With traditional packaged accounts under great scrutiny, banks must explore other options for persuading consumers to pay fees for current-account related products and services. This report segments the market for fee-based current accounts and recommends strategies for providers to boost usage of paid-for current account services.
Gauge the current size of the fee-based current account market in the UK, and how large it can realistically be expected to grow.
Understand how the UK market is segmented with respect to users and non-users of fee-based current accounts.
Learn about which strategies will prove most effective in persuading consumers to pay for current account-related services.
Overcome customer inertia by recognizing the reasons for not holding a packaged account.
How should providers respond to the threats facing the packaged account market?
What alternative strategies can providers employ to increase fee-based revenues?
How large is the fee-based current account market, and how much bigger can it grow?
Packaged accounts are under attack on several fronts. The sale of such accounts is now governed by strict regulations, complaints about mis-selling of packaged accounts are rising, and many banks have responded by suspending or discontinuing them altogether. Providers will therefore have to find other ways to boost fee-based revenues.
Current account customization is an effective route towards increased fee-based revenues. Most consumers are open to the idea of designing their own accounts. Banks can respond by offering specific services, such as discounted overdrafts and shorter call waiting times, as individually paid-for extras.
The paid-for current account market is currently worth around 1.1bn per year. If providers can successfully target the most amenable non-paying consumers by offering premium services such as in-credit interest, preferential rates on other products, and enhanced personal financial management tools, the market could grow to 1.7bn per year.