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Published on 3rd November 2014

Are all banks the same?

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This is a question people ask me all the time…and it’s not an easy one to answer, but using your reviews, we can have a go at answering it.

We've focused on the ‘Big Four’ banks. Why? Well, because they dominate the banking market in the UK - they have 77% of the personal current account market and 85% of the business current account market. This means that for many of us, these banks are all we know.

To help us answer the question we’ve used the Value Disciplines Model, see the geeky bit below if you want to know more about this model.

So here’s what you’ve told us:

  • The shape for each of the Big Four banks is roughly the same. This means that for most customers, there really isn’t much of a difference between these banks. One may be slightly better, but they all kind of look the same
  • Your customer reviews have shown that none of these banks have demonstrated strong leadership in any one of the three value disciplines
  • While Barclays comes out top across all 3 value disciplines, it was a fairly close run result
  • The biggest difference can be seen in the Product Leadership value discipline (the lowest score here was HSBC with 1.2. Barclays come out top with 2.9)
  • This suggests that banks are working hard to differentiate their products first and then their brands. We’ve seen this to be particularly true in the competitive current account space, were cashback, extra benefits such as travel insurance, and good interest rates are helping to win customers. Take a look at your most recommended current accounts

The geeky bit!

We’ve used your reviews and the Value Disciplines Model (Michael Treacy and Fred Wiersema). The model says that there are three key value disciplines for companies, Operational Excellence, Product Leadership and Customer Intimacy. Companies must choose one of the value disciplines and act upon it consistently. This doesn’t mean that the other 2 dimensions don’t matter, just that being ‘ok’ is enough.

Operational Excellence:Great operations/execution, with a focus on providing a reasonable quality at a low price

Produce Leadership:Very strong innovation and marketing. This normally isn’t a long-term source of advantage as competitors just copy what works well

Customer Intimacy:Customer service and attention rock! Aim to match and exceed customer expectations

How does your bank or insurance company differentiate? Tell us by writing a review

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