Appetite still strong for new banks, says Deloitte
29 November 2010
With almost one in three consumers willing to open a savings account with a non-traditional bank, the time is right for new entrants to capitalise on consumers’ desire for more choice in the retail banking sector.
A YouGov survey for Deloitte showed that almost one in three consumers (32%) wished there were more banks to choose from on the high street. Coupled with the fact that 17% have moved one or more of their banking relationships in the past 12 months, Deloitte believes there is a real opportunity for new retail banking players to make an impact in the market. However, new entrants will need to position themselves carefully to overcome concerns such as bank safety and must address specific customer service requirements.
The findings show that 20% of consumers are more concerned about the safety of their bank than they were a year ago. With regard to service, 64% said they would prefer to save with a large established high street bank due to the belief that they are safer (53%), have wider branch networks (43%) and provide better services (20%). Online access (72%) was the most important factor for the customers who rated service as one of their top three priorities when searching for a current account, followed by having a local branch network (55%).
Neil Tomlinson, head of retail banking consulting at Deloitte, commented: “New entrants have an opportunity to differentiate themselves, particularly by the level of service offered. Online access as well as branch networks are key priorities for consumers and new entrants must take this on board. However, there is a fine balancing act that new entrants will need to master in order to differentiate themselves from traditional players whilst simultaneously addressing concerns around safety.
“Our findings suggest that consumers will look to more established and recognised brands who extend into banking, with one in ten saying they would be happy to bank with any large ‘household brand’. Further, consumers are more likely to take out certain products such as savings accounts from new entrants, but remain cautious about committing to longer term products such as mortgages. Undoubtedly there is great potential for new entrants – but they will have to get their service offering spot on to take business away from the established players in the market.”
Additional key findings:
• 27% would buy a credit card from a new entrant;
• 22% would take a current account with a new entrant; but
• Only 9% would consider taking a mortgage;
• 32% of consumers said they would be happy banking with a supermarket;
• 15% would be happy to bank with a well known chain of department stores.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2104 adults. Fieldwork was undertaken between 9 and 10 October 2010. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
Note to editors
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.
The information contained in this press release is correct at the time of going to press.
Member of Deloitte Touche Tohmatsu Limited