Table of Contents
Overview
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- What you need to know
- Scope of this Report
Executive Summary
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- The market
- Open Banking comes into force
- Earnings growing faster than inflation
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- Figure 1: CPI and average weekly earnings, July 2013-July 2018
- First interest rate rises in a decade
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- Figure 2: Consumer deposits quoted interest rates to households, July 2013-August 2018
- Companies and brands
- Lloyds Banking Group is the largest current account provider
- Nationwide remains the largest advertiser in retail
- Brand building and personal banking remain the main focus of advertising
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- Figure 3: Top 10 highest-spending retail banks/building societies for recorded above-the-line, online display and direct mail advertising expenditure on retail banking, by product category, 2017/18
- The consumer
- Consumers have complex financial lives
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- Figure 4: Current account ownership, by number of accounts held, June 2018
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- Figure 5: Proportion of secondary current accounts held with main current account provider, June 2018
- Savings accounts and credit cards are the most commonly held financial products after current accounts
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- Figure 6: Ownership of financial products, June 2018
- Savings products most likely to be held with main current account provider
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- Figure 7: Financial products ownership, by proportion held with main current account provider, June 2018
- Online banking is the preferred channel
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- Figure 8: Channel preference in retail banking, by activity, June 2018
- ‘Push’ factors more powerful than ‘pull’ factors when it comes to retaining customers
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- Figure 9: Reasons to review financial products, June 2018
- Trust is paramount when it comes to cross-selling
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- Figure 10: Attitudes towards retail banking, June 2018
- Two out of three consumers have not heard of Open Banking
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- Figure 11: Awareness of Open Banking, by gender and age group, June 2018
- Willingness to engage with Open Banking is limited
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- Figure 12: Likelihood of using Open Banking, June 2018
- What we think
Issues and Insights
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- Open Banking needs some backing
- The facts
- The implications
- A turning point for savers?
- The facts
- The implications
The Market – What You Need to Know
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- Open Banking comes into force
- Debit card payments overtake cash for the first time
- First interest rate rises in a decade
Economic and Regulatory Environment
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- Open Banking comes into force
- Compliance with ring-fencing directives
- LINK re-evaluates ATM fee plans as usage falls
- Debit card payments grew by 14% in 2017, overtaking cash for the first time
Market Drivers
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- Earnings growing faster than inflation
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- Figure 13: CPI and average weekly earnings, July 2013-July 2018
- First interest rate rises in a decade
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- Figure 14: Consumer deposits quoted interest rates to households, July 2013-August 2018
- FCA’s discussion paper proposes minimum interest rate on savings
- Funding for Lending and Term Funding Schemes end
- Consumer credit
- FCA introduces new credit rules to support people in persistent debt
- Complaints about consumer credit reach record level after 40% increase in 2017/18
- FCA announces caps on high-cost credit, but delays further action on overdraft fees
- 30% of customers fail to find cheapest mortgage deal
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- Figure 15: Consumer credit quoted interest rates to households, July 2013-July 2018
Companies and Brands – What You Need to Know
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- Lloyds Banking Group is the largest current account provider
- Nationwide remains the largest advertiser in retail banking
- Brand building and personal banking remain the main focus of advertising
Market Share
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- Lloyds Banking Group is the largest current account provider
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- Figure 16: Top six main current account providers (including netted banking groups), May 2018
- Barclays is the largest individual current account provider
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- Figure 17: Top 10 current account providers, by share of main and other current accounts, May 2018
Company Profiles
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- Lloyds Banking Group
- Performance and news
- Recent developments in retail banking proposition
- Barclays
- Performance and news
- Recent developments in retail banking proposition
- RBS Group
- Performance and news
- Recent developments in retail banking proposition
- Santander
- Performance and news
- Recent developments in retail banking proposition
- HSBC Group
- Group performance and news
- Recent developments in retail banking proposition
- Nationwide Building Society
- Performance and news
- Recent developments in retail banking proposition
- CYBG and Virgin Money
Launch Activity and Innovation
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- Virgin Money and Virgin Atlantic launch air miles savings account
- Goldman Sachs to launch its digital-only Marcus brand in the UK
- Starling Bank and Monzo introduce option to block betting payments
- App-only bank Starling launches joint current accounts
Advertising and Marketing Activity
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- Nationwide remains the largest advertiser in retail banking
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- Figure 18: Top 10 highest-spending retail banks/building societies for recorded above-the-line, online display and direct mail advertising expenditure on retail banking, 2013/14-2017/18
- Brand building and personal banking remain the main focus of advertising
- Lloyds Bank’s Get The Inside Out campaign
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- Figure 19: Top 10 highest-spending retail banks/building societies for recorded above-the-line, online display and direct mail advertising expenditure on retail banking, by product category, 2017/18
- TV accounts for over half of ATL expenditure
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- Figure 20: Top 10 highest-spending retail banks/building societies for recorded above-the-line, online display and direct mail advertising expenditure on retail banking, by media type, 2017/18
- Sponsorships
- Charitable foundations and partnerships
- Nielsen Ad Intel coverage
Brand Research
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- Brand map: Nationwide scores high in both trust and differentiation
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- Figure 21: Attitudes towards and usage of selected brands, May 2018
- Key brand metrics: First Direct customers most likely to rate their experience as excellent
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- Figure 22: Key metrics for selected brands, May 2018
- Brand attitudes: Generous rates, such as Tesco’s and Santander’s, pay off when it comes to rewarding loyalty scores
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- Figure 23: Attitudes, by brand, May 2018
- Brand personality: Smaller brands most likely to been seen as exclusive
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- Figure 24: Brand personality – Macro image, May 2018
- Brand personality: HSBC and Barclays associated with being irresponsible, authoritative and only caring about profits
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- Figure 25: Brand personality – Micro image, May 2018
- Brand analysis
- Nationwide stands out in most of the positive metrics
- First Direct customers most likely to recommend the brand
- IT issues: lessons from TSB and Tesco Bank
- HSBC and Barclays struggle to leave scandals behind
The Consumer – What You Need to Know
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- Consumers have complex financial lives
- Online banking is the preferred channel
- ‘Push’ factors more powerful than ‘pull’ factors when it comes to retaining customers
- Trust is paramount when it comes to cross-selling
- Two out of three consumers have not heard of Open Banking
- Willingness to engage with Open Banking is limited
Current Account Ownership
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- 98% of consumers have a current account, with 33% owning two or more
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- Figure 26: Current account ownership, by number of accounts held, June 2018
- Multi-banking more common among older consumers
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- Figure 27: Proportion of secondary current accounts held with main current account provider, by generation, June 2018
Ownership of Financial Products
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- Savings accounts and credit cards are the most commonly held financial products after current accounts
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- Figure 28: Ownership of financial products, June 2018
- Multiple product ownership increases with age
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- Figure 29: Repertoire of financial products owned, by age, June 2018
- Savings products most likely to be held with main current account provider
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- Figure 30: Financial products ownership, by proportion held with main current account provider, June 2018
Channel Preference
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- Online is the most preferred channel
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- Figure 31: Channel preference in retail banking, by activity, June 2018
- Branches offer reassurance
- The concept of aggregator apps still eludes consumers
Reasons to Review Financial Arrangements
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- Customer experience is key to retain customers
- Special offers can attract and retain the value-driven consumer
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- Figure 32: Reasons to review financial products, June 2018
- Open Banking has the potential to highlight relevant offers
Attitudes towards Retail Banking
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- Open Banking can enhance positive consumer behaviour
- Trust is paramount
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- Figure 33: Attitudes and behaviours towards retail banking, June 2018
- Affluent millennials are most likely to welcome offers from other providers
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- Figure 34: Agreement with the statement “I am happy for providers other than my main bank to send me new product offers” – CHAID – Tree output, June 2018
Awareness of Open Banking
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- Two out of three consumers have not heard of Open Banking
- Awareness is higher among the young for men and the old for women
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- Figure 35: Awareness of Open Banking, by gender and age group, June 2018
Likelihood to Engage with Open Banking
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- Willingness to engage with Open Banking still limited
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- Figure 36: Likelihood of using Open Banking, June 2018
- Incentives are key
- Likelihood of using Open Banking increases with awareness…
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- Figure 37: Likelihood of using Open Banking, by awareness of Open Banking, June 2018
- …and is higher among Millennials
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- Figure 38: Likelihood of using Open Banking, by generation, June 2018
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- CHAID analysis – methodology
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