 Market Report, "Willingness to Pay for UK Current Accounts", publishedNew Financial Services research report from Datamonitor is now available from Fast Market Research
By: Fast Market Research, Inc. Scope of this Report * Achieve revenue growth through understanding the obstacles constraining packaged account sales * Overcome the criticisms of packaged accounts through recognising and mitigating the risks of miss-selling * Foster long term relationships with customers through learning about the value of benefit reinforcement * Build a market leading strategy through appreciating the importance of customization Report Highlights The packaged account is already earning a significant amount of revenue for the UK retail banking market but with growth in both the total size of the market and the monthly fee per account, the opportunities are impressive The construction of the package on offer is the single biggest limitation on the size of the market for packaged accounts. This is the clear message that emerges from the customer responses to Datamonitor's FSCI Survey. ------------------------------------------------------------ Full Report Details at - http://www.fastmr.com/ ------------------------------------------------------------ Too few UK current account providers have attempted to create packaged products geared towards consumers' lifestyles. Rather than aiming to create a package that suits a particular consumer segment, most providers have instead relied on a price point scale alongside a roughshod premiumization of the product. Reasons to Get this Report * What are the obstacles limiting the potential of the packaged account market? * What makes the current account relationship so critical in the battle for retail deposits? * What forces are threatening the longevity of the traditional free-if-in-credit (FIIC) business model? Partial Table of Contents: OVERVIEW * Catalyst * Summary * Methodology INTRODUCTION * A profitable retail banking business is becoming even more important to large banking groups * Banking chiefs will look to their retail divisions for attractive investment opportunities * Economic and regulatory conditions place deposit gathering front and center for retail banks * Current accounts provide a significant source of income for UK retail banks * Net interest margins and overdraft fees have historically been the chief source of direct PCA income * The current account is critical to a bank's ability to gather deposits and cross-sell other products * Cross-selling in the UK is comparatively low and declining, but remains a priority * The current account relationship is a powerful advantage in the battle for deposits * A primary banking relationship provides greater access to credit sales alongside enhanced customer information * Consumer pressure and a regulatory spotlight constrain the earnings potential from overdraft charges * (Untitled sub-section) * Banks have been accused of using overdraft fees as an underhand means of charging their consumers * The Financial Conduct Authority is coming under pressure by Which? to "keep an eye on the banks * The squeeze on overdraft fees could end "free" banking in the UK * The free-if-in-credit model is currently the predominant type of PCA in the UK * Banks will look for ways to monetize their current account relationship * Banks need to avoid moving back to a commoditized product and must create valuable experiences * Consumers will value and pay a premium for a quality service offering * Banks need to deepen their customer relationships and provide a full service experience * Placing fees directly on traditionally "free" services could provoke an aggressive consumer response * The threat from legitimate alternatives forces the banking industry to be careful with its fee structure * Banks in the US provide an invaluable case study for the pitfalls of placing fees on core banking services * Bank of America was forced to reverse its decision given mounting criticism and a consumer base in revolt * Bank of America's losses have taught US banks that they must tread carefully STRATEGY IN FOCUS * The market for packaged accounts is nearly 10 million consumers strong and is growing * The packaged account market is now worth nearly GBP1.5bn per year and is yet to reach its full potential * The market is currently constrained by inflexible packages which limit customer appeal * Packaged account providers are failing to differentiate their offerings, which is exacerbating the problem of "fit * The dominant high street banking players are failing to cater to a range of customer needs * Current account providers must look beyond outdated affluence models * Lloyds TSB offers a variety of packaged accounts but its marketing message is off target * Providers need to develop packages that suit the lifestyles of their target customer segments * Banks must utilize customer information to improve awareness and create packages that are the right fit for their target customers * Banks need to raise awareness among their customer base with targeted communications * Banks must utilize the information they have about their customers to direct the right product to the right customer * Segmentation can actually lower costs through enhanced targeting of valuable consumer segments * The mobile phone industry offers an interesting example of how to successfully brand a range of packages * The future will bring flexible and customizable packaged accounts * Prepackaged accounts will always have a reduced potential market due to duplication and irrelevance * BBVA Compass's Build-to-Order checking account allows for personalization * A new entrant could disrupt the market with a fully flexible package * Virgin Money and Tesco Bank both have the capabilities and ambition to challenge the packaged account status quo * Customization must not come at the expense of clarity for the consumer * Miss-selling and poor awareness of benefits have damaged perceptions of value for money * Full Table of Contents is available at: -- http://www.fastmr.com/ About Datamonitor The Datamonitor Group is a world-leading provider of premium global business information, delivering independent data, analysis and opinion across the Automotive, Consumer Markets, Energy & Utilities, Financial Services, Logistics & Express, Pharmaceutical & Healthcare, Retail, Technology and Telecoms industries. Datamonitor's market intelligence products and services ensure that you will achieve your desired commercial goals by giving you the insight you need to best respond to your competitive environment. View more research from Datamonitor at http://www.fastmr.com/ # # # Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available. End
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