2022
9
UK Current Accounts Market Report 2022
2022-12-22T03:05:18+00:00
OX1100525
2195
158868
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Report
en_GB
“Cash switching incentives will become more appealing as consumers look for money-saving opportunities through the cost-of-living crisis. Interest-free buffer overdrafts will be important to help struggling customers and boost loyalty.

UK Current Accounts Market Report 2022

£ 2,195 (Excl.Tax)

Description

UK Current Accounts Market Landscape      

The rising cost of living is placing a strain on the finances of many consumers. Providers in the UK current account market will have to consider offering interest-free buffers to help people navigate the difficult economic environment. We have already seen HSBC and First Direct introduce such offers, similar to the support offered by banks during the COVID-19 pandemic. Many adults anticipate that they will increase how often they use their debit overdraft this year, highlighting an opportunity to expand additional flexibility.

 

UK Current Accounts Market Share and Key Industry Trends

Digital banks continue to threaten the dominance of the UK retail banking market. Challengers such as Monzo, Revolut and Starling have disrupted traditional financial services and driven innovation, particularly in mobile banking apps. The UK retail banking market has responded with upgrades and new features, but there is still strong demand for digital accounts and an easy-to-use banking app.

  • UK current accounts market share: Traditional banking providers continue to dominate the market. Overall, the top six banking groups and providers hold an 87% share of the UK current account market.
  • UK current accounts market size: Mintel estimates that there were 75.6 million current accounts in the UK in July 2022.
  • UK current accounts market innovation: 35% of consumers agree that competitive interest rates are an important factor when choosing a new current account.
  • UK current accounts market trends: 20% of adults with current accounts say they expect to increase how often they use their overdraft in the next year.

 

UK Current Accounts Market Future Trends

In the longer term, despite the consumer emphasis on cost-cutting to navigate the cost of living crisis, there remain strong opportunities to boost feepaying account ownership to consumers. The retail banking market can capitalise on consumer interest of reward accounts, such as providing cashback offers. It is important that banks clearly communicate the net savings benefits of feepaying accounts and help consumers maximise the utility of their accounts.

To discover more about the UK Current Accounts Market Report 2022, read our UK Attitudes Towards Debt and Credit Market Report 2022, or take a look at our Financial Services Market Research Reports.

 

Quickly Understand

  • Ownership of current accounts and the type of accounts consumers hold.
  • Explores UK current account market share and size.
  • Consumer switching behaviour in the next 12 months.
  • Important factors when choosing a current account.
  • Attitudes towards current accounts.
  • Explores UK retail banking market analysis and trends.

 

Covered in this Report

Brands: Santander, Lloyds, Natwest, Monzo, Sterling, The Post Office, HSBC, Chase, Nutmeg, Citigroup, Revolut, Kroo, Barclays, Nationwide, Tesco Bank, MasterCard, First Direct, Virgin Money, Bacs Payment Schemes.

Products: Basic current account, standard current account, student and graduate account, premium or packaged current account, reward current account.

 

Expert Analysis from a Specialist in the Financial Services Sector

This report, written by Adrian Reynolds, a leading analyst in the financial services sector, delivers in-depth commentary and analysis to highlight current trends in the retail banking market and add expert context to the numbers.

Cash switching incentives will become more appealing as consumers look for money-saving opportunities through the cost of living crisis. Interest-free buffer overdrafts will be important to help struggling customers and boost loyalty. Despite consumer cost-cutting, there is potential for growth in fee-paying accounts if banks can highlight rewards and net cost-saving opportunities.”

Adrian Reynolds

Adrian Reynolds
Financial Services – Senior Analyst

Table of Contents

  1. Overview

    • Key issues covered in this Report
    • Products covered in this Report
  2. Executive Summary

    • The market
    • Multi-account ownership continues to grow
    • Cash incentives help to drive higher levels of switching
      • Figure 1: Number of switches per month using the CASS, 2019-22
    • Shift towards online continues, but branches continue to play a key role
      • Figure 2: Number of branches in the UK, 2015-21
    • Companies and brands
    • High-street incumbents continue to dominate main account market
      • Figure 3: Proportion of customers holding accounts with different types of banking providers by main and additional current accounts, 2022
    • Current account adspend has surpassed pre-pandemic levels
      • Figure 4: Total above-the line, online display and direct mail advertising expenditure on current accounts, 2017-22
    • The consumer
    • Nearly all adult Brits have current accounts
      • Figure 5: Current account ownership, 2022
    • Separate accounts helping consumers organise savings
      • Figure 6: Reasons for having separate current accounts, 2022
    • Promote opportunities to save money with fee-paying accounts
      • Figure 7: Type of current account held, 2022
    • Highlight the ease of CASS to capitalise on switching intention
      • Figure 8: Likelihood of switching main account, 2022
    • Boost financial rewards to drive switching activity
      • Figure 9: Important features when choosing between current accounts, 2022
    • Help customers navigate rising costs with interest-free buffers
      • Figure 10: Attitudes towards current accounts, 2022
  3. Issues and Insights

    • Highlight the net cost savings of fee-paying accounts
    • Raise awareness of the ease of switching to capitalise on consumer interest
    • Interest in ethical accounts will only be realised with competitive features
  4. Market Size and Performance

    • Multi-account ownership continues to grow
      • Figure 11: Estimated number of current accounts, 2018-22
    • Learnings from the last income squeeze
  5. Market Drivers

    • Inflation is the key concern for consumers and brands…
      • Figure 12: CPI and CPIH, 2019-22
    • …and despite government support, energy prices are still a major concern
    • Rising interest rates increase pressure on household finances
    • Consumer spending power will be curbed
    • Consumers’ financial wellbeing has fallen from the highs of 2021…
      • Figure 13: Financial confidence over the coming year, 2019-22
    • …and most people are feeling the effects of price rises
    • Interest rates will drive more focus on savings activity
      • Figure 14: Bank of England base rate, 2017-22
    • Overdraft use is set to increase as cost of living bites
      • Figure 15: Monthly interest rate of overdrafts to households among UK monetary financial institutions, 2019-22
    • Cash incentives help to drive higher levels of switching
      • Figure 16: Number of switches per month using the CASS, 2019-2022
    • Shift towards online continues, but branches continue to play a key role
      • Figure 17: Number of branches in the UK, 2015-21
  6. Regulatory and Legislative Changes

    • FCA’s Consumer Duty will increase focus on customer support
    • FCA updates guidelines as more bank branches close
    • Expanded powers for FCA on ensuring access to cash
    • A new entity will lead further development of Open Banking
    • Open Banking adoption could benefit as FCA drops the 90-day rule
  7. Market Share

    • High-street incumbents continue to dominate main account market
      • Figure 18: Proportion of customers holding accounts with different types of banking providers by main and additional current accounts, 2022
    • …but digital challengers are making a mark in share of additional accounts
      • Figure 19: Current account providers by customer use of main and other current accounts, 2022
  8. Competitive Strategies and Launch Activity

    • Attention turns to high interest and rewards with Santander Edge Account
    • Banks increasing cash switching incentives to attract new customers
    • Banks continue to close branches
    • More shared bank hubs are being rolled out
    • Barclays reduces overdraft support for those not using the service
    • Chase reports attracting 1 million UK customers during its first year
    • Digital bank Kroo gains banking licence and launches new account
    • Starling Bank launches free budget planner
    • Revolut launches instant messaging feature
    • Citi plans to close UK retail bank
  9. Advertising and Marketing Activity

    • Current account adspend has surpassed pre-pandemic levels
      • Figure 20: Total above-the line, online display and direct mail advertising expenditure on current accounts, 2017-22
      • Figure 21: Above-the line, online display and direct mail advertising expenditure on current accounts, by spend category, 2017-22
    • Banks focus ad campaigns on support during the cost-of-living crisis
    • Digital banks continue to challenge with Starling and Revolut boosting ad spend
      • Figure 22: Top 10 advertisers of above-the-line, online display and direct mail advertising expenditure on current accounts, 2020/21–2021/22
    • Television is coming under increasing pressure from digital advertising
      • Figure 23: Total above-the-line, online display and direct mail advertising expenditure on current accounts, by advertising medium, 2027/18-2021/22
    • Nielsen Ad Intel coverage
  10. Current Account Ownership

    • Nearly all adult Brits have current accounts
      • Figure 24: Current account ownership, 2022
    • Current accounts will remain vital for the foreseeable future
      • Figure 25: Current account ownership, 2018-22
    • Offer shared accounts to reflect modern lifestyles
      • Figure 26: Account ownership, by age, 2022
  11. Reasons for Holding a Separate Current Account

    • Separate accounts helping consumers organise savings
      • Figure 27: Reasons for having separate current accounts, 2022
    • Promote savings tools to attract new customers to digital banks
      • Figure 28: Reasons for having separate current accounts, by age, 2022
  12. Types of Current Account

    • Promote opportunities to save money with fee-paying accounts
      • Figure 29: Type of current account held, 2022
    • Highlight how consumers can benefit from paying in their salary
      • Figure 30: Ownership of selected types of current account, by age, 2022
    • Offer tailored fee-paying accounts to younger consumers
      • Figure 31: Ownership of fee-paying current accounts, by age, 2022
  13. Appetite for Switching Current Accounts

    • Highlight the ease of CASS to capitalise on switching intention
      • Figure 32: Likelihood of switching main account, 2022
    • Older consumers will take more convincing to change accounts
    • Avoid stereotyping to engage women more in account switching
      • Figure 33: Likelihood of switching main account, by age, 2022
    • Incentivise cost-of-living support to drive switching activity
      • Figure 34: Switching activity in the last 12 months, by selected demographics, 2022
  14. Important Factors when Switching Current Accounts

    • Boost financial rewards to drive switching activity
    • Interest rates could grow in importance
    • Do not underestimate the importance of mobile banking app design
      • Figure 35: Important features when choosing between current accounts, 2022
  15. Current Account Attitudes and Behaviours

    • Help customers navigate rising costs with interest-free buffers
    • Ethical accounts must still offer competitive features
      • Figure 36: Attitudes towards current accounts, 2022
    • Highlight the net savings offered by fee-paying accounts
      • Figure 37: Attitudes towards fee-paying current accounts, 2022
  16. Appendix – Data Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

Market

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Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

Brand/Company

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Data

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*databooks not available with UK B2B Industry reports.

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