well as their multi-channel capabilities
- Barclays and others look to their customers with disabilities
Market Share
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- Lloyds Banking Group is the largest current account provider in the UK
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- Figure 21: Current account providers, by share of main and other current account market, May 2015
- Nationwide has a strong presence in the secondary market
- Halifax and Santander are the biggest winners of CASS
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- Figure 22: Net gains of full account switches completed using CASS between Q3 2014 and Q3 2014 (1 October 2013-30 September 2014)
- Current account balances are taking over from savings accounts
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- Figure 23: Big providers’ total retail savings balances, shown on a group basis – UK, 2013-14
Advertising Spend
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- Peak in advertising spend on current accounts in 2013/14
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- Figure 24: Total advertising expenditure on current accounts and other related money-transmission services, 2010/11-2014/15 (12 months ending 31 March)
- Packaged and premium accounts receive the greatest increase in adspend in 2014/15
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- Figure 25: Advertising expenditure on current accounts and other related money-transmission services, 2012/13-2014/15 (12 months to 31 March)
- Top 10 advertisers account for over 90% of total adspend
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- Figure 26: Top ten advertisers of current accounts and related money-transmission services, 2012/13-2014/15 (12 months to 31 March)
- TV dominates adspend on current accounts
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- Figure 27: Share of advertising expenditure on current accounts and related money-transmission services, by media type, 2014/15 (12 months to 31 March)
- A note on adspend
Competitive Strategies – Product Development
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- While some continue offering switching incentives….
- …others have shifted towards big in-credit current account interest rates
- High-street providers look to inspire greater customer loyalty
- Barclays: Blue Rewards
- Lloyds Bank: Club Lloyds, Everyday Offers and It’s On Us
- RBS and NatWest: Cashback Plus loyalty scheme
- New student current account launches
- Promotion of financial education among the younger customer base
- Nationwide: Nationwide Education and The Big Money Movie Pitch
- Lloyds Banking Group: Partnership with Newcastle University on digital banking innovation project
- Halifax: Student bespoke online banking service
- Santander: SmartBank, the new mobile app for students
Competitive Strategies – Non-traditional Entrants and Channel Evolution
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- Increased competition from non-traditional entrants
- High street players continue to develop their digital services…
- NatWest: Trial for new ‘life events’ mobile apps
- Halifax: Nymi Band trials
- Barclays: Twitter payments through Pingit
- Barclays: App available through AppleWatch
- Barclays: Cheque imaging service
- Lloyds Banking Group: Electronic identification
- RBS/NatWest: Fingerprint login
- …as well as their multi-channel capabilities
- TSB invests £250m in ‘bricks and clicks’
- TSB and RBS: New branch design
- RBS/NatWest: Bank holiday opening trial
- Lloyds Bank: Online appointment booking system
- Barclays: Video Banking
- Nationwide NOW
- Barclays and others look to their customers with disabilities
Brand Research
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- What you need to know
- Brand map
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- Figure 28: Attitudes towards and usage of selected brands, May 2015
- Key brand metrics
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- Figure 29: Key metrics for selected brands, May 2015
- Brand attitudes: Co-operative Bank maintains socially aware reputation
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- Figure 30: Attitudes, by brand, May 2015
- Brand personality: Santander and Virgin Money use upbeat associations to boost standout
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- Figure 31: Brand personality – Macro image, May 2015
- Negative press around HSBC creates more damaging connotations
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- Figure 32: Brand personality – Micro image, May 2015
- Brand analysis
- Nationwide and First Direct most likely to enthuse customers
- Halifax remains most used brand, while Tesco Bank shows most potential
- Virgin Money and Santander use more vibrant brand images to stand out
- HSBC joins Barclays and Co-operative Bank towards misleading and irresponsible side of the market
- NatWest, Lloyds Bank and TSB occupy centre ground
- Clydesdale Bank, Metro Bank and Yorkshire Building Society’s lower usage results in a weaker brand image
The Consumer – What You Need to Know
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- Almost every adult in the UK has a current account
- Nearly one third of consumers have multiple accounts
- One in five adults own a premium or packaged current account
- Higher earners are more likely to own premium or packaged current accounts
- No fees are the most important deciding factor for consumers
- Convenient branches are head-to-head with easy-to-use websites
- Mobile apps are considered more important by Millennials
- Financial situation influences desirable features
- Current accounts which just do the basics are the desired product for the majority
- Customisation may be the key to success
- 82% of current account holders are satisfied with their main provider…
- …rising to 90% among consumers with a premium or packaged current account
- Nationwide and Santander customers are the most satisfied with their provider
- More than three fifths do not distinguish between current account providers
- Nearly half of current account holders have never switched their main provider
- Multiple account holders and paid-for current account holders are more likely to have switched
- Majority of current account holders do not consider one-off cash incentives as being worthwhile
- Just over 70% of current account holders are aware of the CASS
- More than four in five CASS users are satisfied with the service
- 58% of adults would be interested in a current account comparison tool…
- …but only just over one quarter would be happy to share their personal data for personalised information on deals
Current Account Ownership
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- Almost every adult in the UK has a current account
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- Figure 33: Number of current accounts owned, May 2015
- Nearly one third of consumers have multiple accounts
- Higher earners are more likely to have multiple current accounts
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- Figure 34: Number of current accounts held, by gross annual household income, May 2015
Ownership by Type of Current Account
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- One in five adults owns a premium or packaged current account
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- Figure 35: Type of current account held, May 2014 and 2015
- Only 13% of current account holders own more than one type of current account
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- Figure 36: Number of type of current accounts held, May 2015
- Figure 37: Type of current account held, by number of types owned, May 2015
- Higher earners are more likely to own premium or packaged current accounts
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- Figure 38: Type of current account held, by gross annual household income, May 2015
- Premium or packaged current account holders are more likely to be Santander customers
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- Figure 39: Main current account provider, by type of current account owned, May 2015
Influential Factors when Choosing a Current Account
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- No fees are the most important deciding factor for consumers
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- Figure 40: Influential factors when choosing a new current account, by rank, May 2015
- Convenient branches are head-to-head with easy-to-use websites
- Mobile apps are considered more important by Millennials
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- Figure 41: Any response to ‘Easy-to-use mobile app’, by age, May 2015
- Financial situation influences desirable features
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- Figure 42: Influential factors when choosing a new current account, by current financial situation, May 2015
Attitudes towards Paid-for Packaged Current Accounts
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- Nearly three quarters of consumers are not prepared to pay for a current account
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- Figure 43: Attitudes towards packaged and paid-for current accounts, May 2015
- Current accounts which just do the basics are the desired product for the majority
- Customisation may be the key to success
- Just under two thirds of current account holders find additional offers irrelevant to them
Satisfaction with Current Account Providers
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- 82% of current account holders are satisfied with their main provider…
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- Figure 44: Satisfaction with main current account providers, May 2015
- …rising to 90% among consumers with a premium or packaged current account
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- Figure 45: Satisfaction with main current account provider, by main current account type owned, May 2015
- Nationwide and Santander customers are the most satisfied with their provider
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- Figure 46: Satisfaction with main current account provider, by main current account provider, May 2015
- More than three fifths do not distinguish between current account providers
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- Figure 47: Attitudes towards current account providers, May 2015
Current Account Switching Activity
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- Nearly half of current account holders have never switched their main provider
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- Figure 48: Current account switching activity, May 2015
- Multiple account holders are more likely to have switched…
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- Figure 49: Current account switching activity, by number of current accounts held, May 2015
- …as are paid-for premium or packaged current account holders
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- Figure 50: Current account switching activity, by current account ownership, May 2015
- Santander, Nationwide and Halifax customers are more likely to have switched
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- Figure 51: Current account switching activity, by main current account provider, May 2015
- Majority of current account holders do not consider one-off cash incentives as being worthwhile
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- Figure 52: Attitudes towards introductory cash incentives, May 2015
Awareness and Use of the CASS
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- Just over 70% of current account holders are aware of the CASS
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- Figure 53: Awareness and use of the CASS, May 2015
- Awareness is greater among the older age groups
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- Figure 54: Awareness and use of the CASS, by age, May 2015
- Higher earners more likely to have used CASS
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- Figure 55: ‘I had heard of this service before today, and I have already used it’, by gross annual household income, May 2015
Satisfaction with CASS
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- More than four in five CASS users are satisfied with the service
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- Figure 56: Satisfaction with CASS, May 2015
Attitudes towards Current Account Comparison Tools
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- 58% of adults would be interested in a current account comparison tool…
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- Figure 57: Attitudes towards current account comparison tools, May 2015
- …but only just over one quarter would be happy to share their personal data for personalised information on deals
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- Figure 58: Attitudes towards current account comparison tools and deals, by generation, May 2015
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