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Current Accounts - Ireland - August 2015

Current Accounts - Ireland - August 2015

“The current account market in Ireland has weathered the economic recession and emerged relatively unscathed. Although the recession years were lost ones in terms of growth, the return to economic growth both in NI and RoI will almost certainly bring about a return to growth within the current account market.”

– Brian O’Connor, Senior Consumer Analyst

What are the current and potential current account ownership levels?

Are Irish consumers inclined to switch current account provider?
What are consumers’ general attitudes towards current accounts?


INTRODUCTION
Key themes in the report
Data sources
Consumer research
Market size rationale
Definitions
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Number of active current accounts, NI and RoI, 2010-15
Forecast
Figure 2: Indexed total number of active current accounts, NI and RoI, 2010-20
Market factors
Economic recovery to create increased demand for current accounts
Cost of current accounts increasing for RoI consumers
Despite low interest rate environment, interest on overdrafts remains high
Switching account provider getting easier for NI consumers, not for RoI consumers
More complaints about NI current account providers, fewer about RoI providers
The consumer
Overwhelming majority of Irish consumers have a current account
Figure 3: Number of current accounts owned by consumers, NI and RoI, June 2015
More competition in NI market than in RoI market
Figure 4: Bank or financial institution where main current account is held, NI and RoI, June 2015
Switching is a relatively rare occurrence among NI and RoI consumers
Figure 5: If and when consumers have switched their main current account to a different provider, NI
and RoI, June 2015
New accounts opened by 26% of NI, 24% of RoI consumers in last two years
Figure 6: If consumers have opened additional current accounts in the last two years, NI and RoI, June
2015
New accounts opened to better manage personal finances
Figure 7: Factors that prompted consumers to open a new current account in the last two years, NI and
RoI, June 2015
Consumers want basic accounts, and perceive providers to be largely the same
Figure 8: Agreement with statements relating to current accounts and banking, NI and RoI, June 2015
Debit cards the most widely-owned plastic card among Irish consumers
Figure 9: Ownership of debit cards, NI and RoI, June 2015
What we think
ISSUES AND INSIGHTS
What are the current and potential current account ownership levels?
The facts
The implications
Are Irish consumers inclined to switch current account provider?
The facts
The implications
What are consumers’ general attitudes towards current accounts?
The facts
The implications
MARKET OVERVIEW
Key points
Economic growth, activity and prospects all on the up
Figure 10: GDP growth projections, NI, UK & RoI, 2013-16
Figure 11: Average annual employment, % change, actual, forecast and projected, NI and RoI, 2014-16
Figure 12: Unemployment rate, as % of labour force, RoI, 2012-16
Bank charges mounting for RoI consumers, limiting account ownership
Figure 13: Comparison of bank charges if balance maintained above relevant minimum*, RoI, July
2015
Figure 14: Comparison of bank charges*, RoI, July 2015
Cost of overdrafts increasing for consumers in NI and RoI
Figure 15: Average overdraft interest rate and ECB base rate, RoI, 2007-15*
Switching provider is easy for NI consumers, not so much in RoI
Complaints about current accounts up in UK (including NI), down in RoI
Figure 16: Number of complaints about current accounts submitted to the FOS, 2012-15
Figure 17: Complaints received by FOS about current accounts, by category, 2014/2015
Overall complaints down 42% in RoI, complaints about accounts down 33% in 2014
Figure 18: Complaints received by the Financial Ombudsman (Ireland), RoI, 2006-14
Figure 19: Complaints received about banking by the Financial Ombudsman (Ireland), RoI, 2011-14
Figure 20: Complaints received about banking by the Financial Ombudsman (Ireland), by category,
RoI, 2014
Figure 21: Complaints received about accounts by the Financial Ombudsman (Ireland), by category,
RoI, 2011-14
MARKET SIZE AND FORECAST
Key points
Over 7 million active current accounts in Ireland in 2015
Figure 22: Total number of active current accounts, IoI, RoI and NI, 2010-20
2015 to be the turning point for the Irish current account market
Figure 23: Indexed total number of active current accounts, NI and RoI, 2010-20
Emigration still exceeding immigration in RoI
Figure 24: Immigration and emigration, 000s, RoI, 2006-15*
NI recorded net inward migration for first time since 2010
Figure 25: Net migration, NI, 1999-2014*
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
COMPANIES AND INNOVATIONS
Key points
Snap to Switch
Every little apps
Company profiles
Allied Irish Bank/First Trust
Figure 26: AIB current accounts, RoI, 2015
Figure 27: First Trust current accounts, NI, 2015
Bank of Ireland
Figure 28: Bank of Ireland current accounts, NI, 2015
Figure 29: Bank of Ireland current accounts, RoI, 2015
Danske Bank
Figure 30: Danske Bank current accounts, NI, 2015
Halifax
Figure 31: Halifax current accounts, NI, 2015
HSBC
Figure 32: HSBC current accounts, NI, 2015
KBC Bank
Figure 33: KBC Banks current accounts, RoI, 2015
Nationwide
Figure 34: Nationwide current accounts, NI, 2015
Permanent TSB
Figure 35: Permanent TSB current accounts, NI, 2015
Santander
Figure 36: Santander current accounts, NI, 2015
Tesco Bank
Figure 37: Tesco current accounts, RoI, 2015
Ulster Bank
Figure 38: Ulster Bank current accounts, NI, 2015
Figure 39: Ulster Bank current accounts, RoI, 2015
THE CONSUMER – OWNERSHIP OF CURRENT ACCOUNTS
Key points
Vast majority of Irish consumers have a current account
Figure 40: Number of current accounts owned by consumers, NI and RoI, June 2015
More than a third of consumers have multiple accounts
Multiple account ownership highest among self-employed consumers
Figure 41: Consumers with three or more current accounts, by work status, NI and RoI, June 2015
ABC1s more inclined than C2DEFs to have multiple accounts
Figure 42: Consumers with two current accounts, by social class, NI and RoI, June 2015
THE CONSUMER – PROVIDERS OF CURRENT ACCOUNTS
Key points
Four providers dominate RoI market; more competition in NI
Figure 43: Bank or financial institution where main current account is held, NI and RoI, June 2015
Less dominance in other/secondary account market in RoI
Figure 44: Bank or financial institution where other and main current account is held, RoI, June 2015
Broad correlation between ‘main’ and ‘other’ markets in NI
Figure 45: Bank or financial institution where main and secondary/other current account is held, NI,
June 2015
THE CONSUMER – FREQUENCY OF SWITCHING
Key points
Most consumers have never switched their main provider
Figure 46: If and when consumers have switched their main current account to a different provider, NI
and RoI, June 2015
Churn highest among men and older consumers
Figure 47: Consumers who have never switched main current account provider, by gender and age, NI
and RoI, June 2015
Consumers aged 45+ most likely to have switched 5+ years ago
Figure 48: Consumers who have switched their main current account provider more than 5 years ago,
NI and RoI, June 2015
THE CONSUMER – NEW CURRENT ACCOUNTS
Key points
A quarter of consumers have opened new account in last two years
Figure 49: If consumers have opened additional current accounts in the last two years, NI and RoI,
June 2015
Consumers and 18-24 and students most likely to have opened a new account
Figure 50: Consumers who have opened an additional current account in the last two years, by age, NI
and RoI, June 2015
Figure 51: Consumers who have opened an additional current account in the last two years, by work
status, NI and RoI, June 2015
New accounts opened to better manage personal finances
Figure 52: Factors that prompted consumers to open a new current account in the last two years, NI
and RoI, June 2015
Customer service and tech advancement reasonably influential
Figure 53: Consumer who opened a new current account in the last two years because of customer
service and website/ app, NI and RoI, June 2015
NI consumers respond to perks, benefits, rewards and incentives
THE CONSUMER – ATTITUDES TOWARDS CURRENT ACCOUNTS
Key points
Basic, no-frills account appeals to four in 10 consumers
Figure 54: Agreement with statements relating to current accounts and banking, NI and RoI, June 2015
Men and consumers aged 45+ most content with basic current account
Figure 55: Agreement with statement, ‘I am happy for my current account to just do the basics without
offering me any additional extras’, by gender and age, RoI & NI, June 2015
Significant minority see little difference between providers
Figure 56: Agreement with statement, ‘All current account providers are pretty much the same as each
other (eg in terms of customer service, product offerings etc), by gender and age, NI & RoI, June 2015
Cash incentives not the best way to encourage switching
Figure 57: Agreement with the statement, ‘I do not think it is worth moving my current account to a
different provider for a one-off cash incentive’, by age and social class, NI and RoI, June 2015
But flexible overdraft arrangement would entice around one in five to switch
Figure 58: Agreement with statement, ‘A flexible overdraft limit (eg can be changed with reduced/no
fee) would encourage me to switch my main current account provider’, by gender, age and social class,
NI and RoI, June 2015
Benefits comparison service would be popular among consumers
Figure 59: Agreement with statement, ‘I would be interested in a service that lets me compare all the
benefits offered by different current accounts’, by age and social class, NI and RoI, June 2015
... but no willingness to share personal data to get more personalised service
Significant minority would use an online-only account
Figure 60: Agreement with the statement, ‘I would be happy to use an online only current account (ie
no access to branches) if there was a reward for doing so, by gender, age and social class, NI and RoI,
June 2015
Additional benefits irrelevant to one in three NI and one in four RoI consumers
Figure 61: Agreement with statement, ‘Many of the additional benefits included on packaged or
premium accounts are not relevant to me (eg travel insurance, car breakdown cover)’, by gender and
social class, NI and RoI, June 2015
... which is perhaps why so few are willing to pay a monthly fee for added benefits
Figure 62: Agreement with statement, ‘I would be prepared to pay a monthly fee for a current account
with added benefits (eg cash reward, event tickets), by gender and social class, NI and RoI, June 2015
THE CONSUMER – OWNERSHIP OF PAYMENT CARDS
Key points
Majority have a debit card, making it most popular payment card
Figure 63: Ownership of debit cards, NI and RoI, June 2015
Slight decline in multiple debit card ownership over past year in RoI
Ownership of two debit cards highest among ABC1s in NI and RoI
Figure 64: Ownership of two debit cards, by social class, NI and RoI, June 2015
Two thirds of NI and half of RoI consumers have a credit card
Figure 65: Ownership of credit cards, NI and RoI, June 2015
Half of RoI and a third of NI consumers do not have a credit card
Figure 66: Consumers who do not have a credit card, by gender and age, NI and RoI, June 2015
Pre-paid cards owned by 14% in RoI, 8% in NI
Figure 67: Ownership of prepaid cards, NI and RoI, June 2015
Only around one in 20 Irish consumers have a charge card
Figure 68: Ownership of charge cards, NI and RoI, June 2015
APPENDIX
NI Toluna data
Figure 69: Number of current accounts owned by consumers, by demographics, NI, June 2015
Figure 70: Bank or financial institution where main current account is held, by demographics, NI, June
2015
Figure 71: Bank or financial institution where main current account is held, by demographics, NI, June
2015 (Continued)
Figure 72: Bank or financial institution where other current accounts are held, by demographics, NI,
June 2015
Figure 73: Bank or financial institution where other current accounts are held, by demographics, NI,
June 2015 (Continued)
Figure 74: Bank or financial institution where other current accounts are held, by demographics, NI,
June 2015 (Continued)
Figure 75: If and when consumers have switched their main current account to a different provider, by
demographics, NI, June 2015
Figure 76: If consumers have opened additional current accounts in the last two years, by
demographics, NI, June 2015
Figure 77: Factors that prompted consumers to open a new current account in the last two years, by
demographics, NI, June 2015
Figure 78: Factors that prompted consumers to open a new current account in the last two years, by
demographics, NI, June 2015 (continued)
Figure 79: Factors that prompted consumers to open a new current account in the last two years, by
demographics, NI, June 2015 (continued)
Figure 80: Agreement with statements relating to current accounts and banking, by demographics, NI,
June 2015
Figure 81: Agreement with statements relating to current accounts and banking, by demographics, NI,
June 2015 (continued)
Figure 82: Ownership of credit cards, by demographics, NI, June 2015
Figure 83: Ownership of debit cards, by demographics, NI, June 2015
Figure 84: Ownership of charge cards, by demographics, NI, June 2015
Figure 85: Ownership of prepaid cards, by demographics, NI, June 2015
RoI Toluna data
Figure 86: Number of current accounts owned by consumers, by demographics, RoI, June 2015
Figure 87: Bank or financial institution where main current account is held, by demographics, RoI, June
2015
Figure 88: Bank or financial institution where main current account is held, by demographics, RoI, June
2015 (Continued)
Figure 89: Bank or financial institution where other current accounts are held, by demographics, RoI,
June 2015
Figure 90: Bank or financial institution where other current accounts are held, by demographics, RoI,
June 2015 (Continued)
Figure 91: Bank or financial institution where other current accounts are held, by demographics, RoI,
June 2015 (Continued)
Figure 92: If and when consumers have switched their main current account to a different provider, by
demographics, RoI, June 2015
Figure 93: If consumers have opened additional current accounts in the last two years, by
demographics, RoI, June 2015
Figure 94: Factors that prompted consumers to open a new current account in the last two years, by
demographics, RoI, June 2015
Figure 95: Factors that prompted consumers to open a new current account in the last two years, by
demographics, RoI, June 2015 (continued)
Figure 96: Factors that prompted consumers to open a new current account in the last two years, by
demographics, RoI, June 2015 (continued)
Figure 97: Agreement with statements relating to current accounts and banking, by demographics, RoI,
June 2015
Figure 98: Agreement with statements relating to current accounts and banking, by demographics, RoI,
June 2015 (continued)
Figure 99: Ownership of credit cards, by demographics, RoI, June 2015
Figure 100: Ownership of debit cards, by demographics, RoI, June 2015
Figure 101: Ownership of charge cards, by demographics, RoI, June 2015
Figure 102: Ownership of prepaid cards, by demographics, RoI, June 2015
UK RESEARCH METHODOLOGY
Consumer research
Sampling and weighting
Definitions
Qualitative Research
Further Analysis
Brand & Social Media Research
Trade research
Informal
Formal
Desk research
Statistical Forecasting

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