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New market study, "The Future of Fee Based Banking Income", has been published

New Financial Services research report from Timetric is now available from Fast Market Research

 
PRLog - Jun. 1, 2012 - This report examines the market for fee-based retail banking products and services in the US, UK and Europe. Fee-based income is the revenue that banks earn from sources such as monthly account fees, and fees for late credit card payments or unauthorised overdrafts. Retail and commercial banking makes a significant contribution towards the overall income of some of the world's biggest banks in comparison with investment banking activity, and the contribution of the former looks set to continue in 2012. The other main source of income earned by retail banks is from interest payments on products like personal loans and credit cards. Both supply and demand for these types of products are in decline. The number of credit cards in circulation fell by nearly one million in 2011 y-o-y due to reduced demand for the product on the behalf of consumers, and reduced supply due to the tighter lending criteria. The decline in unsecured lending will reduce the amount of interest income earned, and this is likely to lead to a continued increase in lending interest rates, regardless of the level of the UK base rate.

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Full Report Details at
- http://www.fastmr.com/prod/390345_the_future_of_fee_based...
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Key Highlights

* Aiming to increase the amount of income from fee based products and services remains challenging from both a regulatory and market perspective
* There is a lack of willingness on behalf of consumers to pay additional fees either for cards or advice which they consider should be free
* The regulatory environment is becoming more restrictive, so banks will need to seek out new avenues of revenue
* Expect to see more outsourced income generation streams, but they will only succeed if they represent value for money to the consumer

Scope

* Legislation is squeezing bank retail margins just at a time when they need to maximise profitability. This report examines and discusses the current moves being taken by banks in response to dictats by regulators
* As is so often the case, what happens in the US tends to gravitate elsewhere so this market is examined in detail
* It is no longer just a providers market so the expectations of consumers across Europe are considered
* Bancassurance will make an increasing contribution to banking income and this is assessed

Reasons to Get this Report

* Understand the growing importance of generating fee-based income
* Move away from reliance on interest income as a main source of revenue
* Gain an in-depth understanding of how regulatory pressures will affect fee-based products
* Gauge consumer attitudes to fee-based products
* Measure the cost of compensation schemes

Companies Mentioned in this Report: Lloyds TSB, HSBC, RBS, Barclays, Metro Bank, Visa, Mastercard, JPMorgan Chase, Fifth Third Bank, Deutsche Bank, Credit Agricole

Partial Table of Contents:

Executive Summary
List of figures
List of tables
1. Introduction to fee-based banking income
1.1 Non-interest banking income
1.2 A broad range of products offer the opportunity for banks to generate fee income
1.3 Regulatory changes will increase the importance of fee-based income
1.4 Durbin Amendment had a negative impact on the fee income generated by US banks
1.5 Modifications to Regulation E will further reduce fee-based income
1.6 PPI regulation will have a significant impact on UK retail bank fee-based income
1.7 Change in the structure of UK banking will impact negatively on consumers
1.8 Regulation in Europe will reduce the income earned from commission-based sales
1.9 Tighter regulation will increase the importance of the branch network
1.10 Summary
2 Fee-based products in the US
2.1 Durbin Amendment to the Wall Street Reform and Consumer Protection Act of 2010
2.1.1 Recent developments after Durbin Amendment went into effect
2.1.2 Impact of Durbin Agreement on banks profitability
2.2 CARD Act has changed the way in which card issuers operate credit cards
2.2.1 Revolving credit is declining in popularity
2.2.2 Increases in APRs
2.2.3 Credit Card Delinquencies end 2011 nearly 5% lower than last year
2.2.4 Increasing offers via direct mail
2.3 New rewards schemes, but at a price
2.4 Introductory periods for balance transfers will be extended
2.5 Legal rulings impact on Credit card industry
2.6 US Banks introduced additional fees
2.7 Monthly fees on bank accounts can be avoided, but only by the affluent
2.8 Loyalty and rewards programmes have been scaled back
2.9 Fee-based income is an increasingly important source of income in US banks
2.10 Banks are likely to turn to prepaid cards in order to avoid interchange caps
2.11 The new, post-Durbin, regulatory landscape
2.11.1 Processes in place
2.11.2 Fifth Third first
2.12 Summary
3 The challenge of fee income generation in the UK
3.1 UK retail banks will be 'ring fenced', but reform will not take place until 2019
3.1.1 Strengthening core capital and primary loss-absorbing capacity
3.1.2 The separation of retail banks from investment activities
3.1.3 Increasing competition between UK banks
3.1.4 New entrants in the UK Banking sector
3.2 A more secure banking sector, but at what cost to consumers?
3.3 Credit cards are in decline in the UK, but interest income is rising
3.4 UK household debt will decline as a percentage of GDP by 2015
3.5 Focus on cost management has not gone away in UK banks
3.6 Structure of banking income does not reflect market trends
3.6.1 Interest rates on personal lending products are increasing
3.7 PPI is likely to cost the UK banking sector GBP9bn in total
3.7.1 Consumers are being warned to avoid 'no win no fee' PPI claim companies
3.7.2 Income Protection will replace PPI in some cases
3.7.3 The Financial Control Authority will be on the look-out for the next PPI scandal
3.8 UK Package current account market
3.8.1 Packaged accounts overtake standard current accounts for the first time
3.8.2 UK Package current account market fees approach GBP2 billion a year
3.8.3 LSG forecasts Packaged Account market to reach 30% by 2020

Full Table of Contents is available at:
-- http://www.fastmr.com/catalog/product.aspx?productid=3903...

About Timetric

Timetric is an independent economic and business research firm providing critical intelligence on emerging economies and key global industries.  They provide detailed economic and sector intelligence, business insights and authoritative, independent commentary.

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Industry:Finance
Tags:bank, fee, credit, banking
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