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

Consumers and Retail Banking - UK - September 2017

Published By :

Mintel

Published Date : Sep 2017

Category :

Banking

No. of Pages : N/A

People who are considering switching banks are the most likely to opt in to sharing their financial data with third parties. This suggests that upcoming Open Banking regulations may help to boost competition in the retail banking sector, as those in the market for a new provider could be won over by personalised deals and a streamlined application process.
However, the implementation of Open Banking is unlikely to suddenly lead to a flurry of switching activity, with only 6% of current account holders saying they are very likely to move banks in the next year
Table of contents

OVERVIEW
What you need to know
Scope of this Report
EXECUTIVE SUMMARY
The market
Regulators aim to boost competition
Aggregation could reduce the big banks advantage
Companies and brands
Big banks remain dominant
Figure 1: Top six main current account providers, by banking groups, June 2017
The consumer
Only a quarter of savers hold an account with another provider
Figure 2: Financial product ownership and cross-sales, June 2017
Less than one in five people are likely to switch banks
Figure 3: Current account holders switching intentions, June 2017
Half of consumers have no major frustrations with their bank
Figure 4: Consumers frustrations with their main current account provider, June 2017
Fees/charges have biggest influence on choice of current account
Figure 5: Important factors when choosing a new current account provider, June 2017
Nearly three in four people have concerns about switching bank
Figure 6: Barriers to switching main current account provider, June 2017
Two thirds of current account holders could be encouraged to share data
Figure 7: Open Banking incentives, June 2017
What we think
ISSUES AND INSIGHTS
Switching bank: more hassle than its worth?
The facts
The implications
Its not all about the money
The facts
The implications
The changing role of the bank
The facts
The implications
THE MARKET WHAT YOU NEED TO KNOW
Regulators aim to boost competition
Aggregation could reduce the big banks advantage
Low interest rates polarise consumers
Concerns over increased borrowing
ECONOMIC AND REGULATORY ENVIRONMENT
Regulators aim to boost competition
Aggregation could reduce the big banks advantage
but will consumers opt in?
Making the most of a challenging economic environment
Figure 8: Headline CPI inflation and average weekly earnings (12-month percentage change), May 2014-May 2017
Open Banking to open up opportunities
MARKET OVERVIEW
CASS has completed over 3.7 million switches
Figure 9: Number of switches per month since launch of CASS, September 2013-May 2017
Low interest rates polarise consumers
Figure 10: UK interest rates, January 2012-May 2017
Low rates disincentivise saving activity
and encourage people to look beyond traditional savings products
Figure 11: Impact of low interest rate on motivation to save and product choices/considerations, April 2017
There is still a stigma associated with borrowing
although some forms of debt are seen as more acceptable
Figure 12: Annual gross and net credit card lending, not seasonally adjusted, 2010-16
Figure 13: Annual gross and net other consumer credit lending, not seasonally adjusted, 2010-16
Surge in remortgaging as borrowers look to lock in low rates
Figure 14: Gross and net mortgage lending, not seasonally adjusted, 2012-16
COMPANIES AND BRANDS WHAT YOU NEED TO KNOW
Big banks remain dominant
Reacting to consumers changing channel preferences
Cost pressures force banks to water down ongoing rewards
Nationwide becomes the industrys largest ATL spender
MARKET SHARE
Big banks remain dominant
Figure 15: Top six main current account providers (including netted banking groups), June 2017
Nearly one in six people say Barclays is their main bank
Figure 16: Consumers' main current account provider, June 2017
COMPETITIVE STRATEGIES
Reacting to consumers changing channel preferences
Digitising the bank branch
Lloyds
Nationwide
Figure 17: Nationwide NOW branch service
Santander
Iam Bank
Switching pays off
but cost pressures force banks to water down ongoing rewards
The customer is king
Royal Bank of Scotland
Barclays
Lloyds Banking Group
Santander
Challengers prepare for Open Banking
Starling Bank
Figure 18: Starling Bank app UI shown on an iPhone
Atom Bank
Monzo
Figure 19: Monzo prepaid debit card and mobile transaction notification
Bud Financial
Figure 20: Bud Financial app UI
ADVERTISING AND MARKETING ACTIVITY
Nationwide becomes the industrys largest ATL spender
Figure 21: Top 10 highest-spending retail banks/building societies for recorded above-the-line, online display and direct mail advertising expenditure on retail banking, 2015-17*
Providers ATL campaigns focus on brand building
Figure 22: 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, 2015-17*
TV accounts for nearly half of ATL expenditure
Figure 23: 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, May 2016-June 2017
Nielsen Ad Intel coverage
THE CONSUMER WHAT YOU NEED TO KNOW
Open Banking could create a more open marketplace
Less than one in five people are likely to switch banks
Potential switchers may be put off
Half of consumers have no major frustrations with their bank
A poor online service can be the catalyst for churn
Fees/charges have biggest influence on choice of current account
Two thirds of current account holders could be encouraged to share data
PRODUCT OWNERSHIP AND CROSS-SALES
Current account ownership is near universal
Figure 24: Current account ownership, June 2017
Only a quarter of savers hold an account with another provider
Figure 25: Financial product ownership and cross-sales, June 2017
Open Banking could create a more open marketplace
Figure 26: Repertoire of financial products owned, June 2017
Nationwide and Halifax among the leaders at cross-selling
Figure 27: Repertoire of financial products owned with main provider, by selected providers, June 2017
SWITCHING INTENTIONS
Less than one in five people are likely to switch banks
but prompts could encourage more to review their accounts
Figure 28: Current account holders switching intentions, June 2017
A third of Millennials are weighing up a move
Figure 29: Current account holders switching intentions, by generation, June 2017
HSBC customers frustrated by branch closures
Figure 30: Current account holders switching intentions, by main provider, June 2017
Potential switchers may be put off
Figure 31: Barriers to switching current account, by current account holders switching intentions, June 2017
CONSUMER PAIN POINTS
Half of consumers have no major frustrations with their bank
Figure 32: Consumers frustrations with their main current account provider, June 2017
Millennials most likely to have frustrations with their bank
Figure 33: Proportion of consumers who have frustrations with their main current account provider, by generation, June 2017
A poor online service can be the catalyst for churn
IMPORTANT FACTORS WHEN CHOOSING PROVIDER
Fees/charges have biggest influence on choice of current account
Figure 34: Important factors when choosing a new current account provider, June 2017
Interest rates are low on young consumers priority list
Figure 35: Important factors when choosing a new current account provider, by age, June 2017
Opening offers most likely to influence potential switchers
Figure 36: Important factors when choosing a new current account provider, by consumers who are very likely to switch current account provider in the next 12 months, June 2017
BARRIERS TO SWITCHING
Nearly three in four people have concerns about switching bank
Consumers are still sceptical
Figure 37: Barriers to switching main current account provider, June 2017
Time is of the essence for Millennials
Figure 38: Barriers to switching main current account provider, by generation, June 2017
OPEN BANKING INCENTIVES
Two thirds of current account holders could be encouraged to share data
Getting a good value exchange
Figure 39: Open Banking incentives, June 2017
Financial support
Personalised offers
Figure 40: Tail screenshot and example of a notification when paying via Starling Bank
Fast approval
Potential switchers are the most engaged in Open Banking
Figure 41: Proportion of consumers who could be encouraged to share data in exchange for any of the surveyed incentives, by likeliness of switching current account provider, June 2017
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 *