UK Current Accounts market report
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Providing the most comprehensive and up-to-date information and analysis of the Current Accounts market, and the behaviours, preferences and habits of the consumer.
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Products covered in this report
The focus of this Report is on retail current accounts, including packaged accounts for mass-market customers. The Report does not cover premium or private bank accounts targeted at the mass affluent-to-high net worth customers in detail.
The predominant type of pricing model for current accounts in the UK is the free-if-in-credit (or ‘free banking’) model. This is where the customer does not pay any direct fees for having the account if in credit, or for core services such as direct debits and cheques. Interest is usually charged on any money borrowed via an overdraft, which can be either ‘authorised’ or ‘unauthorised’.
Current accounts can be classified into various sub-types:
- Basic current account – does not carry any charges as it is designed for those with a poor credit score. Customers can set up direct debits and are provided with a debit card, but the account typically does not come with an overdraft facility or in-credit interest.
- Standard current account – based on the free-if-in-credit model, it does not carry any charges provided there are sufficient funds in the account to meet any payments made.
- Student and graduate current accounts - variants of the free-if-in-credit model and may offer special features, such as an interest-free overdraft. For more detailed information on these products, please refer to Mintel’s Student Finance – UK, May 2017 Report.
- Premium or packaged current account – usually involves the customer being charged a monthly fee in return for a range of additional benefits, such as travel insurance and motor breakdown cover.
- Reward current account – usually offers a cash bonus or reward upon switching and offers cash rewards for paying in a set amount of money each month or for paying utility bills with the account.
- Offset current account linked to a mortgage – links a current account to a mortgage by allowing the cash held in the current account to reduce mortgage debt. Instead of earning in-credit interest, the mortgage interest payments are based on a reduced debt value, allowing the debt to be paid off quicker.
Advertising and Marketing Activity - Companies Covered
- Bacs Payment Schemes
- First Direct
- Lloyds Bank
- Nationwide Building Society
Expert analysis from a specialist in the field
Written by Douglas Kitchen, a leading analyst in the Financial Services sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.
The Open Banking initiative, which launched in January 2018, has the potential to massively increase competition in the market. To realise this, however, providers and regulators need to convince consumers of the benefits of opting-in, while product innovation needs to be developed with customer needs in mind.
Financial Services Analyst
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