866-997-4948(US-Canada Toll Free)

CONSUMER ATTITUDES TOWARDS CHALLENGER BRANDS - UK - AUGUST 2018

Published By :

Mintel

Published Date : Aug 2018

Category :

Banking

No. of Pages : N/A

Financial incentives and competitive prices will incentivise people to choose a challenger over an established provider, and give them a clear financial benefit to doing so. However, consumers need help to filter through the growing number of providers to find those that are most relevant to them.
Table of contents
OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Number of accounts rises with population
Figure 1: Estimated number of current accounts in the UK, 2015-18
Current account switches have risen in the last year
Figure 2: Number of switches per month, with and without using the Current Account Switch Service, September 2013-May 2018
Open Banking will disrupt the market
Companies and brands
Lloyds Banking Group is largest group current account provider
Figure 3: Current account providers, by share of main and other current account market, May 2018
Consolidating to stay ahead of the curve
Challengers incentivise recommendations
The consumer
Two thirds have heard of at least one challenger brand
Figure 4: Awareness of challenger brands, May 2018
23% who have heard of a challenger brand have used one
Figure 5: Use of challenger brands, May 2018
Savings accounts can be an inroad for further usage
Figure 6: Likelihood of considering using a challenger brand, May 2018
Unfamiliarity is a barrier to uptake
Figure 7: Barriers to using a challenger brand, May 2018
Financial benefits most likely to convince people
Figure 8: Reasons for using a challenger brand over a long-established provider, May 2018
Consumers need help to filter relevant brands
Figure 9: Attitudes towards challenger brands, May 2018
What we think
ISSUES AND INSIGHTS
Challengers will have to explore new ways to establish awareness and trust
The facts
The implications
Concerns about using challengers can be overcome with financial incentives
The facts
The implications
THE MARKET WHAT YOU NEED TO KNOW
Number of accounts rises with population
Current account switches have risen in the last year
Open Banking will disrupt the market
MARKET DRIVERS
Number of accounts rises with population
Figure 10: Estimated number of current accounts in the UK, 2015-18*
Current account switches have risen in the last year
Figure 11: Number of switches per month, with and without using the Current Account Switch Service, September 2013-May 2018
REGULATORY AND LEGISLATIVE CHANGES
Open Banking will disrupt the market
Open Banking builds on EU PSD2 regulation
Insurers required to prompt longstanding customers to shop around
FCA investigates mortgage competition
and is set to publish Approach to Competition Report
FCAs Project Innovate continues
COMPANIES AND BRANDS WHAT YOU NEED TO KNOW
Lloyds Banking Group is largest group current account provider
Consolidating to stay ahead of the curve
Challengers incentivise recommendations
MARKET SHARE
Lloyds Banking Group is largest group current account provider
Greatest change in the other account market
Figure 12: Current account providers, by share of main and other current account market, May 2018
COMPETITIVE STRATEGIES
Consolidating to stay ahead of the curve
Niche firms look to take on banking heavyweights by extending their services
FinTechs seek mutually beneficial partnerships
Challengers incentivise recommendations
THE CONSUMER WHAT YOU NEED TO KNOW
Two thirds have heard of at least one challenger brand
Savings accounts can be an inroad for further usage
Unfamiliarity is a barrier to uptake
Financial benefits most likely to convince people
Consumers need help to filter relevant brands
AWARENESS OF CHALLENGER BRANDS
Two thirds have heard of at least one challenger brand
Figure 13: Awareness of challenger brands, May 2018
Opportunities to build awareness outside of London
Figure 14: Awareness of challenger brands, by region, May 2018
People are generally aware of only one or two challenger brands
Figure 15: Number of challenger brands aware of, by age, May 2018
USE OF CHALLENGER BRANDS
23% who have heard of a challenger brand have used one
Figure 16: Use of challenger brands, May 2018
Revolut is most successful at converting customers
23% who have heard of a digital-only bank have used one
Figure 17: Use of challenger brands, by awareness of challenger brands, May 2018
CHALLENGER BRAND CONSIDERATION
Savings accounts can be an inroad for further use
Figure 18: Likelihood of considering using a challenger brand, May 2018
Insurance challengers have a good chance, but will need to compete on price
18-24-year-olds most likely to consider a challenger brand
Figure 19: Likelihood of considering using a challenger brand, by age, May 2018
One in four would consider a challenger for six or more products
Figure 20: Number of products people are likely to consider a challenger brand for, May 2018
BARRIERS TO USING A CHALLENGER BRAND
Unfamiliarity is a barrier to uptake
Figure 21: Barriers to using a challenger brand, May 2018
Recent IT issues have affected consumer perceptions
Open Banking can reduce inertia
18-34-year-olds have fewer concerns
Figure 22: Barriers to using a challenger brand, by age, May 2018
REASONS FOR CHOOSING A CHALLENGER BRAND
Financial benefits most likely to convince people
Figure 23: Reasons for using a challenger brand over a long-established provider, May 2018
Recommendations are key to growth
Good customer service will minimise concerns about face-to-face access
Figure 24: Reasons for using a challenger brand, by barriers to using a challenger brand, May 2018
ATTITUDES TOWARDS CHALLENGER BRANDS
New providers need to build trust
Consumers need help to filter relevant brands
Figure 25: Attitudes towards challenger brands, May 2018
Three in five want the best online and mobile experiences
Challenger users more likely to prioritise online/mobile banking
Figure 26: Use of challenger brands, by agreement with the statement It is important for me to use a provider with the best online and mobile experiences, May 2018
Established brands can refer customers to challengers to maintain satisfaction
Figure 27: Agreement with the statement I would be more likely to use a newly launched financial services provider if I was introduced to it by my main bank, by likelihood to consider a challenger brand, May 2018
APPENDIX DATA SOURCES, ABBREVIATIONS, AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

Make an enquiry before buying this Report

Please fill the enquiry form below.

  • Full Name *
  • Your Email *
  • Job Title
  • Company
  • Phone No. * (Pls. Affix Country Code)
  • Message
  • Security Code *