Table of Contents
Overview
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- What you need to know
Executive Summary
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- The market
- Open Banking will lead to improved services
- Consumer borrowing continues to grow
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- Figure 1: Gross consumer credit and mortgage lending, 2009-15
- Companies and brands
- Barclays is the largest individual provider of current accounts
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- Figure 2: Main banking groups, by aggregated share of main current account market, July 2016
- Branch closures continue
- Adspend grows by 8% in 2016
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- Figure 3: Top 15 highest spenders for recorded above-the-line, online display and direct mail advertising expenditure on retail banking, 2014-16*
- The consumer
- Savings accounts are second most widely owned financial services product
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- Figure 4: Financial product ownership and cross-sales, July 2016
- 72% interested in a more personalised service
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- Figure 5: Interest in personalised banking services, July 2016
- Majority are satisfied with their bank
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- Figure 6: Overall satisfaction with main banking provider, July 2016
- Online banking can only partially meet consumer needs
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- Figure 7: Attitudes towards retail banking services, July 2016
- What we think
Issues and Insights
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- Cross-selling in retail banking driven by customer inertia
- The facts
- The implications
- Providers will need to find the right balance with personalised services
- The facts
- The implications
- Lack of interest in switching will hinder use of Open Banking
- The facts
- The implications
The Market – What You Need to Know
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- Open Banking will lead to improved services
- Low interest rates continue to disengage savers
- Borrower confidence boosted by rate cut
Market Overview
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- CMA announces package of reforms to increase competition
- Technology and transparency underpin measures to improve competition
- Number of CASS users continues to grow
- Consumer borrowing continues to grow
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- Figure 8: Gross consumer credit and mortgage lending, 2009-15
- Low interest rates continue to disengage savers
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- Figure 9: Savings account interest rates, January 2011-July 2016
- Mortgage and loan customers look forward to longer period of low rates
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- Figure 10: Consumer credit interest rates, January 2011-July 2016
Companies and Brands – What You Need to Know
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- Barclays is the largest individual provider of current accounts
- Branch closures continue
- Adspend grows by 8% in 2016
Market Share
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- Barclays is the largest individual provider of current accounts
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- Figure 11: Current account providers, by share of main and other current account market, July 2016
- Lloyds Banking Group is biggest overall provider
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- Figure 12: Top 6 main current account providers, by aggregated share of main current account market, July 2016
- Challengers pose a threat to future market share?
Company Strategies
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- Branch closures continue
- Lloyds Banking Group
- RBS
- Metro Bank and Nationwide remain committed
- Embracing technology to transform consumer experiences
- Barclays
- Santander
- Mobile-only banks make soft launch
- Focusing on customer satisfaction
- Nationwide
- First Direct
Brand Communication and Promotion
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- Lloyds Bank is the biggest spender on retail banking advertising
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- Figure 13: Top 15 highest spenders for recorded above-the-line, online display and direct mail advertising expenditure on retail banking, 2014-16*
- TV claims ever-increasing share of adspend…
- …but digital spend is increasing
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- Figure 14: Recorded above-the-line, online display and direct mail advertising expenditure on retail banking, by media type, 2014-16
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Savings accounts are the most widely cross-sold products
- Majority are interested in personalised services
- Four in five are satisfied with their provider…
- …with the helpfulness of staff being a key driver
- Online banking can only partially meet consumer needs
Product Ownership and Cross-sales
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- Majority have one current account
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- Figure 15: Current account ownership, July 2016
- Savings accounts are second most widely owned product
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- Figure 16: Financial product ownership and cross-sales, July 2016
- Customers are less loyal when it comes to credit cards
- People more likely to look elsewhere for insurance
- Banks face further cross-selling challenges
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- Figure 17: Repertoire of financial products, July 2016
- Barclays, Halifax and Nationwide are best at cross-selling
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- Figure 18: Repertoire of financial products with main provider, by selected providers, July 2016
Interest in Personalised Banking Services
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- 72% interested in a more personalised service
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- Figure 19: Interest in personalised banking services, July 2016
- Generational differences highlight higher expectations among younger consumers
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- Figure 20: Interest in personalised banking services, by age, July 2016
Overall Satisfaction with Main Provider
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- Four in five are satisfied with their provider
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- Figure 21: Overall satisfaction with main banking provider, July 2016
- Nationwide has highest levels of customer satisfaction
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- Figure 22: Overall satisfaction with main banking provider, July 2016
Satisfaction with Retail Banking Services
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- Consumers most satisfied with helpfulness of staff
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- Figure 23: Satisfaction with retail banking services, July 2016
- Rewarding loyalty pays off
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- Figure 24: Satisfaction with rewards for loyalty, by number of financial products with main current account provider, July 2016
- Nationwide stands out for the helpfulness of its staff
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- Figure 25: Satisfaction with retail banking services, by main current account provider, July 2016
- Staff are key to overall satisfaction
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- Figure 26: Key drivers of overall satisfaction with main current account provider, July 2016
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- Figure 27: Overall satisfaction with main current account provider – Key driver output, July 2016
Attitudes towards Retail Banking Services
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- Online banking can only partially meet consumer needs
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- Figure 28: Attitudes towards retail banking services, July 2016
- Cross-selling opportunities greatest among 16-34-year-olds
- Online-only banks pose a significant threat
- The reality of an online-only bank is less attractive as finances become more complex
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- Figure 29: Consideration of banks that only offer online and mobile services, by age, July 2016
- Only one in 10 happy to share their account transaction data
- Attitudes towards Midata show barriers and appetite for Open Banking
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Banking Channels – Frequency of Use
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- Figure 30: Frequency of banking services use, July 2016
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