UK Retail Banking: Competitor Benchmarking 2024

UK Retail Banking: Competitor Benchmarking 2024

Summary

This report discusses the financial performance of the top 15 banks in the UK, looking at market shares for key retail banking products as well as underlying financial ratios. It analyzes the makeup of banks’ customer bases as well as how successful banks are at cross-selling and upselling products to these customers. Net Promoter Score and customers’ likelihood of using their main bank to achieve financial goals are also considered when establishing the strength of relationships banks have with their customers. In addition, the report compares customer satisfaction across a range of digital and overall metrics to determine where players must improve. These findings form the basis of the actionable steps section, which provides analysis of the successes and failures of each provider covered in the report, as well as advice on how to address any failings.

Lloyds Banking Group remains the leading provider by market share across the main retail banking products, although new challengers such as Monzo and Starling are eating away at the share of traditional incumbents. Several banks have improved their cost-income ratios since 2018 despite recent inflationary challenges in the UK. Starling stands out as the leading bank for Net Promoter Score; meanwhile, customers of First Direct are least likely to believe their bank can help them achieve their financial goals. Satisfaction with access to a branch or call center has declined each year since 2022. Satisfaction around digital problem resolution is also notably low, suggesting that banks are not doing enough to assist customers with problems despite having closed branches across the UK.

Scope

• Incumbents generally saw their credit card market shares decline over 2018-23 as new banks entered the market. Barclays’ drop stands out, with its credit card share falling almost 10 percentage points over the timeframe.
• Lloyds Bank has a relatively low proportion of mass affluent and HNW customers but sells premium accounts to more than one in five customers.
• RBS recorded the lowest NPS in 2024, with 30% of its customers being detractors as per GlobalData’s 2024 Financial Services Consumer Survey.

Reasons to Buy

• Develop an understanding of the composition of the UK retail banking market.
• Learn which banks are succeeding and which are failing across various metrics, ranging from profitability to Net Promotor Score.
• Identify the actionable steps that need to be taken by UK banks to address their biggest shortcomings.