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Current Accounts - Ireland - October 2016

“The conclusion at first glance is that the Irish current account market emerged relatively unscathed from the financial crisis and subsequent recession – current account ownership is almost universal among both NI and RoI consumers. However, despite the return of economic growth, the number of active current accounts in RoI has been declining for several years as RoI consumers respond to unavoidable and increasing fees and charges.”
– Brian O’Connor, Senior Consumer Analyst

This Report covers the following topics:

  • Little inclination on the part of consumers to switch accounts
  • Monetary incentives most likely to persuade consumers to pay a fee
  • Fees and charges putting brakes on account ownership in RoI

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Table of contents

  1. Overview

    • What you need to know
      • Issues covered in this Report
        • Definitions
        • Executive Summary

            • The market
              • Around 7 million active current accounts across Ireland
                • Figure 1: Total number of active current accounts, IoI, RoI, and NI, 2011-16
              • Forecast
                • Figure 2: Indexed total number of active current accounts, IoI, RoI, and NI, 2011-21
              • Market factors
                • Both economies continuing to grow – but uncertainties lie ahead
                  • Switching more popular among UK (including NI) than RoI consumers
                    • Increase in the number of complaints about current accounts
                      • Competitive strategies
                        • The consumer
                          • Vast majority of consumers have at least one current account
                            • Figure 3: Number of current accounts owned by consumers, NI and RoI, August 2016
                          • Seven major current account providers in NI
                            • Figure 4: Bank or financial institution where main current account is held, NI, August 2016
                            • Figure 5: Bank or financial institution where other current accounts are held, NI, August 2016
                          • ‘Main’ current account market in RoI controlled by AIB and BOI
                            • Figure 6: Bank or financial institution where main current account is held, RoI, August 2016
                            • Figure 7: Bank or financial institution where other current accounts are held, NI, August 2016
                          • Switching activity limited among Irish consumers
                            • Figure 8: If consumers have switched their main current account provider, August 2016
                          • Willingness to pay monthly fee for additional features
                            • Figure 9: Features that consumers would be willing to pay a monthly fee to have as part of their current account, August 2016
                          • What it means
                          • Issues and Insights

                            • Little inclination on the part of consumers to switch accounts
                              • The facts
                                • The implications
                                  • Monetary incentives most likely to persuade consumers to pay a fee
                                    • The facts
                                      • The implications
                                        • Fees and charges putting brakes on account ownership in RoI
                                          • The facts
                                            • The implications
                                            • The Market – What You Need to Know

                                              • Both economies continuing to grow – but uncertainties lie ahead
                                                • Switching more popular among UK (including NI) than RoI consumers
                                                  • Increase in the number of complaints about current accounts
                                                  • Market Size and Forecast

                                                    • Almost 7 million active current accounts in 2016
                                                      • Figure 10: Total number of active current accounts, IoI, RoI, and NI, 2011-21
                                                    • RoI market contracting, NI growing since economic downturn
                                                      • Modest increase in number of active accounts likely in coming years
                                                        • Figure 11: Index of total number of active current accounts, actual, forecast and projected, IoI, RoI, and NI, 2011-21
                                                    • Market Drivers

                                                      • NI economic growth to fall to 1% in 2016, 0.2% in 2017
                                                        • RoI economic growth forecast at 4.8% in 2016, 3.8% in 2017
                                                          • Limited use of current account switching process in RoI
                                                            • Figure 12: Number of current accounts switched, RoI, 2011-15
                                                          • More than 1 million switches in UK (including NI) from mid-2015 to mid-2016
                                                            • Figure 13: Number of current account switches, UK (including NI), Q4 2014-Q2 2016
                                                          • Slightly above-average awareness among NI consumers
                                                            • NI-based providers experiencing net switching losses
                                                              • Figure 14: Switching gains and losses, UK (including NI) institutions, Q4 2015
                                                            • UK (including NI) complaints about current accounts up 66% in 2015/2016
                                                              • Figure 15: Complaints about current accounts received by Financial Ombudsman, UK (including NI), 2012-16*
                                                              • Figure 16: Complaints about packaged accounts received by Financial Ombudsman, UK (including NI), 2012-16*
                                                            • Complaints from RoI consumers about current accounts up 6% in 2015
                                                              • Figure 17: Complaints pertaining to bank accounts received by Financial Services Ombudsman, RoI, 2011-15
                                                              • Figure 18: Complaints about banking by product type received by Financial Services Ombudsman (Ireland), RoI, 2015
                                                            • Complaints about current accounts to providers on the rise
                                                              • Figure 19: Number of complaints about current accounts, RoI, H1 2013-H1 2015
                                                              • Figure 20: Complaints about current account, by complaint type, RoI, H1 2015
                                                          • Competitive Strategies – What You Need to Know

                                                            • Santander launches 123 Lite for less affluent consumers
                                                              • Danske Bank launches first NI rewards account
                                                                • Halifax launches attractive cash incentive to new switchers
                                                                  • Nationwide offers high interest rate account to target savers
                                                                    • Tesco drops current account fees
                                                                    • Competitive Strategies

                                                                      • Halifax seeks to attract switchers with cash incentive
                                                                        • Nationwide offers high interest rate to appeal to savers
                                                                          • M&S rewards existing current account holders
                                                                            • Tesco drops monthly current account fee
                                                                              • Bank of Ireland launches online current account service
                                                                                • HSBC brings back £200 ‘switch and stay’ scheme
                                                                                • The Consumer – What You Need to Know

                                                                                  • Vast majority of consumers have a current account
                                                                                    • Seven major current account providers in NI
                                                                                      • ‘Main’ current account market in RoI controlled by AIB and BOI
                                                                                        • Switching activity limited among Irish consumers
                                                                                          • Willingness to pay monthly fee for additional features
                                                                                          • The Consumer – Ownership of Current Accounts

                                                                                              • Current account ownership almost universal
                                                                                                • Figure 21: Number of current accounts owned by consumers, NI and RoI, August 2016
                                                                                              • More than a third of all consumer have multiple current accounts
                                                                                                • Consumers with children more likely to have two current accounts
                                                                                                  • Figure 22: Consumers who have two current accounts, by presence of children in the household, NI and RoI, August 2016
                                                                                                • ABC1s more inclined than C2DEFs to have three or more accounts
                                                                                                  • Figure 23: Consumers who have three or more current accounts, by social class, NI and RoI, August 2016
                                                                                              • The Consumer – Where Current Accounts Are Held

                                                                                                  • Four major, three minor providers of main current accounts in NI
                                                                                                    • Figure 24: Bank or financial institution where main current account is held, NI, August 2016
                                                                                                  • Six major providers in other or non-main current account market in NI
                                                                                                    • Figure 25: Bank or financial institution where other current accounts are held, NI, August 2016
                                                                                                  • RoI’s main current account market dominated by two providers
                                                                                                    • Figure 26: Bank or financial institution where main current account is held, RoI, August 2016
                                                                                                  • Credit unions lead the field in the non-main/other current account market
                                                                                                    • Figure 27: Bank or financial institution where other current accounts are held, RoI, August 2016
                                                                                                • The Consumer – Switching Activity

                                                                                                    • 44% of NI, 31% of RoI consumers have switched provider
                                                                                                      • Figure 28: If consumers have switched their main current account provider, August 2016
                                                                                                    • Around half of all switchers did so more than 5 years ago
                                                                                                      • Churn highest among ABC1s and younger consumers
                                                                                                        • Figure 29: Consumers who have never switched their main current account provider, by age and social class, August 2016
                                                                                                    • The Consumer – Interest in Extra Features

                                                                                                      • Some interest among consumers in additional current account features
                                                                                                        • Figure 30: Features that consumers would be willing to pay a monthly fee to have as part of their current account, August 2016
                                                                                                      • Women and 35-44s most interested in monetary incentives
                                                                                                        • Figure 31: Consumers who would be willing to pay a monthly fee to have a one-off cash incentive as part of their current account, by gender and age, August 2016
                                                                                                      • Protection against fraudulent activity most appealing to C2DEFs
                                                                                                        • Figure 32: Consumers who would be willing to pay a monthly fee to have a card protection as part of their current account, by social class, August 2016
                                                                                                        • Figure 33: Consumers who would be willing to pay a monthly fee to have ID theft protection as part of their current account, by social class, August 2016
                                                                                                      • Older consumers want travel insurance, younger want gadget cover
                                                                                                          • Figure 34: Consumers who would be willing to pay a monthly fee to have annual travel insurance as part of their current account, by gender and age, August 2016
                                                                                                          • Figure 35: Consumers who would be willing to pay a monthly fee to have mobile phone or gadget insurance as part of their current account, by gender and age, August 2016
                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                        • Data sources
                                                                                                          • Generational cohort definitions
                                                                                                            • Abbreviations
                                                                                                            • Appendix – The Consumer

                                                                                                              • NI Toluna data
                                                                                                                • Figure 36: Number of current accounts owned by consumers, by demographics, NI, August 2016
                                                                                                                • Figure 37: Bank or financial institution where main current account is held, by demographics, NI, August 2016
                                                                                                                • Figure 38: Bank or financial institution where main current account is held, by demographics, NI, August 2016(continued)
                                                                                                                • Figure 39: Bank or financial institution where main current account is held, by demographics, NI, August 2016(continued)
                                                                                                                • Figure 40: Bank or financial institution where other current accounts are held, by demographics, NI, August 2016
                                                                                                                • Figure 41: Bank or financial institution where other current accounts are held, by demographics, NI, August 2016(continued)
                                                                                                                • Figure 42: Bank or financial institution where other current accounts are held, by demographics, NI, August 2016(continued)
                                                                                                                • Figure 43: If consumers have switched their main current account provider, by demographics, NI, August 2016
                                                                                                                • Figure 44: Features that consumers would be willing to pay a monthly fee to have as part of their current account, by demographics, NI, August 2016
                                                                                                                • Figure 45: Features that consumers would be willing to pay a monthly fee to have as part of their current account, by demographics, NI, August 2016(continued)
                                                                                                                • Figure 46: Features that consumers would be willing to pay a monthly fee to have as part of their current account, by demographics, NI, August 2016(continued)
                                                                                                              • RoI Toluna data
                                                                                                                • Figure 47: Number of current accounts owned by consumers, by demographics, RoI, August 2016
                                                                                                                • Figure 48: Bank or financial institution where main current account is held, by demographics, RoI, August 2016
                                                                                                                • Figure 49: Bank or financial institution where main current account is held, by demographics, RoI, August 2016(continued)
                                                                                                                • Figure 50: Bank or financial institution where main current account is held, by demographics, RoI, August 2016(continued)
                                                                                                                • Figure 51: Bank or financial institution where other current accounts are held, by demographics, RoI, August 2016
                                                                                                                • Figure 52: Bank or financial institution where other current accounts are held, by demographics, RoI, August 2016(continued)
                                                                                                                • Figure 53: Bank or financial institution where other current accounts are held, by demographics, RoI, August 2016(continued)
                                                                                                                • Figure 54: If consumers have switched their main current account provider, by demographics, RoI, August 2016
                                                                                                                • Figure 55: Features that consumers would be willing to pay a monthly fee to have as part of their current account, by demographics, RoI, August 2016
                                                                                                                • Figure 56: Features that consumers would be willing to pay a monthly fee to have as part of their current account, by demographics, RoI, August 2016(continued)
                                                                                                                • Figure 57: Features that consumers would be willing to pay a monthly fee to have as part of their current account, by demographics, RoI, August 2016(continued)

                                                                                                            Current Accounts - Ireland - October 2016

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