Five Key Trends
Essential. A current account is an essential personal finance product and 94% of the adult population has one. But this leaves little room for organic growth.
Competition. The top five major banking groups dominate this market (87% of adults' main current account is with one of the top five) making it particularly hard for smaller players to break in.
Satisfaction. Despite the headlines around financial services providers, the majority of people (75%) are satisfied with their existing accounts.
Loyalty. Only 23% of people think their bank rewards their loyalty but consumers are unlikely to switch providers without a good reason.
Packaged accounts. While banks have been encouraging users to upgrade to fee-based packaged accounts the concept of free-if-in-credit is firmly entrenched in the British psyche. Only about 14% of adults use a packaged or premium account as their main account.
Online banking. Although branches are still the most widely used banking channel, online is now the most frequently used channel (mainly as an account management tool).
Share of main current account holder customer base by banking group, April 2012
Base: 1,880 internet users aged 16+ who have a current account
Important factors when choosing a current account, April 2012 (%)
Base: 2000 internet users aged 16+ Source: GMI/Mintel
The Industry's Main Players
Catherine Kehoe, brands and marketing director, Lloyds Banking Group
Kehoe joined Lloyds TSB in 2007 from Yell where she had held the marketing director role covering Yellow Pages, yell.com and 118247. Her responsibility covers brand strategy across Lloyds TSB, Halifax and Bank of Scotland brands among others.
Les Matheson, managing director of products and marketing, RBS Retail
Matheson has held this role since 2009. He is responsible for product marketing for the NatWest and RBS brands among other things. Previous positions including working overseas in Asia Pacific and Australia for St George Bank and Citibank.
Sara Bennison, marketing communications director, Barclays
Bennison spent the first 18 years of her career working on the agency side: first with JWT and then others including D'Arcy and Bates. Her last agency job was as a managing partner at Grey, heading account management. She worked briefly at BT before taking her current job at Barclays UK Retail Bank. She is responsible for all the advertising, brand and branch marketing elements of the business.
Sarah Threadgould, head of marketing, HSBC
With responsibility for advertising, branch, digital, CRM and sponsorship activity, Threadgould has been head of marketing at HSBC since February 2011. Prior to this she worked at M&S in a variety of marketing and business development roles. She began her career as a brand manager at P&G.
Keith Moor, director brand and communications, Santander UK
Moor began his career in direct insurance joining Abbey in 1995 and leading marketing since 2008. He was responsible for bringing the Abbey, Bradford & Bingley and Alliance & Leicester brands into the single Santander brand.
Winners and Losers in the current and packaged accounts sector
Co-op. The ethical bank has bought the 632 Lloyds branches the EU required Lloyds to sell as a result of its £20bn state aid. This will take Co-op's branches up to 1,000 (about 7% of the current market).
M&S Bank. In July 2012 the retailer launched its current account showing that non-traditional providers may be a threat to the established banks, thanks to its existing network of retail locations. It is offering two premium current accounts with monthly charges of £20 or £15 depending on the benefits offered.
Lloyds. It lost market share for the second consecutive year according to GMI/Mintel consumer research figures making it no longer the clear market leader with 15% share (April 2012).
|Barclays. In terms of market share and innovation Barclays has done well: its share rose 2% between 2011 and 2012 (GMI/Mintel) and it introduced a DIY current account with benefit options. But the libor scandal and Bob Diamond-scale bonuses have ensured a constant stream of negative headlines that no brand would wish for.