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Current Accounts - Ireland - October 2016

OVERVIEW
What you need to know
Issues covered in this Report
Definitions
EXECUTIVE SUMMARY
The market
Around 7 million active current accounts across Ireland
Figure 1: Total number of active current accounts, IoI, RoI, and NI, 2011-16
Forecast
Figure 2: Indexed total number of active current accounts, IoI, RoI, and NI, 2011-21
Market factors
Both economies continuing to grow – but uncertainties lie ahead
Switching more popular among UK (including NI) than RoI consumers
Increase in the number of complaints about current accounts
Competitive strategies
The consumer
Vast majority of consumers have at least one current account
Figure 3: Number of current accounts owned by consumers, NI and RoI, August 2016
Seven major current account providers in NI
Figure 4: Bank or financial institution where main current account is held, NI, August 2016
Figure 5: Bank or financial institution where other current accounts are held, NI, August 2016
‘Main’ current account market in RoI controlled by AIB and BOI
Figure 6: Bank or financial institution where main current account is held, RoI, August 2016
Figure 7: Bank or financial institution where other current accounts are held, NI, August 2016
Switching activity limited among Irish consumers
Figure 8: If consumers have switched their main current account provider, August 2016
Willingness to pay monthly fee for additional features
Figure 9: Features that consumers would be willing to pay a monthly fee to have as part of their current account, August 2016
What it means
ISSUES AND INSIGHTS
Little inclination on the part of consumers to switch accounts
The facts
The implications
Monetary incentives most likely to persuade consumers to pay a fee
The facts
The implications
Fees and charges putting brakes on account ownership in RoI
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Both economies continuing to grow – but uncertainties lie ahead
Switching more popular among UK (including NI) than RoI consumers
Increase in the number of complaints about current accounts
MARKET SIZE AND FORECAST
Almost 7 million active current accounts in 2016
Figure 10: Total number of active current accounts, IoI, RoI, and NI, 2011-21
RoI market contracting, NI growing since economic downturn
Modest increase in number of active accounts likely in coming years
Figure 11: Index of total number of active current accounts, actual, forecast and projected, IoI, RoI, and NI, 2011-21
MARKET DRIVERS
NI economic growth to fall to 1% in 2016, 0.2% in 2017
RoI economic growth forecast at 4.8% in 2016, 3.8% in 2017
Limited use of current account switching process in RoI
Figure 12: Number of current accounts switched, RoI, 2011-15
More than 1 million switches in UK (including NI) from mid-2015 to mid-2016
Figure 13: Number of current account switches, UK (including NI), Q4 2014-Q2 2016
Slightly above-average awareness among NI consumers
NI-based providers experiencing net switching losses
Figure 14: Switching gains and losses, UK (including NI) institutions, Q4 2015
UK (including NI) complaints about current accounts up 66% in 2015/2016
Figure 15: Complaints about current accounts received by Financial Ombudsman, UK (including NI), 2012-16*
Figure 16: Complaints about packaged accounts received by Financial Ombudsman, UK (including NI), 2012-16*
Complaints from RoI consumers about current accounts up 6% in 2015
Figure 17: Complaints pertaining to bank accounts received by Financial Services Ombudsman, RoI, 2011-15
Figure 18: Complaints about banking by product type received by Financial Services Ombudsman (Ireland), RoI, 2015
Complaints about current accounts to providers on the rise
Figure 19: Number of complaints about current accounts, RoI, H1 2013-H1 2015
Figure 20: Complaints about current account, by complaint type, RoI, H1 2015
COMPETITIVE STRATEGIES – WHAT YOU NEED TO KNOW
Santander launches 123 Lite for less affluent consumers
Danske Bank launches first NI rewards account
Halifax launches attractive cash incentive to new switchers
Nationwide offers high interest rate account to target savers
Tesco drops current account fees
COMPETITIVE STRATEGIES
Halifax seeks to attract switchers with cash incentive
Nationwide offers high interest rate to appeal to savers
M&S rewards existing current account holders
Tesco drops monthly current account fee
Bank of Ireland launches online current account service
HSBC brings back £200 ‘switch and stay’ scheme
THE CONSUMER – WHAT YOU NEED TO KNOW
Vast majority of consumers have a current account
Seven major current account providers in NI
‘Main’ current account market in RoI controlled by AIB and BOI
Switching activity limited among Irish consumers
Willingness to pay monthly fee for additional features
THE CONSUMER – OWNERSHIP OF CURRENT ACCOUNTS
Current account ownership almost universal
Figure 21: Number of current accounts owned by consumers, NI and RoI, August 2016
More than a third of all consumer have multiple current accounts
Consumers with children more likely to have two current accounts
Figure 22: Consumers who have two current accounts, by presence of children in the household, NI and RoI, August 2016
ABC1s more inclined than C2DEFs to have three or more accounts
Figure 23: Consumers who have three or more current accounts, by social class, NI and RoI, August 2016
THE CONSUMER – WHERE CURRENT ACCOUNTS ARE HELD
Four major, three minor providers of main current accounts in NI
Figure 24: Bank or financial institution where main current account is held, NI, August 2016
Six major providers in other or non-main current account market in NI
Figure 25: Bank or financial institution where other current accounts are held, NI, August 2016
RoI’s main current account market dominated by two providers
Figure 26: Bank or financial institution where main current account is held, RoI, August 2016
Credit unions lead the field in the non-main/other current account market
Figure 27: Bank or financial institution where other current accounts are held, RoI, August 2016
THE CONSUMER – SWITCHING ACTIVITY
44% of NI, 31% of RoI consumers have switched provider
Figure 28: If consumers have switched their main current account provider, August 2016
Around half of all switchers did so more than 5 years ago
Churn highest among ABC1s and younger consumers
Figure 29: Consumers who have never switched their main current account provider, by age and social class, August 2016
THE CONSUMER – INTEREST IN EXTRA FEATURES
Some interest among consumers in additional current account features
Figure 30: Features that consumers would be willing to pay a monthly fee to have as part of their current account, August 2016
Women and 35-44s most interested in monetary incentives
Figure 31: Consumers who would be willing to pay a monthly fee to have a one-off cash incentive as part of their current account, by gender and age, August 2016
Protection against fraudulent activity most appealing to C2DEFs
Figure 32: Consumers who would be willing to pay a monthly fee to have a card protection as part of their current account, by social class, August 2016
Figure 33: Consumers who would be willing to pay a monthly fee to have ID theft protection as part of their current account, by social class, August 2016
Older consumers want travel insurance, younger want gadget cover
Figure 34: Consumers who would be willing to pay a monthly fee to have annual travel insurance as part of their current account, by gender and age, August 2016
Figure 35: Consumers who would be willing to pay a monthly fee to have mobile phone or gadget insurance as part of their current account, by gender and age, August 2016
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data sources
Generational cohort definitions
Abbreviations
APPENDIX – THE CONSUMER
NI Toluna data
Figure 36: Number of current accounts owned by consumers, by demographics, NI, August 2016
Figure 37: Bank or financial institution where main current account is held, by demographics, NI, August 2016
Figure 38: Bank or financial institution where main current account is held, by demographics, NI, August 2016(continued)
Figure 39: Bank or financial institution where main current account is held, by demographics, NI, August 2016(continued)
Figure 40: Bank or financial institution where other current accounts are held, by demographics, NI, August 2016
Figure 41: Bank or financial institution where other current accounts are held, by demographics, NI, August 2016(continued)
Figure 42: Bank or financial institution where other current accounts are held, by demographics, NI, August 2016(continued)
Figure 43: If consumers have switched their main current account provider, by demographics, NI, August 2016
Figure 44: Features that consumers would be willing to pay a monthly fee to have as part of their current account, by demographics, NI, August 2016
Figure 45: Features that consumers would be willing to pay a monthly fee to have as part of their current account, by demographics, NI, August 2016(continued)
Figure 46: Features that consumers would be willing to pay a monthly fee to have as part of their current account, by demographics, NI, August 2016(continued)
RoI Toluna data
Figure 47: Number of current accounts owned by consumers, by demographics, RoI, August 2016
Figure 48: Bank or financial institution where main current account is held, by demographics, RoI, August 2016
Figure 49: Bank or financial institution where main current account is held, by demographics, RoI, August 2016(continued)
Figure 50: Bank or financial institution where main current account is held, by demographics, RoI, August 2016(continued)
Figure 51: Bank or financial institution where other current accounts are held, by demographics, RoI, August 2016
Figure 52: Bank or financial institution where other current accounts are held, by demographics, RoI, August 2016(continued)
Figure 53: Bank or financial institution where other current accounts are held, by demographics, RoI, August 2016(continued)
Figure 54: If consumers have switched their main current account provider, by demographics, RoI, August 2016
Figure 55: Features that consumers would be willing to pay a monthly fee to have as part of their current account, by demographics, RoI, August 2016
Figure 56: Features that consumers would be willing to pay a monthly fee to have as part of their current account, by demographics, RoI, August 2016(continued)
Figure 57: Features that consumers would be willing to pay a monthly fee to have as part of their current account, by demographics, RoI, August 2016(continued)

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