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Current Accounts - Ireland - December 2013

Published By :

Mintel

Published Date : Jan 2014

Category :

Banking

No. of Pages : 132 Pages


The current account market, in particular that of RoI, suffers from a lack of competition, with Irish consumers recognising this. Reluctance to switch current account providers may have more to do with the inconvenience of the process rather than brand loyalty. Moving forward, new legislation to make account switching easier could help lead to a more dynamic and competitive market.
TABLE OF CONTENT

Introduction
Key themes in the report
Data Sources
Definitions
Abbreviations

Executive Summary
The Market
Current account ownership nearing saturation
Figure 1: Number of current accounts owned, NI and RoI, November 2013
Market factors
Tentative recovery underway within Irish economies
Figure 2: GDP annual percentage growth, UK, NI and RoI, 2008-16
Unemployment down, but remains a challenge
Figure 3: Unemployment (%) levels, RoI and NI, 2010-13
No such thing as \'free banking\' for Irish consumers
Lack of competition in RoI market – improved competition in NI
Significant increase in complaints about account providers in both RoI and NI
The consumer
Banking app most common benefit with current accounts
Figure 4: Benefits and features included in consumers\' main current accounts, RoI and NI, November 2013
NI consumers far more inclined to switch than RoI consumers
Figure 5: When consumers last switched their main current account, NI and RoI, November 2013
High level of negativity in attitudes towards banks and banking
Figure 6: Agreement with statements relating to banks and banking, NI and RoI, November 2013
Scepticism about free banking, dubious about transparency
Figure 7: Agreement with statements relating to charges and competition, NI and RoI, November 2013

Issues in the Market
What is the penetration level within the current account sector in Ireland?
What companies are the main current account providers in Ireland?
What benefits and features do current account holders enjoy?
How likely are Irish consumers to switch current account providers?
How do consumers feel about banks? Are consumers primarily positive or negative in their attitudes towards banks?

Trend Application
Trend: Make it Mine
Trend: Access All Areas
Mintel futures: Brand Intervention

Market Overview
Key points
Light at the end of the tunnel for Irish economies
Figure 8: GDP annual percentage growth, UK, NI and RoI, 2008-15
Unemployment down slightly – but still cause for concern
Figure 9: Unemployment (%) levels, RoI and NI, 2010-13
Free banking a thing of the past for Irish consumers
Quarterly maintenance charges now commonplace for RoI consumers
Figure 10: Quarterly fees, current accounts, RoI, November 2013
NI consumers being hit with \'discreet\' rather than upfront charges
Figure 11: Distribution of current account revenue, by income source, 2011
Average UK (including NI) current account yield revenue of £139 per annum
Figure 12: Average account revenue, by type of account, UK (including NI), 2011
Consumer campaigners targeting UK (including NI) banks\' overdraft charges
Majority of RoI consumers conscious that banking services getting more expensive
Figure 13: Consumers\' perception about increasing cost of bank services, RoI, October 2013
Majority say they are aware of charges – estimating less than €50 a year…
Figure 14: Estimated cost of bank services per annum, RoI, October 2013
but the actual amount is far higher – indicating low-level consumer awareness
Fees coming at a time when consumers already hard pressed for disposable income
Figure 15: How consumers rate their current financial situation, NI and RoI, November 2013
Evolving competitive landscape in RoI – with competition returning
New competition may come from beyond unconventional, unexpected sources
Almost half of all RoI consumers dissatisfied with level of competition
Figure 16: Agreement with statement \'There is not enough competition between banks\', by age, RoI and NI, November 2013
RoI consumers less likely than NI consumers to compare competing products
Figure 17: Whether consumers took the first product they looked at or compared several different products when making a decision on a current account, EU27, RoI and UK (incl NI), April 2012
Figure 18: Whether consumers took the first product they looked at or compared several different products when making a decision on selected financial products, RoI and UK (incl NI), April 2012
Complaints by UK (including NI) consumers up 34% in 2012/13
Figure 19: Number of complaints relating to current accounts, UK (including NI), 2008-13
Significant increase in complaints about \'packaged\' current accounts…
which perhaps led to introduction of new rules on packaged accounts?
But official data do not tell the whole story of complaints
UK\'s \'worst banks\' for customer service include two NI banks
Complaints about current accounts up 47% in RoI since 2012…
but the majority of banking-related complaints not upheld
Figure 20: Outcome of banking-related complaints, RoI, H1 2013
More than a quarter of RoI consumers frustrated with current bank
Figure 21: Consumers\' frustration with current providers, RoI, October 2013
So why don\'t frustrated consumers simply switch to another bank?
Figure 22: Consumer confidence that switching banks would be quick and smooth, RoI, October 2013
Suggesting lack of awareness that switching \'efficiency\' is guaranteed

Strengths and Weaknesses
Strengths
Weaknesses

Account Ownership and Market Share
Key points
Only small minority do not have a current account
Figure 23: Number of current accounts owned, NI and RoI, November 2013
Over a third have more than one current account
Figure 24: Consumers with two current accounts, by marital status, NI and RoI, November 2013
Five \'major providers\' operating in NI current account market
Figure 25: Financial institution used for main current account, NI, November 2013
Nationwide commands largest share of \'other account\' market
Figure 26: Financial institution used for other current account, NI, November 2013
The \'Big Two\' dominate the RoI current account market
Figure 27: Financial institution used for main current account, RoI, November 2013
AIB strongest among the young, BoI among older consumers
Figure 28: Financial institutions used for main current account, by age, RoI, November 2013
Much-needed competition in the pipeline for RoI market

Channels to Market
Key points
Majority open current accounts direct, face-to-face with provider
Figure 29: Channel of purchase, current account, EU27, RoI and UK (incl NI), April 2012
Even in internet age, consumers not turning backs on branch banking
Figure 30: Agreement with statements relating to online and branch banking, NI and RoI, November 2013
Belief that branches redundant not confined to younger consumers
Figure 31: Agreement with statement \'There is little need to visit a high street branch anymore\', by age, NI and RoI, November 2013

The Consumer – Current Account Benefits
Key points
Banking app most common benefit with current accounts
Figure 32: Benefits and features included in consumers\' main current accounts, RoI and NI, November 2013
NI consumers far more likely to have benefits included with current account
Relatively low-level awareness among consumers of added benefits
Figure 33: Consumers who do not know whether a particular benefit is included in main current account, by benefit, RoI and NI, November 2013
Card protection and identity theft insurance – highly regarded benefits
Figure 34: Inclusion and perceived relevance of common current account benefits, NI, November 2013
Figure 35: Inclusion and perceived relevance of common current account benefits, RoI, November 2013

The Consumer – Switching
Key points
Switching activity far higher among NI than RoI consumers
Figure 36: When consumers last switched their main current account, NI and RoI, November 2013
Recent switching activity in NI – but not in RoI
Older consumers display most loyalty to account provider
Figure 37: Consumers who have never switched their main current account provider, by age, RoI and NI, November 2013

The Consumer – Attitudes towards Banks, Banking and Current Accounts
Key points
Irish consumers cynical and critical in views towards banks
Figure 38: Agreement with statements relating to banks and banking, NI and RoI, November 2013
Cynicism most acute among men, ABC1s and self-employed
Figure 39: Agreement with statement \'Banks do not act in the best interests of their customers\', NI and RoI, November 2013
Belief and trust in banks largely confined to older consumers
Figure 40: Agreement with statement \'Banks provide a valuable service\', by age, NI and RoI, November 2013
Figure 41: Agreement with statement \'I trust my bank to give me a fair deal\', by age, NI and RoI, November 2013
High level of scepticism about charges and competition in RoI
Figure 42: Agreement with statements relating to charges and competition, NI and RoI, November 2013
Scepticism about \'free banking\' and transparency most pointed in RoI
Focus on charges and transparency perhaps related to financial literacy

Appendix
NI Toluna tables
Figure 43: How consumers rate their current financial situation, by demographics, NI, November 2013
Figure 44: Number of current accounts owned, by demographics, NI, November 2013
Figure 45: Financial institutions used for main current account, by demographics, NI, November 2013
Figure 46: Financial institutions used for main current account, by demographics, NI, November 2013 (continued)
Figure 47: Financial institutions used for main current account, by demographics, NI, November 2013 (continued)
Figure 48: Financial institutions used for other current account(s), by demographics, NI, November 2013 (continued)
Figure 49: Financial institutions used for other current account(s), by demographics, NI, November 2013 (continued)
Figure 50: Financial institutions used for other current account(s), by demographics, NI, November 2013 (continued)
Figure 51: If consumer’s main current account includes interest-free/fee-free overdraft, by demographics, NI, November 2013
Figure 52: If consumer’s main current account includes preferential rates on other products (eg loans, savings accounts, credit card), by demographics, NI, November 2013
Figure 53: If consumer’s main current account includes annual travel insurance, by demographics, NI, November 2013
Figure 54: If consumer’s main current account includes mobile phone/ gadget insurance, by demographics, NI, November 2013
Figure 55: If consumer’s main current account includes a banking app for a smartphone/tablet, by demographics, NI, November 2013
Figure 56: If consumer’s main current account includes other discounted insurance (eg home, car, life, health), by demographics, NI, November 2013
Figure 57: If consumer’s main current account includes card protection, by demographics, NI, November 2013
Figure 58: If consumer’s main current account includes identity theft protection, by demographics, NI, November 2013
Figure 59: If consumer’s main current account includes motor breakdown/ roadside assistance, by demographics, NI, November 2013
Figure 60: If consumer’s main current account includes commission-free cash withdrawals abroad, by demographics, NI, November 2013
Figure 61: If consumer’s main current account includes retail or leisure discounts and vouchers, by demographics, NI, November 2013
Figure 62: When consumers last switched their main current account, by demographics, NI, November 2013
Figure 63: Agreement with statements relating to current accounts and banking, by demographics, NI, November 2013
Figure 64: Agreement with statements relating to current accounts and banking, by demographics, NI, November 2013 (continued)
Figure 65: Agreement with statements relating to current accounts and banking, by demographics, NI, November 2013 (continued)
RoI Toluna tables
Figure 66: How consumers rate their current financial situation, by demographics, RoI, November 2013
Figure 67: Number of current accounts owned, by demographics, RoI, November 2013
Figure 68: Financial institutions used for main current account, by demographics, RoI, November 2013
Figure 69: Financial institutions used for main current account, by demographics, RoI, November 2013 (continued)
Figure 70: Financial institutions used for main current account, by demographics, RoI, November 2013 (continued)
Figure 71: Financial institutions used for other current account(s), by demographics, RoI, November 2013 (continued)
Figure 72: Financial institutions used for other current account(s), by demographics, RoI, November 2013 (continued)
Figure 73: Financial institutions used for other current account(s), by demographics, RoI, November 2013 (continued)
Figure 74: If consumer’s main current account includes interest-free/fee-free overdraft, by demographics, RoI, November 2013
Figure 75: If consumer’s main current account includes preferential rates on other products (eg loans, savings accounts, credit card), by demographics, RoI, November 2013
Figure 76: If consumer’s main current account includes annual travel insurance, by demographics, RoI, November 2013
Figure 77: If consumer’s main current account includes mobile phone/ gadget insurance, by demographics, RoI, November 2013
Figure 78: If consumer’s main current account includes a banking app for a smartphone/tablet, by demographics, RoI, November 2013
Figure 79: If consumer’s main current account includes other discounted insurance (eg home, car, life, health), by demographics, RoI, November 2013
Figure 80: If consumer’s main current account includes card protection, by demographics, RoI, November 2013
Figure 81: If consumer’s main current account includes identity theft protection, by demographics, RoI, November 2013
Figure 82: If consumer’s main current account includes motor breakdown/ roadside assistance, by demographics, RoI, November 2013
Figure 83: If consumer’s main current account includes commission-free cash withdrawals abroad, by demographics, RoI, November 2013
Figure 84: If consumer’s main current account includes retail or leisure discounts and vouchers, by demographics, RoI, November 2013
Figure 85: When consumers last switched their main current account, by demographics, RoI, November 2013
Figure 86: Agreement with statements relating to current accounts and banking, by demographics, RoI, November 2013
Figure 87: Agreement with statements relating to current accounts and banking, by demographics, RoI, November 2013 (continued)
Figure 88: Agreement with statements relating to current accounts and banking, by demographics, RoI, November 2013 (continued)

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