The opinions expressed here are those of the authors. They do not necessarily reflect the views or positions of UK Finance or its members.

Over time, regulation tightened, particularly around the suitability of bundled insurance and whether products delivered fair value. The compliance burden increased, and many banks stepped back from the model. 

Customer engagement was also different then. There were fewer opportunities to sell these products. Before mobile banking became the norm, interactions were largely tied to branch visits or when taking out a loan. 

Today, the environment is different. Digital engagement is constant and opens the door for a reimagined form of subscription banking.

The case for revisiting subscription pricing

There are four good reasons why it deserves another look:

1. Revenue mix – Opt-in subscription income streams are seen by investors as more predictable and higher quality than income tied to interest rates or interchange.

2. Customer relationships – Customers holding more products are typically more loyal and more likely to repurchase.

3. Consumer behaviour – People, especially younger customers, are now very comfortable paying for monthly subscription services.

4. Technology – Modular, cloud-based platforms make subscription propositions easier to build, test and adapt.

Yes, the regulatory bar is higher than it was in the 2000s. Customers should not pay for services they do not understand, do not need, or cannot use. By embracing these principles, banks can build trust and offer packages that genuinely deliver value.

What we are starting to see

The market is active, but no single winning model has emerged. 

Broader lifestyle elements are appearing alongside traditional benefits. In some cases, customers can choose between options such as streaming services, cinema access or dining rewards. There is experimentation with wellbeing features, including remote GP access and digital health services.

However, most offers remain largely fixed, with limited scope for customers to tailor them.

What needs to be considered when designing a subscription package?

In designing subscription packages there are key questions that need to be addressed:

• What are you trying to achieve - is the priority short-term revenue or deeper, longer-term relationships?

• Who are you targeting – and what does that segment genuinely value.

• How the package is designed and priced – there are multiple architectures that can be used, each with pros and cons. Getting the architecture right will determine to what extent cross-sell and upsell can be achieved along with customer fit.

• Whether the proposition clearly demonstrates fair value – the FCA’s Consumer Duty, and in particular the Fair Value provisions, provide an opportunity for firms bringing new packaged offerings to market to build trust by aligning price transparently with customer benefit.

The degree to which banks get these answers right will determine whether subscription pricing really is the next big chapter in UK retail banking.

For a deeper look at the case for revisiting subscription banking, and the questions that shape effective design, see our detailed analysis.