The new players making life tough for high street banks

New research from Leeds-based digital marketing agency Stickyeyes said that the rapid rise of price comparison sites and payday loans providers has “completely disrupted the marketplace at the expense of the traditional high street banks who are struggling to compete”.

The payday loans search volume has been the fastest growing market, increasing by 218 per cent from 2007 to 2011, from 2,124,324 to 6,770,445 total annual search impressions, according to the report.

“This record level of growth has resulted in a significant rise in new entrants making the marketplace one of the most hard fought in terms of top ranking positions in Google.” And MoneySupermarket leads the organic rankings for nine out of ten keyword markets including high volume markets such as loans and mortgages, the report found. Compare the Market was the top performing brand in the social media score card, produced by Stickyeyes.

Glen Conybeare, chief commercial officer of Stickyeyes, said retail banks are “certainly in trouble”, adding: “Try searching Google for, ‘best current account’ for example and you’ll find very few traditional high street banks.

“Where they do appear is in the paid search adverts, so while others are getting their traffic for a very low cost having deployed a content rich search engine optimisation strategy the banks are having to buy their clicks. Ultimately this means the same customer will cost the bank more. If the comparison sites were not enough of a threat supermarket giants are also investing heavily.”

Leeds-based Asda, for example, recently launched a massive marketing campaign to promote its financial services to consumers.

Kirsty Ward, head of the newly rebranded Asda Money, said there is “growing mistrust of bankers” and increasing demand among customers for new players in the sector.

Banks have been plagued with controversy in recent times with big bonuses, the mis-selling of financial products and the Libor rate debacle denting their image.

Mr Conybeare said: “Is it really the case that these relatively new entrants are eating the old, traditional retailers’ luncheon? And the answer is, yes, they kind of are.”