Table of Contents
Executive Summary
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- The market
- Multi-account holders on the rise
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- Figure 1: Estimated number of current accounts, 2016-19
- Branches decline by over a third since 2015
- Current account interest rates decline
- Fewer than one million switches via the CASS in 2019
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- Figure 2: Number of switches per month using the CASS, October 2013-July 2019
- Regulators focus on improving transparency
- Companies and brands
- Barclays is the biggest individual provider in the current account market
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- Figure 3: Current account providers, by share of main accounts, August 2019
- Online or app-only banks appeal to those with more than two accounts
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- Figure 4: Current account providers, by share of other current accounts, May 2019
- High street banks launch digital solutions aimed at specific customers
- The consumer
- Over a third own more than one current account
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- : Figure 5: Current account ownership, August 2019 vs May 2016
- Just under 50% have not switched or opened an account in the last five years
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- Figure 6: Current account switching/account opening activity, August 2019
- Multi-account holders are switching, or opening a new account elsewhere
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- Figure 7: Current account switching/account opening behaviour among multi-account holders, August 2019
- 28% are planning to switch or open a new account in the next 12 months
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- Figure 8: Likelihood to switch/open new current account in the next 12 months, August 2019
- Over 60% plan on retaining use of their main current account
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- Figure 9: Future current account switching/account opening behaviours, August 2019
- Definite switchers prioritise high street brands
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- Figure 10: Likelihood to switch to different types of provider, by Likelihood to switch/open new current account in the next 12 months, August 2019
- 30% do not see the importance of branch services
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- Figure 11: Attitudes towards current accounts and current account switching, August 2019
- Multi-account ownership is driving improved money management
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- Figure 12: Attitudes towards current accounts and current account switching, August 2019
- What we think
Issues and Insights
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- Multi-account ownership is growing, and brands need to adapt
- The facts
- The implications
- Mobile banks have work to do to become a ‘main bank account’
- The facts
- The implications
The Market – What You Need to Know
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- Multi-account holders on the rise
- Branches decline by over a third since 2015
- Current account interest rates decline
- Less than one million switches via CASS in 2019
- Regulators focus on improving transparency
Market Environment
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- Number of consumers with multiple current accounts grows
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- Figure 13: Estimated number of current accounts, 2016-19
- Online channels now dominate current account distribution
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- Figure 14: Current account purchase channels, March 2019
- Branch closures reach record levels
- Current account interest rates continue to fall
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- Figure 15: Monthly average of UK resident banks' Sterling weighted average interest rate – interest-bearing current account deposits from individuals and individual trusts, January 2016-June 2019
- Slight decline in use of high street overdrafts
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- Figure 16: Sterling amounts outstanding on personal current account overdrafts with high street banks, August 2017-August 2019
Switching Activity
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- Switching via the CASS remains low
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- Figure 17: Number of switches per month using the CASS, October 2013 – July 2019
- Nationwide and HSBC achieve most gains in 2018/19
- Challenger banks make up three of the top five
- Ethical concerns move up the consumer agenda
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- Figure 18: Net gains and losses of full account switches using CASS, Q2 2018-Q1 2019
Regulatory and Legislative Changes
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- Increased focus on improving transparency in the current account market
- Through the official bank service league…
- …and the publishing of mandated and voluntary information
- Despite difficulties, Open Banking is set to drive further innovation
- Banks react to recent overdraft regulations
Companies and Brands – What You Need to Know
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- Barclays and LBG dominate the current account market
- Online or app-only banks appeal to those with more than two accounts
- High street banks launch digital solutions aimed at specific customers
- New innovation on the high street…
- …and through app-only banks
Providers Share of the Current Account Market
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- Close to one in five holds their main account with Barclays
- LBG accounts for one quarter of main current accounts
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- Figure 19: Current account providers, by share of main accounts, August 2019
- Online or app-only banks more common among those with more than two accounts
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- Figure 20: Current account providers, by share of other current accounts, May 2019
Competitive Strategies and Innovation
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- Banks introduce separate accounts targeted at specific customers
- Santander launches Openbank
- RBS develops BÓ
- Revolut targets Gen Z
- HSBC revamps First Direct to appeal to the younger market
- Cash switching deals return to the market…
- …while Barclays improves upon its rewards offering
- Lloyds, Bank of Scotland and Nationwide reduce their in-credit interest rates
- NatWest leads innovation on the high street
- Through a new video banking service…
- … and Open Banking partnerships
- App-only banks use Open Banking to build their ‘Marketplace’…
- …while premium accounts have a mixed impact
The Consumer – What You Need to Know
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- Over a third own more than one current account
- Just under 50% have not switched or opened an account in the last five years
- Multi-account holders are switching or opening a new account elsewhere
- 28% are planning to switch or open a new account in the next 12 months
- Over 60% plan on retaining use of their main current account
- Definite switchers prioritise high street brands
- 30% do not see the importance of branch services
- Multi-account ownership is driving improved money management
Current Account Ownership
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- Majority own just the one account…
- …but over one third own more than one account
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- Figure 21: Current account ownership, August 2019 vs May 2016
Current Account Switching Activity
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- Almost half have not switched or opened a new account in the last five years…
- …with over-55s among the least likely to be active in the market
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- Figure 22: Current account switching/account opening activity, August 2019
- Multi-account holders drive account opening/switching activity
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- Figure 23: Current account switching/account opening activity, by current account ownership, August 2019
Current Account Switching Behaviours
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- Consumers holding their first account offer a unique opportunity
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- Figure 24: Current account switching/account opening behaviour among single account holders, August 2019
- 60% of multi-account holders have established a new banking relationship…
- …although higher income households are more likely to be moving accounts at their main bank
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- Figure 25: Current account switching/account opening behaviour among multi-account holders, August 2019
- 80% of additional accounts are being used alongside a main account
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- Figure 26: Current account switching/account opening behaviour among those who last opened an additional account, August 2019
Likelihood to Switch Account
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- 28% expect to switch or open a new account in the next 12 months
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- Figure 27: Likelihood to switch/open new current account in the next 12 months, August 2019
- Nationwide customers the least likely to be looking for a change
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- Figure 28: Likelihood to switch/open new current account in the next 12 months, by current account ownership, August 2019
- Recent switchers are more likely to do so again
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- Figure 29: Likelihood to switch/open new current account in the next 12 months, by current account switching/account opening activity, August 2019
- Customers holding their first account are looking for a change
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- Figure 30: Likelihood to switch/open new current account in the next 12 months, by current account switching behaviours, August 2019
Future Switching Behaviours
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- Most potential switchers intend to retain use of their existing account
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- Figure 31: Future current account switching/account opening behaviours, August 2019
- Multi-account holders are more likely to be looking for a secondary account
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- Figure 32: Future current account switching/account opening behaviours, by current account ownership, August 2019
Likelihood to Switch to Different Types of Provider
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- Well-known brands appeal to definite switchers…
- …while lesser-known banks are more popular among those who are less sure
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- Figure 33: Likelihood to switch to different types of provider, by Likelihood to switch/open new current account in the next 12 months, August 2019
- High street banks appeal to those looking to close their existing account
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- Figure 34: Likelihood to switch to different types of provider, by future current account switching/account opening behaviours, August 2019
Important Factors in Choice of Current Account Provider
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- Almost a third do not see the importance of branch services
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- Figure 35: Attitudes towards current accounts and current account switching, August 2019
- New innovations appeal to likely switchers
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- Figure 36: Agreement with attitudes towards current accounts and current account switching, by Likelihood to switch/open new current account in the next 12 months, August 2019
- Traditional switchers prioritise rewards and offers
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- Figure 37: Agreement with attitudes towards current accounts and current account switching, by future current account switching/account opening behaviour, August 2019
Attitudes towards Current Accounts and Current Account Switching
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- Over half think that multiple current accounts can help money management…
- …but many still see switching as a hassle
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- Figure 38: Attitudes towards current accounts and current account switching, August 2019
- The account opening process can be off-putting
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- Figure 39: Attitudes towards current accounts and current account switching, by Likelihood to switch/open new current account in the next 12 months, August 2019
- Those new to the current account market are a unique proposition
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- Figure 40: Attitudes towards current accounts and current account switching, by current account switching/account opening behaviours, August 2019
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
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