Table of Contents
Overview
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- What you need to know
- Products covered in this report
Executive Summary
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- The market
- Number of current accounts rises by 2.1%
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- Figure 1: Estimated number of current accounts, 2014-17
- Latest switching figures suggest a slowdown
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- Figure 2: Number of switches per month since launch of CASS, September 2013-May 2017
- ‘Making banks work harder for you’
- Companies and brands
- Lloyds Banking Group has largest share of the market
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- Figure 3: Current account providers (banking groups), by share of main and other current account market, May 2017
- Challengers lead the way in increasing transparency around overdrafts
- Advertising spend falls by 35%
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- Figure 4: Total above-the line, online display and direct mail advertising expenditure on current accounts and other related money-transmission services, 2012/13-2016/17
- Nationwide continues to be seen as most trusted brand
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- Figure 5: Attitudes towards and usage of selected brands, May 2017
- The consumer
- Most hold a standard current account
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- Figure 6: Type of current account held, May 2017
- Fee changes most likely to prompt people to review their arrangements
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- Figure 7: Prompts to review current account arrangements, May 2017
- One in four uses their overdraft regularly
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- Figure 8: Agreement with the statement ‘I use a current account overdraft regularly (ie each month)’, May 2017
- Convenience drives cross-selling among current account holders
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- Figure 9: Attitudes towards your main current account provider, May 2017
- Main banking relationships likely to remain intact with Open Banking
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- Figure 10: Willingness towards sharing financial data with different providers, May 2017
- What we think
Issues and Insights
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- Changes to current account terms prompt people to review their arrangements
- The facts
- The implications
- Consumers most likely to share data with their main bank
- The facts
- The implications
- Open Banking will put pressure on providers to offer competitive overdraft charges
- The facts
- The implications
The Market – What You Need to Know
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- Number of current accounts rises by 2.1%
- Online banking is the most frequently used banking channel
- Latest switching figures suggest a slowdown
- ‘Making banks work harder for you’
Market Size
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- Current account market grows with population
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- Figure 11: Estimated number of current accounts, 2014-17
Channels to Market
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- Online banking is the most frequently used banking channel
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- Figure 12: Use of different retail banking channels, July 2016
- Branches remain important despite declining regular use
- Online banking has increased customer engagement
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- Figure 13: Number of customer instructions for personal banking, 2001-16
Market Drivers
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- UK population continues to rise
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- Figure 14: United Kingdom population mid-year estimate, 2008-16
- Latest switching figures suggest a slowdown
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- Figure 15: Number of switches per month since launch of CASS, September 2013-May 2017
- Overdraft rates continue to rise despite base rate remaining at record low
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- Figure 16: Monthly interest rate of UK monetary financial institutions sterling overdraft for households – Not seasonally adjusted, January 2012-April 2017
- Current account complaints fall by 35%
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- Figure 17: Number of new complaints about current accounts to the FOS, 2013/14-2016/17
Regulatory and Legislative Changes
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- ‘Making banks work harder for you’
- Open Banking
- Service quality statistics
- Account-related ‘prompts’
- Unarranged overdraft charges
- CMA measures build on PSD2
- Payment Account Regulations take effect
- Bacs Direct Debit consultation
- New package account rules raise standards
Companies and Brands – What You Need to Know
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- Lloyds Banking Group has largest share of the market
- Challengers lead the way in increasing transparency around overdrafts
- Advertising spend falls by 35%
- Nationwide continues to be seen as the most trusted brand
Market Share
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- Lloyds Banking Group has largest share of the market
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- Figure 18: Current account providers (banking groups), by share of main and other current account market, May 2017
- Barclays is the biggest individual provider
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- Figure 19: Current account providers, by share of main and other current account market, May 2017
- Santander sees switching numbers drop significantly
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- Figure 20: Net gains of full account switches completed using CASS between 2015 and 2016.
Competitive Strategies
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- Competitive context
- Responding to regulatory changes
- Increasing transparency around overdrafts…
- …with entrants taking a different approach
- Reacting to the market environment
- Cutting rewards and benefits...
- …but challengers buck the trend
- Switching deals remain prominent among challengers
- The competitive environment
- Partnering with fintechs
- Demand for personalisation drives niche market propositions
- Ethical banking
- Students remain a key target market
- Money management
- Open Banking clouds the future for Atom Bank
- Recent and pending launches
Advertising and Marketing Activity
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- Spend falls by 35%
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- Figure 21: Total above-the-line, online display and direct mail advertising expenditure on current accounts and other related money-transmission services, 2012/13-2016/17
- Nationwide maintains spending levels despite widespread cuts
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- Figure 22: Top ten advertisers of current accounts and related money-transmission services, 2014/15-2016/17
- Added-value accounts see biggest fall in advertising
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- Figure 23: Advertising expenditure on current accounts and other related money-transmission services, 2014/15-2016/17
- TV advertising accounts for three fifths of all spend
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- Figure 24: Share of advertising expenditure on current accounts and related money-transmission services, by media type, 2016/17 (12 months to 30 April)
- Nielsen Ad Intel coverage
Brand Research
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- What you need to know
- Brand map
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- Figure 25: Attitudes towards and usage of selected banking brands, May 2017
- Key brand metrics
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- Figure 26: Key metrics for selected banking brands, May 2017
- Brand attitudes: Metro Bank seen as offering something different
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- Figure 27: Attitudes, by brand, May 2017
- Brand personality: Co-op struggling despite ethical association
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- Figure 28: Brand personality – Macro image, May 2017
- HSBC seen as irresponsible and only caring about profits
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- Figure 29: Brand personality – Micro image, May 2017
- Brand analysis
- High-street banks are seen as accessible and reassuring
- Nationwide wins on service
- Metro Bank and First Direct stand out as being progressive
- Tesco brand bounces back from cyber attack
- Co-operative bank is becoming tired
The Consumer – What You Need to Know
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- Most hold a standard current account
- Fee changes most likely to prompt people to review their arrangements
- One in four uses their overdraft regularly
- Main banking relationships likely to remain intact with Open Banking
Current Account Ownership
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- Majority own a single current account
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- Figure 30: Number of current accounts owned, 2013-17
- A quarter have a joint account
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- Figure 31: Current accounts held jointly with someone else, May 2017
Ownership by Type of Current Account
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- Most hold a standard current account
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- Figure 32: Type of current account held, May 2017
- Reward accounts grow in popularity
- Equal split between packaged and reward accounts
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- Figure 33: Types of fee-paying/paid for account, May 2017
Prompts to Review Current Account Arrangements
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- Loyalty means people are likely to forgive account changes
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- Figure 34: Prompts to review current account arrangements, May 2017
- Fee changes most likely to prompt people to review their arrangements
- Less sensitivity to changes in rewards or discounts
- Multiple account holders more sensitive to changes
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- Figure 35: Prompts to review current account arrangements, by number of current accounts, May 2017
- Young men are prime targets for current account advertising
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- Figure 36: Prompts to review current account arrangements – ‘Seeing an advert for a more competitive product’, by age and gender, May 2017
- Nearly a third would be prompted by three or more reasons
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- Figure 37: Repertoire of prompts to review current account arrangements, May 2017
Use of and Attitudes towards Overdrafts
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- One in four uses their overdraft regularly
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- Figure 38: Agreement with the statement ‘I use a current account overdraft regularly (ie each month)’, May 2017
- Overdraft usage varies by provider
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- Figure 39: Agreement with the statement ‘I use a current account overdraft regularly (ie each month)’, by main current account provider, May 2017
- 71% know their current account overdraft charges
- Four in five users think competitive charges are important
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- Figure 40: Usage and attitudes towards current accounts, May 2017
Attitudes towards Main Banking Relationship
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- Convenience drives cross-selling among current account holders
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- Figure 41: Attitudes towards your main current account provider, May 2017
- Two-thirds trust their bank over others
- Difficulty finding suitable products mean people turn to their bank
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- Figure 42: Agreement with the statement – ‘I find it difficult to work out which banking products are most suitable for my needs’, by age, May 2017
- Younger parents more likely to go straight to their main bank
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- Figure 43: Attitudes towards current accounts – CHAID – Tree output, May 2017
- Nationwide and HSBC customers are most likely to turn to their bank as first port of call
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- Figure 44: Attitudes towards your main current account provider – All answering ‘Yes’, by main current account provider, May 2017
Attitudes towards Data-sharing
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- Three in four are happy to share their data with their main bank…
- … but one in five is concerned
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- Figure 45: Willingness towards sharing financial data with different providers, May 2017
- New banks less trusted than other banks
- PCWs best placed for data-sharing
- Millennials equally likely to share with a tech firm as a new bank
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- Figure 46: Willingness towards sharing financial data with different providers, May 2017
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- CHAID Methodology
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