What you need to know

Consumer behaviour is changing when it comes to managing finances. More people are using multiple current accounts to help make the most of their money, which in turn is having a knock-on effect on how people are switching between bank accounts. The majority do not plan on switching or opening a new account in the future, however among those who do, the most popular option is to open an account alongside their main account.

Established providers still hold the advantage when it comes to people’s main account. However smaller brands and online or app-only banks are becoming increasingly popular among multi-account holders and are altering people’s perception around what they should expect from their current account provider.

This Report examines the current account market environment, and the major factors which are influencing switching activity. It considers the brand strategies when it comes to attracting new customers, and the estimated market share of the current account market. Mintel’s exclusive research looks into current account ownership and switching activity. It then moves onto expectations of future switching activity and behaviours, as well as general attitudes toward current accounts and account switching.

Products covered in this Report

The focus of this Report is retail current accounts, including packaged accounts for mass-market customers. The Report does not cover premium or private bank accounts targeted at the mass affluent to high-net-worth customers.

The predominant type of pricing model for current accounts in the UK is the free-if-in-credit (or ‘free banking’) model. This is where the customer does not pay any direct fees for having the account if in credit, or for core services such as direct debits and cheques. Interest is usually charged on any money borrowed via an overdraft, which can be either ‘authorised’ or ‘unauthorised’.

Current accounts can be classified into various sub-types:

Basic current account– designed for those with a low credit score, it does not carry any charges. Customers can set up direct debits and are provided with a debit card, but the account typically does not come with an overdraft facility or in-credit interest.

Standard current account– based on the free-if-in-credit model, it does not carry any charges provided there are sufficient funds in the account to meet any payments made.

Student and graduate current accounts– variants of the free-if-in-credit model and may offer special features, such as an interest-free overdraft.

Premium or packaged current account– usually involves the customer being charged a monthly fee in return for a range of additional benefits, such as travel insurance and motor breakdown cover.

Reward current account– usually offers a cash bonus or reward upon switching and offers cash rewards for paying in a set amount of money each month or for paying utility bills with the account.

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