Overdraft facilities have been a key driving factor for increasing banks’ revenues and profits, with charges or interest rates levied on the amounts withdrawn, according to a new study on ASDReports

Tuesday 15 July 2014, Amsterdam

Report description overview:

The new report now available on ASDReports, discusses the various trends relating to current accounts – also known as checking accounts – across the world, and the strategies adopted by banks to increase profitability. The report highlights emerging trends in the current account markets in America, Europe, Asia-Pacific, and the Middle East and Africa, as well as providing analytical insights into the key emerging trends of the current markets arising because of the regulatory and economic developments in these regions.

The difference:

• Gain insights into the current accounts markets of developed and emerging economies in the Americas, Europe, Asia-Pacific, and the Middle East and Africa.
• Understand the amendments brought about in current account markets following the global financial crisis.
• Gain insights into key operational and regulatory trends in key current account markets.

Report highlights:

Due to changes in regulatory frameworks and competitive dynamics, retail banking and its current account business have changed gradually during the last decade. Despite initiatives taken by banks to retain customers, the current accounts market in developed economies recorded growing instances of account switching. Improved customer service, attractive reward programs and financial incentives offered by banks are the main factors encouraging customers to switch their primary banks.

In emerging economies, pricing has been the primary reason for the low volume of banking customers. As pricing is affected by cost pressures and changing customer expectations, banks are adopting a number of product and pricing strategies in the form of loyalty programs, incentives, packaged current accounts and customized product offerings to entice customers. Furthermore, with increasing technological advancements, banks are encouraging customers to use low-cost banking channels to conduct banking transactions, resulting in reduced operating costs and improved profitability.

Governments and financial institutions in emerging economies such as Brazil and India are striving to bring the unbanked population into the formal banking system. They have launched programs to increase financial literacy and awareness of the benefits of banking products. Banks in these countries offer basic and simplified current accounts with very low banking charges to make them affordable for rural and low-income customers.