THE UK’s top five banks will continue to dominate the market despite the recent glut of negative publicity.
A new report from Datamonitor suggests new players entering the market have “missed the boat” and should have launched in the direct aftermath of the banking crisis.
Customer inertia is seen as the biggest stopping point for new companies hoping to break into the retail banking sector.
Metro Bank, Tesco and Virgin are all due to launch full banking services this year. Virgin and Tesco will benefit from strong branding across their other services – known as the “halo effect” – and the supermarket, a market leader in data mining, will be well placed to find out what their customers are looking for.
Lloyds, HSBC, NatWest, HBOS and Barclays accounted for 66 per cent of the current account market last year and new players will find it difficult to muscle in on their territory.
First Direct, established for over 20 years, still has only a two per cent market share and players launched in the last decade like Standard Life Bank and Egg were both sold off by their original owners after incurring significant losses.