Executive Summary

Shifting customer demographics and developments in new technology are bringing major changes to retail banking. This is a market where traditional branch banks face a surge of competition from other financial services providers wishing to expand into banking, and from new market entrants from outside the financial sector.

As technology makes the dissemination of information easier, an increasing variety of distribution channels is starting to make the source of retail banking products transparent. Throughout the world, financial service providers are looking towards a new concept of `anytime, anywhere, anyhow' banking, which demands that retail banks of the future find better ways of delivering a complete set of lifestyle-based financial services which simplify their customers' lives and allow them more personal time -- an increasingly precious commodity.

The UK market for retail banking products and services is very large, and the provision of such services is not limited to retail banks and building societies, insurance and loan companies being part of the market. Key Note estimates the market's value in 1996 to have been £173.71bn. As yet, much of the business is conducted within separate, specialised financial services sectors; but as retail banking expands to provide a wider and more complete customer service, many of these separate businesses will converge.

Several of the companies in the market do not at the moment separately file the value of their retail banking services as defined in this market report. But Key Note estimates that in 1997 at current prices, £94.37bn of business will be transacted by strictly-defined retail banks, telephone banks and the converted building societies, and over the next 5 years, volumes will increase dramatically, reaching £136.01bn in the year 2001.

During the period of market transition, traditional retail branch banks must finance the costs of change, ward off increasingly serious competition and continue to earn profits if they are to survive. Their ability to successfully manage their businesses through such a difficult period is likely to prove a significant challenge.

More Information

  Denotes a required field.