This Key Note Market Assessment report aims to provide a snapshot of the principal retail banks and insurers in the UK’s financial services industry in summer 2010, concentrating on the UK, but referring to the global context. Key Note also endeavours to evaluate the importance of customers to the leading organisations, and to suggest how the financial sector may develop.
The report defines commercial dynamics as those forces shaping companies’ business plans. They include political, economic, social and technological pressures and opportunities. By ‘financial services’, Key Note means cash management, savings, investments, loans, credit cards, mortgages, and long-term and short-term insurances. For the company profiles, Key Note focuses on retail banks and insurers based in the UK, i.e. those with whom the public is most likely to come into contact.
In 2010, the UK's domestic market was receding in international importance, but this created opportunities both for mutual societies, which had been struggling, and for new ventures. Consumers buying homes were benefiting from ultra-low interest rates on variable mortgages but new mortgages were hard to obtain and new personal loans were often 7.5% and more above base rate.
Financial groups in 2010 were slightly less important in the UK's top 20 companies than in 2002, but energy and mining groups were more significant. HSBC was the largest bank in both years. The same for-profit investors appear over and over again in the lists of major shareholders in financial groups, including BlackRock Inc, Legal & General Group, and AXA. In August 2010, four institutional shareholders, and the UK Treasury, controlled over 21% of the combined equity of the ten largest financial groups in the UK: a substantial degree of concentrated ownership.
The UK's mass retail market for financial services was less attractive to foreign companies in 2010 than in 2000. In 2000, foreign insurers had a bigger role than foreign banks in UK mass-market financial services, and in 2010 this situation continued, although Santander was increasing the foreign banking presence. Between 2000 and 2010, foreign insurers in the UK moved to focus more on direct sales of general insurance products, through their own operations or via partners, and on life, pensions and investments for corporate and affluent individual clients. (Extracts from Executive summary).
This Key Note report is available to current London Business staff, students and faculty from Key Note Online which can be found on the A-Z list of library databases within Portal.
Photo from Creative Commons: Flickr: By Howard Lake