Table of Contents
Introduction and Abbreviations
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- Fierce competition characterises the market
- Scope of the report
- Definitions
- Global information and research
- Consumer research
- ACORN
- Abbreviations
Executive Summary
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- Demand driven by population growth and economic activity
- The current account is still tied to the branch network
- Number of current accounts estimated at 72 million in 2004
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- Illustration of the estimated number of current accounts, 1998-2004
- Consumer research estimates indicate Lloyds TSB, RBS and Barclays have largest market shares
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- Illustration of estimated market shares of current account providers, 2003
- Growth in number of packaged accounts
- Telephone and Internet banking are coming more to the fore
- Most adult consumers have a current account
- An interest-free overdraft is most important decision factor
- 5 million consumers are thinking about changing provider
- Rates are becoming more important
Market Factors
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- Population growth among the over-45s
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- Population growth, by age group, 2001-25
- There will be nearly 29 million people in employment by 2007
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- Number of employees, self-employed workers and total workforce, 1997-2007
- Increased PDI/consumer expenditure per capita should stimulate banking activity
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- Illustration of PDI and consumer expenditure per capita, at constant 1998 prices, 1998-2007
- Switching accounts is now easier
The Branch Network
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- People are still concerned about the physical location of the branch
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- Reasons for choosing current account provider, August 2003
- MBBG have closed nearly 3,000 branches since 1995
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- UK bank and building society branch networks, 1995 and 2002
- HSBC has the fewest customers per branch of the main five players
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- Average current account holders per branch, largest seven banks, 2003
- RBS and HSBC operate the busiest ATMs
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- Number of bank ATMs and volume of transactions, 2002
Market Size
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- The value of interest-bearing sight accounts increased significantly in 2002
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- Value of UK personal bank accounts (MBBG only), 1997-2002
- There were nearly 90 million interest-bearing sight accounts in 2002
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- Volume of UK personal bank accounts (MBBG only), 1997-2002
- There were an estimated 71 million current accounts in use in 2003
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- Estimated volume of current accounts, 1998-2003
- Rising overdrafts are part of the credit boom
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- Value of overdraft advances (Sterling) to individuals and individual trusts, 1997-2002
- Plastic card market expands as current account offering changes
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- Number of plastic cards in issue, by type, 1993-2002
- Remote ATMs grow rapidly in number
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- Number of ATMs (MBBG only), by location, 1997-2002
- ATMs are now central to account usage
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- Availability of ATM facitilities, by feature, 1993 and 2002
The Key Players
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- Quiet period ensues after a major spell of activity
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- Major developments in retail banking, 1997-2001
- MBBGs account for 90% of the current account market
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- Composition of the MBBGs (offering current accounts), 2003
- Smaller players and specialists make up the remainder of the sector
- Lloyds TSB has a slightly higher market share than the RBS Group and Barclays
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- Estimated market shares of current account providers, 2000 and 2003
- Company profiles
- Lloyds TSB
- RBS/NatWest
- Barclays Group
- HSBC
- HBOS
- Abbey
Product Development
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- Most basic current accounts offer the same features
- The battle on price heats up
- Packaged current accounts are a way of trying to up-sell to existing customers
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- Proportion of fee-based and non-fee-based packaged/premium accounts, 2003
- Fee-based accounts generate £650 million in terms of revenue
- The Universal Bank gets off to a slow start
Distribution
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- Telephone and Internet banking continue to grow in popularity
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- Proportion of personal bank accounts accessible by telephone and via the Internet (MBBG only), 1998-2003
- Online banking is now firmly established
- The number of Internet banking transactions increases rapidly
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- Direct banking – number of transactions (MBBG only), by delivery channel, 2001 and 2002
- Cross-selling is central to gaining a greater share of current account market
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- Products arranged via main bank, by gender, August 2003
- Lloyds TSB leads the way in cross-selling
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- Products arranged via main bank, by provider, August 2003
Advertising and Promotion
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- Above-the-line advertising expenditure on financial services, by product sector, years to September 2002 and September 2003
- Current account advertising expenditure, by outlet type, year to September 2003
- Top ten advertisers of current accounts, 2001/02 and 2002/03
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The Consumer
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- Proportion of respondents with a current account, by gender, age, socio-economic group and region, November 2003
- Where respondents hold their main current account, November 2003
- Current account provider, by gender, age and socio-economic group, November 2003
- Current account provider, by marital status, lifestage and Mintel’s Special Groups, November 2003
- Current account provider, by working status, gross annual household income and tenure, November 2003
- Scottish consumers stay with their traditional banks
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- Current account provider, by TV region and ACORN categories, November 2003
- Broadsheet readers more likely to be RBS/NatWest or HSBC customers
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- Current account provider, by newspaper readership, new technology users, commercial TV viewing and supermarket usage, November 2003
- Credit facilities are of primary importance to consumers
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- Top factors which influence people’s decisions to open a current account, November 2003
- Interest-free overdraft appeals to the under-35s
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- Top factors which influence people’s decisions to open a current account, by gender, age and socio-economic group, November 2003
- Tesco/M&S shoppers look to reputation of provider
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- Top factors which influence people’s decisions to open a current account, by newspaper readership, new technology users, commercial TV viewing and supermarket usage, November 2003
- Over 5 million customers thinking of changing provider
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- When respondents last changed provider, by gender, November 2003
- 25-34-year-olds are considering switching
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- When respondents last changed provider, by gender, age and socio-economic group, November 2003
- Barclays' customers appear the most loyal
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- When respondents last changed provider, by current bank, November 2003
- Move to a rate-driven market may be apparent
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- Top reasons why customers would change their current account provider, November 2003
- ABs and 35-54-year-olds look for better interest rates
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- Top reasons why customers would change their current account provider, by gender, age and socio-economic group, November 2003
- Profiles of those who have switched...
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- Profiles of recent and potential switchers, by demographic sub-group and lifestage, November 2003
- ...and those thinking about it
- Typologies identify key targets for ‘switch’ business
- Typology 1 – Interested (13% of current account holders)
- Typology 2 – Dissatisfied (13% of current account holders)
- Typology 3 – Convenience Bankers (17% of current account holders)
- Typology 4 – Non-switchers (53% of current account holders)
- Typology 5 – Service Seekers (5% of current account holders)
- Penetration of typologies
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- Five typologies detailing why customers would change their current account provider, by gender, age, socio-economic group and region, November 2003
- Typologies by length of time with current account provider
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- When respondents last changed provider, by typologies, November 2003
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The Future
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- Consumer research findings offer hope for smaller providers
- Rate-driven sector is developing
- Packaged accounts will help increase retail banking revenues
- Telephone and Internet banking are likely to increase in popularity
- Competition looks set to increase and consumers will seek best 'fit'
Forecast
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- Forecast of the value of UK personal bank accounts (MBBG only), 2003-07
- There will be 74 million current accounts in 2007
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- Forecast of the volume of current accounts, 2003-07
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