Summary Overdraft charges are a big money-spinner for banks and constitute 36% of their current account revenues according to the Office of Fair Trading. However, the overdraft market is facing pressures as evolving customer behavior and regulatory pressures squeeze profitability.
Synopsis - Understand how changing customer behavior and regulations are impacting on overdrafts. - Discover what banks can do to make their overdraft propositions more attractive to customers.
Reasons To Buy - What are the key trends affecting the overdraft market? - To what extent do customers use overdrafts? - What can banks do to increase the profitability of overdrafts?
Key Highlights Banks generate £46 on average from overdraft revenues annually on a standard current account.
Overdraft usage has declined since the 2008 crisis as households have become wiser about expensive sources of borrowing.
82% of UK current account holders believe overdraft charges are too high and 70% believe they are too complex.