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Fee-Based Banking in the UK: Sizing the Market Opportunity

Published by Datamonitor on Dec 18, 2012
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With the viability of the free-if-in-credit model under threat, banks need to increase their focus on the fee-based banking market. Creating more direct revenue streams from current accounts will be vital to banks, especially given the onus on cost control. Fee paying accounts not only generate higher revenue but can also lead to greater customer engagement, cross-selling, and differentiation.

Report Scope
  • Discover how big the fee based current account market in the UK is, and how big it can realistically expect to grow.
  • Understand how the UK marketed is segmented with respect to users and non-users of fee-based current accounts.
  • Learn what strategies will provide most effective in increasing levels of acquisition, loyalty, and profitability for each segment.
  • Overcome customer inertia by recognizing the reasons for not holding a packaged account.
Report Highlights

Net interest margins, insufficient fund charges, and overdrafts charges have historically been the chief sources of direct personal current account income for providers. However, banks will increasingly looking to raise the income generated by monthly fees of paid-for accounts as revenue from these sources comes under pressure and costs rise.

Fee-based accounts have the realistic potential of making up 36% of the overall current account market. To maximize revenue generation, providers must demonstrate the value consumers can derive from such accounts and emphasize the convenience afforded by fee-paying accounts.

Datamonitor has identified six distinct consumer segments based on usage of, and attitudes towards fee-based current accounts. Each segment displays different characteristics, and banks consequently need to employ very different strategies to reach out to each group.

Reasons to Get this Report
  • How many fee paying current accounts are there in the UK and what is their value to providers?
  • How big a share of the market will fee-based current account reach?
  • What forces are threatening the longevity of the traditional free-if-in-credit model?
  • What account features most appeals to different consumer segments?
  • What strategies can your organization employ to maximize the acquisition of packaged account customers?

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