The current account market is a mature market, but one that is highly segmented, having diversified over the years to cover many niche consumer segments. Since the OFT announced it was to launch an investigation into unarranged overdraft fees back in 2006, banks have seen a swathe of customers seeking to reclaim unarranged overdraft fees incurred in the past. Furthermore, having received an unfavourable verdict in the High Court test case, providers are bracing themselves for what looks like an inevitable cap on overdraft fees. This, at a time when the credit crunch is already making life difficult for the high street banks, is limiting the potential for cross-selling lending products to current account holders.

The current account market is a mature market, but one that is highly segmented, having diversified over the years to cover many niche consumer segments. Since the OFT announced it was to launch an investigation into unarranged overdraft fees back in 2006, banks have seen a swathe of customers seeking to reclaim unarranged overdraft fees incurred in the past. Furthermore, having received an unfavourable verdict in the High Court test case, providers are bracing themselves for what looks like an inevitable cap on overdraft fees. This, at a time when the credit crunch is already making life difficult for the high street banks, is limiting the potential for cross-selling lending products to current account holders.

The key challenge facing the market is how to respond to the mooted cap on overdraft fees. This report examines ways in which firms might seek to make up lost revenue, with possibilities ranging from an end to free banking to an increased drive to sell added-value accounts. This latter approach is likely to prove particularly fruitful – and, as such, in 2008 Mintel has amalgamated its once-separate Current Accounts and Premium and Packaged Accounts reports.

This report examines key influences on the market, such as consumer confidence and personal disposable income. Alternatives to standard current accounts are presented, as well as a SWOT analysis of the overall market conditions. The main players in the market are looked at in terms of new product launches, innovation in the market and the range of products they offer. An estimation of market size and the future growth is presented as well as a breakdown of competitor market shares and advertising expenditure. Finally, extensive consumer research looks in detail at ownership of and attitudes towards current accounts.

Key report themes:

The OFT investigation into unarranged overdraft fees and the recent High Court test case ruling.

The potential implications of a cap being imposed on unarranged overdraft fees.

The growth of packaged accounts and the criticism surrounding the true value they offer.

Consumer switching behaviour and the use of incentives and dedicated switching teams.

The growth of other niche segments such as migrant worker and Islamic bank accounts.

The pivotal role of the current account customer base as an effective cross-selling platform.