Table of Contents
Introduction
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- Report scope and product definitions
- Abbreviations
Executive Summary
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- The market
- Size of the current account customer base
- Industry turnover
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- Figure 1: Distribution of current account revenue, by income source, 2007 and 2011
- Revenue streams
- Growth in packaged account fees
- Market factors
- New packaged account rules
- Faster switching service to be introduced
- Last OFT review critical of complex charging models and lack of market competition
- Companies, brands and innovation
- Largest providers of current accounts
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- Figure 2: Share of main current account market, by top six providers (on a group basis), June 2013
- Increased product launches
- Adspend rises off the back of new product launches
- The consumer
- Current account ownership
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- Figure 3: Number of personal current accounts held, June 2013
- Product penetration
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- Figure 4: Type of current account held, June 2013
- Perceived relevance of common packaged account benefits
- Over half of current account holders access online banking at least once a week
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- Figure 5: Frequency of using banking services provided by main current account provider, June 2013
- Past switching behaviour
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- Figure 6: Proportion of current account holders who have switched their main account provider, June 2013
- Reasons to switch
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- Figure 7: Top five factors most likely to persuade people to switch their main current account provider, June 2013
- What we think
Issues in the Market
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- How many current accounts do people have?
- What types of account do they hold?
- What is the level of customer churn?
- What are the prospects for new entrants into the market?
Trend Application
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- Trend: Make it Mine
- Trend: Extend My Brand
- Mintel’s Futures: Access Anything, Anywhere
Market Drivers
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- Key points
- Regulatory round up: recent developments
- Current account complaints up by a third in 2012/13
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- Figure 8: Number of new complaints relating to current accounts received by new cases received by FOS, 2008-13
- Increased margins on overdraft lending
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- Figure 9: Average monthly overdraft interest rate, three-month LIBOR and official bank rate, March 2007-March 2013
- Fall in current account fraud
- Retail deposits grow by 5% in 2012
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- Figure 10: Retail savings balances, by sector, 2003-12
Market SWOT Analysis
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- Figure 11: UK personal current account market – SWOT analysis, 2013
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Who’s Innovating?
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- Key points
- Surge in packaged accounts
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- Figure 12: Number of packaged versus standard current accounts available and average packaged account fee, 2008-13
- Recent promotions and new product launches
- Santander’s 123 Current Account
- Lloyds TSB’s temporary Vantage offer
- Nationwide launches online current account and its first packaged account offering
- Rewarding loyalty
- Targeting switchers
- Banks introduce charges to help customers stay in ‘control’
- New market entrants
- M&S Bank launches Premier Current Account
- Post Office enters the fray
Market Size and Segmentation
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- Key points
- Number of current accounts continues to rise, driven by the growth in multiple account holdings
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- Figure 13: Estimated number of current accounts and current account holders – UK, 2013
- One in seven accounts are of the packaged or premium variety
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- Figure 14: Distribution of customer accounts, by type of account, 2007-13
Market Revenue
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- Key points
- Packaged account fee income reached over £1 billion in 2011…
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- Figure 15: Distribution of current account revenue, by income source, 2007 and 2011
- Strong growth in packaged account fees…
- … equating to over a third of total market revenue
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- Figure 16: Average account revenue and share of total revenue, by type of account (all accounts), 2011
- Packaged accounts generate double the revenue on average
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- Figure 17: Average revenue, by type of account and income source (active accounts only), 2011
Market Share
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- Key points
- Lloyds TSB is the largest provider of current accounts
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- Figure 18: Current account provider rankings, by share of main current account market, June 2013
- Top six banking groups control 94% of the ‘main’ account market
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- Figure 19: Share of main current account market, by top six providers (group basis), June 2013
- Survey background
Companies and Products
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- Lloyds Banking Group
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- Figure 20: Lloyds TSB current account range, June 2013
- Figure 21: Halifax current account range, June 2013
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- Figure 22: Key annual financial data for Lloyds Banking Group, 2011 and 2012
- RBS Group
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- Figure 23: RBS and NatWest’s current account range, June 2013
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- Figure 24: Key annual financial data for RBS Group, 2011 and 2012
- Barclays
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- Figure 25: Barclays’ current account range, June 2013
- Figure 26: Barclays’ current account pack range, June 2013
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- Figure 27: Key annual financial data for Barclays PLC, 2011 and 2012
- HSBC
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- Figure 28: HSBC’s current account range, June 2013
- Figure 29: First Direct’s current account range, May 2013
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- Figure 30: Key annual financial data for HSBC Bank Plc, 2011 and 2012
- Santander
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- Figure 31: Santander current account range, June 2013
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- Figure 32: Key annual financial data for Santander UK, 2011 and 2012
- Nationwide
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- Figure 33: Nationwide’s current account range, June 2013
- Figure 34: Key interim financial data for Nationwide Building Society, H1 2011 and H1 2012
New Entrants and Potential Challengers
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- Metro Bank
- M&S Bank
- Post Office
- Virgin Money
- Tesco Bank
Brand Communication and Promotion
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- Key points
- Current account adspend rises as competition hots up
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- Figure 35: Advertising expenditure on personal current accounts and related money-transmission services, by product sub-category, 2011-13
- In the latest year, TV again claimed the largest share of industry adspend
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- Figure 36: Share of advertising expenditure on current accounts and related money-transmission services, by media type, 2011-13
- … and Lloyds TSB was the top advertiser
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- Figure 37: Top ten advertisers of current accounts and related money-transmission services, 2011-13
- A note about Nielsen Media Research
Channels to Market
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- Key points
- Decline in the UK branch network continues
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- Figure 38: UK bank and building society branch networks, 2003-11
- Many branch closures are the result of consolidation
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- Figure 39: Number of branches operated, by the top six retail banking groups, start 2013
- More will close in 2013 and 2014, but new entrants will help reverse the trend
- Although branch usage has declined over the past few years, it is still the most widely used channel
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- Figure 40: Methods used to access current account in the last 12 months, 2008 and 2012
- Branch visits occur much less regularly than online logins
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- Figure 41: Frequency of using banking services provided by main current account provider, June 2013
Current Account Ownership
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- Key points
- Survey background
- A very small minority have no current account
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- Figure 42: Number of personal current accounts held, June 2013
- Just over a third of current account customers have multiple accounts
- More than a quarter of current account holders have a joint account
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- Figure 43: Segmentation of current account holders, by sole or joint account ownership, June 2013
- Around one in seven have a packaged or premium account
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- Figure 44: Type of current account held, by number of accounts held, June 2013
- Joint account holders are more likely to have a packaged account
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- Figure 45: Type of current account held, by sole or joint ownership, June 2013
- Typical packaged account holder
Perceived Relevance of Packaged Benefits
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- Key points
- Breakdown cover and ID theft and card protection are viewed as the most relevant by customers
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- Figure 46: Inclusion and perceived relevance of common packaged account benefits, June 2013
- Opinions for and against
- Advocates
- Waverers
- Critics
Switching Experience
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- Key points
- One in 12 account holders have switched their main account in the past year
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- Figure 47: Proportion of current account holders who have switched their main account provider, by number of accounts held, June 2013
- Multiple account holders are more likely to have switched
- But half of all account holders have never switched
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- Figure 48: Proportion of current account holders who have switched their main account provider, by sole or joint ownership, June 2013
- Around a quarter of packaged account holders have changed their main provider in the past three years
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- Figure 49: Proportion of current account holders who have switched their main account provider, by type of account held, June 2013
- HSBC has the most loyal customers
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- Figure 50: Proportion of current account holders who have switched their main account provider, by when switch occurred and existing main account provider (top seven only), June 2013
- Nationwide has highest percentage of recent switchers
- To switch or not to switch
Switching Motivation
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- Key points
- Two fifths of current account holders would switch banks if their own provider introduced a monthly fee
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- Figure 51: Factors persuading current account holders to switch, June 2013
- Push factors are more persuasive
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- Figure 52: Comparison of switching factors, by type, June 2013
- Santander and Halifax customers are most susceptible to pull factors
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- Figure 53: Factors that would persuade current account holders to switch, by main account provider (top seven only), June 2013
Appendix – Market Share
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- Figure 54: Main current account provider (top seven only), by demographics, June 2013
- Figure 55: Customer profile for the top seven current account providers, June 2013
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Appendix – Current Account Ownership
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- Figure 56: Number of current accounts held, by demographics, June 2013
- Figure 57: Segmentation of current account holders, by sole or joint account ownership, by demographics, June 2013
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- Figure 58: Type of current account held, by demographics, June 2013
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Appendix – Perceived Relevance of Packaged Benefits
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- Figure 59: Inclusion and perceived relevance of common packaged account benefits, June 2013
- Figure 60: Benefits included and relevant in packaged account (top five), by demographics, June 2013
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- Figure 61: Benefits included and relevant in packaged account (next five), by demographics, June 2013
- Figure 62: Benefits included and relevant in packaged account (final four), by demographics, June 2013
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Appendix – Switching Experience
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- Figure 63: Most popular proportion of current account holders who have switched their main account provider, by when switch occurred, by demographics, June 2013
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Appendix – Switching Motivation
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- Figure 64: Factors persuading current account holders to switch (top five), by demographics, June 2013
- Figure 65: Factors persuading current account holders to switch, by demographics (next four), June 2013
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- Figure 66: Factors persuading current account holders to switch (final two), by demographics, June 2013
- Figure 67: Push, pull and convenience (netted) factors, by demographics, June 2013
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