Trends and Analysis

Banking Trends and Opportunities

Gabe IngallsPresenter Title

Contents

Internet banking forecast% who do at least part of their banking via the internet

nVision forecast, Summer 2010-based projection

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Internet users (those using it at least once aweek) - forecast

e-banking forecast

e-banking - actual

Source: nVision ResearchBase: 1,000 face-to-face respondents aged 16+, GB

Consumer Confidence

1. Nationwide

Nationwide has released the following concerning UK consumer confidence:

•‘Consumer confidence picked up in December after three consecutive months of falls •December's uplift reversed the fall seen the previous month but, at 53 points, still leaves the Index well below its long-run average of 81 •All key measures remain at relatively low levels and below their long-run averages •At 90 points, the Spending Index does display some sign of resilience in what continues to be a downbeat time for overall confidence’ 1.

Bank of England Base Rate

1. Bank of England

‘Inflation has become a major concern for savers in 2011. Official inflation – as measured by the consumer prices index (CPI), which doesn't include mortgage costs – rose to 3.7% this December from 3.3% in November. Economists now fear it will hit 4%, when the VAT hike (from 17.5% to 20% this January) and soaring commodity prices take their toll… But if there's a sunny side, it's that high inflation boosts the chances of the Bank of England hiking its base rate from 0.5% in the first half of 2011, with knock-on effects for savings accounts.’

1. This is Money

Advertising Market

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Finance Media Spend• For the most part,

Banking advertisers tend to spend the most on advertising in the Direct Mail, on TV or through the Press

• On average the industry currently spends around 6% on Internet advertising (not including search)

Source: NNR adDynanix : Jan 2010 – November 2010

Display Advertisement Publisher Location: Reach and Frequency

•Microsoft sites have the highest exposure of UK Unique Visitors.•Microsoft Sites have almost the same amount of impressions as the top publisher•This allows branding campaigns to reach the largest set of consumers with MSA

Source: ComScore adMetrix : December 2010

Top Advertiser by Impression and UU by ComScore AdMetrix

• The average frequency of the top 20 accounts is 5.9

Source: ComScore AdMetrix – December 2010

Bing Finance KW Searchers are…

Source: NNR MAY-OCT ‘10

Bing Search TrafficTrafficOverall, banking saw a 39% increase in

traffic during H2 2010 year on year; this increases to 59% when looking at just January 2011 vs 2010

Insights:‘Official inflation… rose to 3.7% this

December from 3.3% in November. Economists now fear it will hit 4%, when the VAT hike (from 17.5% to 20% this January) and soaring commodity prices take their toll. Why does it concern savers? Simply, basic rate taxpayers need to earn an annual return of 4.63% before tax to stop the value of their money eroding.’ (This is Money)

1. Microsoft Advertising Intelligence Tool2. Microsoft AdCenter

Product Traffic Growth

Banking Year on Year Growth Trends for H2 2010:•Bank Accounts down 3% •Savings Accounts up 59%•ISAs up 19%Moreover, all three are up in January year on year

With low interest rates for most accounts, there has not been too much interest in the bank account market other than looking for a better place for your savings

With the end of the tax year approaching, ISAs will become a hot product in the coming months

1. Microsoft Advertising Intelligence Tool

Finance Demographics and Daily Trends:

1. Microsoft Advertising Intelligence Tool

Network and O&O Trends

Network Demographics

•50% of impressions occur between the 18 and 34 year old age groups, this shifts to the 24 to 44s for clicks

•Conversions, like impressions, peak in the 25-34 group (35%) and are more prominent with female for most age groups

•58% of conversion occur between the 25-34 age bracket

•Conversions for Finance clients usually entail an application or a quote

Source: Microsoft Media Network : JULY – DEC10

Network: Day of the Week• The majority of the impressions and clicks occur during the beginning of the week with

a low point on Saturdays however clicks peak on Tuesday and again on Sunday

• When looking at the conversion information, Tuesday, Thursday and Friday are key activity days. This may be because consumers want to complete their purchase before the weekend

Source: Microsoft Media Network : JULY – DEC10

Network: Time of Day

• While Banking impressions/actions are fairly steady in the morning and peak in the hours post lunch

• Actions however have the largest peak post lunch

• Impressions and actions fall off rapidly after work in the evening hours

Source: Microsoft Media Network : JULY – DEC10

Consumer Climate

Consumer Trends

• ‘New research suggests Brits are forgetful when it comes to their savings accounts and many could do more to save as some admit to stashing cash in kitchen draws. Many have stumbled upon these old accounts with an average of £600 in them. Twenty-one percent have discovered cash in old ISAs, children’s savings accounts, bonds and dusty money boxes worth £6.1 billion in total.’1. Money Expert

1. Banking Times

Banks and trustworthinessMean score on a scale of 1-10 (1 being very distrusting, 10 being very trusting)

“Thinking about your bank, how much do you trust each of the following?”

1 2 3 4 5 6 7 8 9 10

The staff at the callcentres

The mobile phonetechnology that the bank

uses

Managers of the bank

The internet technologythat the bank uses

The staff in the branches

Source: Monitise/The Future Foundation/nVisionBase: 1,000 respondents aged 18+, UK, 2009

Consumers that banks have lost touch with customers

• Inertia is still the most powerful factor in the retail banking market – hardly any are planning to switch their current account.

• Mintel's research shows massive cynicism about the banking sector as a whole, though.

• Even though most are more or less happy with their current bank, they still think that the banks have lost touch.

• Local branches are still key in the consumers choice of retail banks

• Research also shows that there is still potential for cross-selling products to existing customers, particularly insurance

© 2010 Mintel International Group. All rights reserved. Confidential to Mintel.

Preferred method for contacting banks“Thinking about the last time you contacted your bank, what method did you use to contact them?”

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Face to face (in branch)

Email

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On telephone speaking to aperson

Online Banking

Automated phone service

Source: Monitise/The Future Foundation/nVision ResearchBase: 1,000 respondents aged 18+, UK

Finance OpportunitiesSavings and ISA Products

With the end of the tax year approaching ISA campaigns should start to think about becoming active. Moreover, interest rates will also need to be watched for future savings account activity

Self-Service Banking

Online banking, on both the mobile and PC, through applications and browsers have shown strong growth over the years. Both should continue to grow as preferred forms of contact with banks

Search and Display

Use both offerings to help boost your ROI moreover, use our display offering to help boost your brand campaign to the largest audience