Table of Contents
Executive Summary
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- The market
- Number of current accounts continues to grow
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- Figure 1: Estimated number of current accounts and account holders, 2016-19
- 58% apply or switch online
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- Figure 2: Current account purchase channels, March 2019
- Almost 1 million switches completed in 2018/19
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- Figure 3: Number of switches per month using the CASS, October 2013-May 2019
- ‘Dysfunctional’ overdraft market to be overhauled
- Official bank service league ranking launched
- Companies and brands
- Barclays is the largest individual provider of main current accounts
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- Figure 4: Current account providers, by share of main and other current accounts, May 2019
- Nationwide continues to gain customers through the CASS
- LBG adds extra functionality to its apps
- NatWest takes the lead in tech innovations
- CYBG starts rebranding to Virgin Money
- Monzo Plus: testing the waters
- Starling Bank: new accounts, features and partners
- The consumer
- 34% of people have more than one current account
- 17% pay for their banking
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- Figure 5: Type of current account owned, May 2019
- Majority could be persuaded to pay for their banking
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- Figure 6: Reasons to pay for a current account, May 2019
- People like to compartmentalise their banking
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- Figure 7: Reasons for owning more than one current account, May 2019
- Regular overdraft users more interested in innovative features
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- Figure 8: Attitudes towards overdrafts, May 2019
- 58% of account holders use mobile banking regularly
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- Figure 9: Regular usage of mobile banking, May 2019
- 60% are open to increasing their use of mobile banking
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- Figure 10: Reasons to increase usage of mobile banking, May 2019
- Younger generations want banks to play an active role
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- Figure 11: Attitudes towards current accounts and retail banking, May 2019
- What we think
Issues and Insights
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- Multi-banking only likely to increase further
- The facts
- The implications
- Opportunity for a provider to offer a meaningfully better deal
- The facts
- The implications
The Market – What You Need to Know
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- Number of current accounts continues to grow
- 58% apply or switch online
- Almost 1 million switches completed in 2018/19
- ‘Dysfunctional’ overdraft market to be overhauled
- Official bank service league ranking launched
Market Size
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- Number of current accounts continues to grow
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- Figure 12: Estimated number of current accounts, 2016-19
Channels to Market
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- Price comparison sites are the first step…
- …but the provider’s own channels eventually take precedence
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- Figure 13: Current account research channels, March 2019
- 58% apply or switch online
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- Figure 14: Current account purchase channels, March 2019
Market Drivers
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- UK population surpasses 66.4 million
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- Figure 15: United Kingdom population mid-year estimate, 2001-18
- Almost 1 million switches completed in 2018/19
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- Figure 16: Number of switches per month using the CASS, October 2013-May 2019
- Overdraft rates fall in 2019
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- Figure 17: Monthly interest rate of UK monetary financial institutions Sterling overdraft for households, May 2014-May 2019
- Current account interest rates remain low
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- Figure 18: Monthly average of UK resident banks' Sterling weighted average interest rate – interest-bearing current account deposits from individuals and individual trusts, April 2016-April 2019
Regulatory and Legislative Changes
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- ‘Dysfunctional’ overdraft market to be overhauled
- Open Banking: regulation and compliance
- Official bank service league ranking launched
- Mandated and voluntary information of current account services
- New voluntary code to protect victims of fraud
- PPI deadline looms
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- Figure 19: FCA’s ad on London Underground, June 2019
Companies and Brands – What You Need to Know
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- Barclays is the largest individual provider of main current accounts
- Nationwide continues to gain customers through the CASS
- LBG adds extra functionality to its apps
- NatWest takes the tech lead
- CYBG starts rebranding to Virgin Money
- Monzo Plus: testing the waters
- Starling Bank: new accounts, features and partners
- ATL adspend falls by 49%
Market Share
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- Barclays is the largest individual provider of main current accounts
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- Figure 20: Current account providers, by share of main and other current accounts, May 2019
- Amongst the multi-banked:
- App-only brands are more common
- Competitive offers show their double edge
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- Figure 21: Current account providers, by share of other current accounts, May 2019
- LBG, the largest group, provides one in four main accounts
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- Figure 22: Current account providers (banking groups), by share of main current account market, May 2018 and May 2019
Switching Activity
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- Nationwide continues to gain customers through the CASS
- Challengers show impressive gains
- TSB sees heavy losses
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- Figure 23: Net gains and losses of full account switches using CASS, selected brands, Q4 2018
Competitive Strategies & Launch Activity
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- LBG adds extra functionality to its apps
- NatWest & Tech: taking the lead among the large banks?
- Barclays increases the fee for its Blue Rewards
- TSB cuts down its interest rates on balances
- CYBG starts rebranding to Virgin Money
- Post Office Money closes its current account
Challengers & Disruption
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- Monzo
- Monzo Plus: testing the waters
- Monzo’s marketplace: expanding into savings
- First major ad campaign
- Starling Bank
- New features: overdrafts and loans
- New products: joint, teen and euro accounts
- New partners
- Dozens: new current account provider
- Monese launches current account linked with Avios in ‘world’s first’
- Current accounts in the FCA’s regulatory sandbox
- FinecoBank offers access to global currency platform
- Beyond current accounts
Advertising and Marketing Activity
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- ATL adspend falls by 49%
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- Figure 24: Total above-the-line, online display and direct mail advertising expenditure on current accounts, 2014/15-2018/19
- Majority of adspend on brand building
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- Figure 25: Advertising expenditure on current accounts, by category, 2014/15-2018/19
- Nationwide remains the top advertiser
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- Figure 26: Top 10 advertisers of current accounts, 2016/17-2018/19
- TV advertising accounts for 83% all spend
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- Figure 27: Advertising expenditure on current accounts, by media type, 2018/19
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- 34% of people have more than one current account
- 17% pay for their banking
- Majority could be persuaded to pay for their banking
- People like to compartmentalise their banking
- Regular overdraft users more interested in innovative features
- 58% of account holders use mobile banking regularly
- Younger generations want banks to play an active role
Current Account Ownership
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- Account ownership is almost universal among online population
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- Figure 28: Current account ownership, May 2019
- 34% have more than one current account
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- Figure 29: Multiple current account ownership, 2014-19
- 29% have a joint account
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- Figure 30: Joint account ownership, May 2019
Ownership by Type of Current Account
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- 71% of account holders own a standard account
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- Figure 31: Type of current account owned, May 2019
- 17% pay for their banking
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- Figure 32: Ownership of fee-paying current accounts, by age, May 2019
Reasons to Pay for a Current Account
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- Majority could be persuaded to pay for their banking
- People prefer easy-to-access benefits
- Loyalty schemes sound appealing
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- Figure 33: Reasons to pay for a current account, May 2019
- There’s room for competition
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- Figure 34: Repertoire of reasons to pay for a current account, May 2019
- Overseas benefits may not be enough
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- Figure 35: Monzo’s ad on the London Underground, May 2019
Reasons for Owning More Than One Current Account
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- People like to compartmentalise their banking…
- …and benefit from a competitive market
- Extra current accounts are also a backup
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- Figure 36: Reasons for owning more than one current account, May 2019
- Younger consumers more likely to make the most of it
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- Figure 37: Repertoire of reasons for owning more than one current account, by age, May 2019
Usage of and Attitudes towards Overdrafts
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- One in four account holders use their overdraft
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- Figure 38: Access to and usage of overdrafts, May 2019
- Vast majority would like to have a free buffer
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- Figure 39: Attitudes towards overdrafts, May 2019
- Turning an overdraft into a loan is appealing to regular users
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- Figure 40: Interest in loan option for overdrafts, by overdraft access and usage, May 2019
- Taking back control (of overdraft limits)
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- Figure 41: Current Accounts – CHAID – Tree output, May 2019
Mobile Banking: Usage and Motivators
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- 58% of account holders use mobile banking regularly
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- Figure 42: Regular usage of mobile banking, by age, May 2019
- 60% are open to increasing their usage
- Seamless online and mobile banking
- Simple features can help people feel in control
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- Figure 43: Reasons to increase usage of mobile banking, by current usage, May 2019
- Simplicity and getting the basics right are key
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- Figure 44: TURF Analysis – mobile banking motivators, May 2019
- Small improvements can have an impact
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- Figure 45: Repertoire of motivators to increase use of mobile banking, May 2019
Attitudes towards Current Accounts and Retail Banking
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- Younger generations want banks to play an active role…
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- Figure 46: Interest in money management help from banks, by age, May 2019
- …while older generations are more sceptical…
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- Figure 47: Interest in spending controls on transactions, by age, May 2019
- …and less open to biometric debit cards
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- Figure 48: Interest in biometric debit cards, by age, May 2019
- Response to IT failures needs to be decisive
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- Figure 49: Account holders who have been affected by an IT failure at their bank, by age, May 2019
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- CHAID analysis methodology
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- Figure 50: Current Accounts CHAID analysis – Table output, Attitudes towards overdrafts, May 2019
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- Figure 51: Current Accounts CHAID analysis – Table output, Attitudes towards current accounts and retail banking, May 2019
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- Figure 52: Current Accounts CHAID analysis – Table output, reasons to increase usage of mobile banking, May 2019
- TURF analysis methodology
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- Figure 53: TURF analysis – table output, May 2019
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