The Q3 JGFR/GfK UK Banking Barometer covering the public’s main financial services providers (MFSP) shows a jump in RBS Group customers, with the Group MFSP share up from 15% to 19%. Overall 91% of adults (unchanged Q3 2013) cite having an MFSP, the highest proportion since Q4 2010, and a big leap from a below-average 83% last quarter.
Strong Q2 advertising campaigns may have helped to persuade customers to switch or re-designate an account. Surging regular savings and mortgage demand as reported in the JGFR / GfK Q3 UK Financial Activity Barometer may also have strengthened the relationship.
Of the estimated 47 million adults with a main financial services provider, the leading ten brands have an 87% share, up from 83% last quarter and in Q3 2013. The efforts to get people to switch may be working between the leading brands, but it is not reflected as yet in new challenger bank brands. This is likely to take time. Virgin Money, Tesco Bank, M&S Money and the Post Office have a combined share of 0.3%.
There are notable regional differences in the proportion of people with an MFSP, and of changes in the past quarter, and compared to a year ago.
Over 95% of adults in the North East cite having an MFSP, the highest proportion of any region, and a big change from 78% last quarter and 85% a year ago. Currently the West Midlands and Wales (88%) have the lowest proportions with an MFSP, although in the former the proportion without an MFSP has halved in the current quarter.
In Scotland where the impact of the Referendum on personal finances remains very unclear, there is a notable shift in banking preference to The Royal Bank of Scotland. This quarter the latter’s MFSP brand share is 33%, up from 18% last quarter and from 15% a year ago.
Indeed across the UK the retail banking brands of RBS have performed at their best in the 12 years of the survey. NatWest has joined Lloyds Bank as the leading UK MFSP, while Ulster Bank is close to being the leading MFSP in Northern Ireland. On a 4-quarter moving average basis Barclays remains the leading MFSP.
With TSB now establishing itself as a ‘retro’ challenger bank and Co-operative Bank seemingly having weathered the recent concerns over its finances, competition among the smaller branch- based bank brands is growing. The top 5 bank brands (the ‘Big 4’ High Street Banks together with either Santander or Halifax) continue to dominate with a 60% brand share, around the long term average.
A champagne summer looks on the cards for retail banks, especially the branch-based banks with strong regional and active customer bases.
John Gilbert, Chief Executive of JGFR, said: “The H2 2014 results from RBS show the Group to be making very good progress. With strong retail financial services business volumes likely in Q3, NatWest is well placed to take-over as the UK’s leading main financial services brand.”