Creating more direct revenue streams from current accounts will be vital to banks, especially given the onus on cost control in 2012. This report looks at how banks should monetize the current account relationship through encouraging the adoption of fee-based packaged accounts
Features and benefits
- Achieve revenue growth through understanding the obstacles constraining packaged account sales
- Overcome the criticisms of packaged accounts through recognising and mitigating the risks of miss-selling
- Foster long term relationships with customers through learning about the value of benefit reinforcement
- Build a market leading strategy through appreciating the importance of customization
The packaged account is already earning a significant amount of revenue for the UK retail banking market but with growth in both the total size of the market and the monthly fee per account, the opportunities are impressive
The construction of the package on offer is the single biggest limitation on the size of the market for packaged accounts. This is the clear message that emerges from the customer responses to Datamonitor's FSCI Survey.
Too few UK current account providers have attempted to create packaged products geared towards consumers' lifestyles. Rather than aiming to create a package that suits a particular consumer segment, most providers have instead relied on a price point scale alongside a roughshod premiumization of the product.
Your key questions answered
- What are the obstacles limiting the potential of the packaged account market?
- What makes the current account relationship so critical in the battle for retail deposits?
- What forces are threatening the longevity of the traditional free-if-in-credit (FIIC) business model?