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Description

Description

“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.”
– Jessica Galletley, Senior Financial Services Analyst

This report looks at the following areas:

  • Challengers will have to explore new ways to establish awareness and trust
  • Concerns about using challengers can be overcome with financial incentives

What's included

What's included

Table of contents

Table of contents

  1. 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
                                                      • FCA’s 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

                                                                                                    About the report

                                                                                                    This report will give you a complete 360-degree view of your market. Not only is it rooted in robust proprietary and high-quality third-party data, but our industry experts put that data into context and you’ll quickly understand:

                                                                                                    • The Consumer

                                                                                                      What They Want. Why They Want It.

                                                                                                    • The Competitors

                                                                                                      Who’s Winning. How To Stay Ahead.

                                                                                                    • The Market

                                                                                                      Size, Segments, Shares And Forecasts: How It All Adds Up.

                                                                                                    • The Innovations

                                                                                                      New Ideas. New Products. New Potential.

                                                                                                    • The Opportunities

                                                                                                      Where The White Space Is. How To Make It Yours.

                                                                                                    • The Trends

                                                                                                      What’s Shaping Demand – Today And Tomorrow.

                                                                                                    Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

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