Bank Marketing International

8/7/2019 Bank Marketing International

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BankMarketingInternational

June 2006 Issue 190

03-05 NEWS

■ GE Consumer Finance teams up with eBay■ BBVA launches third baby loan campaign■ Barclays offers free anti-virus software

■ Chase rolls out first Spanish language ad campaign

06 PACKAGING THE MASS MARKET

South Africa’s Absa has developed a packaged bankingproduct in conjunction partly with UK parent Barclays

07 LAND OF OPPORTUNITY

Ireland’s leading retail bank, AIB, has begun to offer adedicated service for the country’s large Polish community

09 CAMPAIGN OF THE MONTH: SANTANDER

Spain’s Santander is six months into a comprehensivemarketing campaign aimed at growing market share andincreasing cross-sell ratios among key customers

10 TRACKING THE VALUE OF SPORTS SPONSORSHIP

BMI talks to Ron Schneier, general manager of NielsenVentures, about the company’s Sponsorship Scorecard

15 EUROPE’S MOST TRUSTED BRANDS

European consumers value nationality, mutuality and/orstate-participation, and market size when judging thetrustworthiness of banks, according to a sur vey

VRL Publishing

Citibank Directproves a huge hitwith US consumers

DIRECT BANKING

Charles Prince, CEO at Citigroup, hasrevealed that Citibank’s new direct bank-ing operation, launched just two monthsago (see BMI 188), has proved to be a hugesuccess for the US financial giant. Citibank

Direct has raised some $3 billion in depos-its over the first eight weeks, two-thirds of which is new money.

“In the first two days after launching, wehad ten times the volume we predicted,” hesaid at a presentation on 1 June, adding thatthe $3 billion raised so far is the equivalentof opening 23 branches.

Citibank Direct forms part of a growth-oriented restructuring of Citigroup’s opera-tions, which includes expanding its branchand electronic distribution networks, signifi-cantly growing its international business andconcentrating on cross-selling through bet-ter divisional integration and more efficientmarketing.

Customers who sign up to Citibank Directmust have both a deposit and a transactionalaccount with Citibank already. “You cannotjust have a deposit relationship – we want afull relationship with customers. This is not atraditional internet bank,” Prince added.

Citibank Direct account holders are ableto access their account at Citibank’s near1,000 branches and over 3,000 ATMs.

Prince said that Citibank Direct had beenhelped by Citibank’s existing, successful

online retail banking service (www.citibank.com). It was ranked last month by comScoreas the US online bank with the best cross-sellratio (see BMI 189).

Some 40 percent of customers who openaccounts via www.citibank.com live outsideof the bank’s branch network areas. Throughits new internet bank, the bank said, it hopesto reach many more customers.

Prince stressed that Citibank Direct fur-ther strengthens Citibank’s overall standingin the online market, a market that is grow-ing in importance as the role of the branchchanges in the distribution mix.

“We are better positioned for the ultimatemove to online banking. Eventually, onlinebanking will become the dominant way of doing banking,” he said.

HSBC awards global customerdecisioning deal to Experian-Scorex

MARKETING TECHNOLOGY

HSBC has selected customer managementtechnology from Experian-Scorex, the globaldecision analytics business of Experian, tosupport the bank’s lending decisions aroundthe world.

The contract relates to the UK-based ven-

dor’s Strategy Management software tool andwill result in all of HSBC’s global businessesimplementing Strategy Management in a con-version process to be completed by 2009.

The financial terms of the contract werenot disclosed, but in an interview with BMI ,George Lennox, senior manager, group creditand risk at HSBC, agreed that describing themove as a “multi-million pound, multi-yearglobal deal” was a fair summary.

According to Lennox, the system – chosenafter an extensive vendor evaluation that ledto HSBC’s incumbent primary provider FairIsaac being displaced – will enable the bankto implement bespoke decisioning techniquesand strategies for individual customers whenthey apply for new accounts or credit. Initial-ly, the bank plans to use the solution withinits new business decision environment, butover time it will deploy the software to help itmanage existing customer relationships.

Strategy Management offers banks theability to consistently deploy scoring mod-

els, portfolio segmentation, decisions andactions to control and manage customerrelationships and improve the quality of riskmanagement. HSBC itself said it expects thesoftware to set appropriate strategies thathelp to manage every aspect of the customer/

product relationship.Keith Gabriel, head of marketing at

Experian-Scorex, told BMI : “As new orexisting customers of the bank apply for anew credit facility, the solution will enableHSBC to grow its portfolios while control-ling the level of risk. Banks want new cus-tomers, but they also need to make sure thatthe customer applying for the product willadhere to the terms and conditions.”

Use of Strategy Management will enablethe bank to score data characteristics, such asdemographic data and financial history infor-mation, to determine the correct strategy tobe taken with a customer. Depending on thespecific profile of an applicant, the bank maybe able to offer a product at a certain rate of interest or, if the level of risk is deemed toohigh, decline an application.

Gabriel added: “Banks like HSBC are veryfocused upon delivering customer benefits socustomer service initiatives such as cross-sell,up-sell and other promotional activities willbe a key focus for them.”

He summarised the principal benefitsof Strategy Management as “enabling thebank to balance the needs of [its] business

– increasing volume, controlling credit riskand reducing operational costs – with theneeds of the customer: timely and appropri-ate product offers and effective customerservice”.

Lennox said that this type of solution hasbecome an integral part of an organisationlike HSBC. “Fast, effective and safe decision-ing means that customers will get a decisionin real time,” he said.

As for benefits accruing to the bank, Len-nox stated that the new software, in combina-tion with scoring and business analytics, “canmake the solution work well for us. We are inthe process of lending money and if we can dothis safely and keep bad debt to a minimum,we are keen to take on customers.”

He added that HSBC is optimistic that the

Other

0.3% (5)Personal

financial

services

47.2% (1)

Commercial banking 23.6% (2)

Corporate,

investment

banking and

markets

24.6% (3)

Private

banking

4.3% (4)

■ GLOBAL RESULTS

HSBC – profit before tax by customer group,

year ended 31 December 2005

Notes: (1) $9,904m; (2) $4,961m; (3) 5,163m; (4) $912m;(5) $26mSource: HSBC


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International

BankMarketing

Bank Marketing International June 2006

investment will provide a healthy return. “Ourhead of IT made it clear that he wanted to see aproper tracking of the benefits [of the new soft-ware] and the ability to say that we have madea decision because of Strategy Management.”

The bank expects to be able to calculateadditional revenue accrued as a direct resultof implementing the solution. “The cost of making decisions will come down as wemake more decisions and [there is] a fixedprice in place for the first five years.

“We have the option to continue year-on-year thereafter. If in, say, ten years wefind something better, we convert. It keepsExperian on their toes. We will spend ana-lysts’ time tracking the benefits [of the prod-uct],” added Lennox.

Consistent tool across the businessThe new software will be implemented with-in all HSBC businesses. “It’s policy,” saidLennox. “[We now run] common softwareacross [HSBC Group] businesses. We liketo run standard technology. We introduceda new strategy in 2000 [and] since then wehave used consistent tools across our busi-nesses. As staff move [within the bank] theyinherit the same technology.”

Emphasising the global nature of the deal,Lennox confirmed that any business subse-quently acquired by HSBC would be requiredto implement Strategy Management.

The conversion to Strategy Managementprovides the bank with a major logisticalchallenge. “Two businesses have been con-verted already, one in the UK and one in theUS, and ten more are ongoing. Conversionacross all of our businesses will not be com-pleted until 2008 to 2009,” he said.

Once fully implemented, HSBC expects thesoftware system to make more than 50 bil-lion customer decisions annually. What Len-nox termed “scalability” was a crucial factorin the bank choosing Experian-Scorex.

“We looked back about ten years to seehow many decisions the old system hadmade. A comparison was made with thenumber of decisions now being made eachyear. With an increasing number of custom-ers and an increasing number of decisions percustomer to be made, scalability is so impor-tant,” he added.

Tough evaluation processLennox and Gabriel both agreed that thevendor evaluation system and bidding proc-ess was extremely thorough.

HSBC had been utilising Fair Isaac’sStrategyWare system since 1996 and it wasin place within HSBC in 42 countries. “Wehad a good relationship with Fair Isaac,”said Lennox. “HSBC and Fair Isaac had donea lot of work together and perhaps we had

been hypnotised into thinking Fair Isaac’ssystems were the best in the marketplace.”

The reason for the vendor evaluation and,ultimately, change of supplier was, accord-ing to Lennox, down to Fair Isaac intimat-ing to the bank that its StrategyWare systemwas to “be sunset” – which he explainedas meaning that no updated versions of thetechnology would be released by the vendor.“So we embarked on the vendor analysis,”he added.

“We tried to do it properly and did notrush. We contacted all of the companies inthe market we knew, eight in all, and receivedfrom them their RFI [request for informa-tion]. Three vendors were shortlisted: FairIsaac, Experian-Scorex and CGI/AMS. We

may only change this sort of technology onceevery ten years so this was a key decision.We spent hundreds of thousands of poundsover the course of a one-year period goingthrough this evaluation process.”

Part of the procedure involved the threeshortlisted vendors spending two days ineach of the three main regions in whichHSBC operates: the UK, North America andAsia-Pacific, presenting to the bank’s main ITand business user groups.

HSBC also visited banking clients of thethree vendors already using the softwaresolutions on offer. “We visited ABN AMROin the Netherlands who had a Strategy Man-agement system in place.”

HSBC assembled a forum of 60 staff toevaluate the three shortlisted systems. “Theymet for two days and to assist them, becausewe are analytical, we scored every product ina number of ways. For example, adaptability,ease of use, robustness and ability to run ondifferent platforms,” said Lennox.

At the end of the two days, the 60 forummembers were unanimous in choosingExperian-Scorex’s Strategy Managementsolution. “It was very unusual that such a

decision was unanimous. It was a complexgroup [of people] and I was quite surprisedsomeone did not disagree. The reason how-ever was obvious: Strategy Management wasclearly better,” concluded Lennox.

Andrew Jennings, vice-president atMinneapolis-based Fair Isaac, told BMI :“The process by which HSBC evaluated theirvarious options was rigorous and fair. FairIsaac has no dispute with the outcome or theway by which it was reached.

“The relationship between HSBC andFair Isaac is still strong and they continue topurchase solutions core to the bank’s futuresuccess from us. We continue to supportStrategyWare for HSBC and our other users,and the decision to continue with that sup-port lies entirely with the bank.”

Douglas Blakey

NEWS




NEWS DIGEST 3

June 2006 Bank Marketing International

www.vrlpublishing.com

CARD MARKETING

GE Consumer Financeteams up with eBay

GE Consumer Finance (GECF)and eBay, the world’s larg-est online auction site, havelaunched a credit card undereBay’s well known online pay-ments brand PayPal.

The new PayPal Plus card is aMasterCard credit card featur-ing a rewards programme exclu-sively for PayPal users. PayPalPlus customers receive extendedpurchase protection for purchas-

es made using PayPal, access tospecial financing offers and inte-grated online account manage-ment and alerts.

Cardholders also benefit fromexclusive access to ongoingpromotional financing offersfrom sellers on eBay, includingdeferred interest and no pay-ments for a specific period of time, by paying using the PayPalPlus card.

The PayPal Plus credit card ispart of a new multi-year creditagreement under which GECFalso plans to launch an eBay-branded credit card.

NEW MARKETING

smile is the latest bankto start podcasting

smile.co.uk, the online directbank run by Co-operative Finan-cial Services, the highly ethicalUK financial services group,has become the latest bank to

publish podcasts in an effort tocommunicate with, and attract,customers (see BMI 188, 186).The bank has signed a deal withleading London-based GCapMedia’s radio station CapitalRadio to become the first spon-sor of Capital Radio podcasts.

The initiative, which wasplanned by digital media agen-cy i-level, includes ten-secondbumper ads, online advertori-als, promotional homepages ande-mail campaigns to CapitalRadio’s VIP club members.

Podcasting is the method of distributing multimedia files,such as audio programmes ormusic videos, over the internet

for playback on mobile devicesand personal computers. Peoplecan listen to a podcast either ona computer or a mobile audiodevice, such as Apple’s iPod.

INCENTIVE MARKETING

UOB offers cashrewards to customers

United Overseas Bank (UOB)has rolled out an incentivedeposit campaign offering cashto new customers in an effort togrow its business. Up until 31August, Singapore-based UOBwill reward customers with cash

for placing fresh deposits into aUOB FlexiDeposit Account. Thecash rewarded is proportion-ate to the amount deposited:S$8,000 ($5,000) gets a S$50bonus; S$15,000 gets S$150;while S$50,000 gets S$600.

Tay Han Chong, regional headof UOB deposits, investments andinsurance strategy, said: “The dealis aimed at rewarding customers,as well as encouraging those whoare not yet our customers.”

The bank is organising UOBBonus Cash Deal roadshows atselected shopping malls, train sta-tions and UOB group branches.

ADVERTISING

HSBC rolls out globalSwings TV advert

HSBC has launched a new glo-bal ad campaign based aroundits substantial golf sponsorshipprogramme. The campaign com-plements the bank’s larger and

primary global advertising cam-paign, Different Points of View(see BMI 183). Called Swings,the new initiative celebrates “theeccentricities of golfers’ swingsand the fact that no two are thesame”, said the bank.

HSBC said it will use theads to support its position asa worldwide sponsor of golf,which extends from the pro-fessional game right throughto the grass roots level of thesport. It will also drive trafficto HSBC’s proprietary website,www.hsbcgolf.com.

Swings launched on 8 June2006 on a huge Jumbotron tel-evision screen outside Madison

Square Garden in New York,helping to build awareness of theHSBC Women’s World MatchPlay Championship at HamiltonFarm, New Jersey (6 to 9 July). Itwill be launched internationallyon global channels such as CNNand BBC World in the build-upto the HSBC World Match PlayChampionship at Wentworth,UK (14 to 17 September) andthe HSBC Champions tourna-ment in Shanghai, China (9 to12 November).

CARD MARKETING

BofA offers bespoke

‘pets on cards’ service

Bank of America (BofA) is fol-lowing the trend for card person-alisation (see BMI 189) by givingits customers the opportunity toput a picture of their pet on anew credit card. The card willalso gather reward points forpet-related expenses and dona-tions to participating animalshelters.

BofA and Hill’s Pet Nutri-tion, a pet food manufacturer,are teaming up to offer thePetRewards Visa Card. Con-sumers can customise their cardusing an image of their pet bysending in the picture by mail orsubmitting a digital photo onlineat www.mypetonmycard.com.They may also choose from threestock card designs.

Cardholders get two rewardpoints for every dollar spent atparticipating veterinary clinics,major pet retailers, farm and

feed stores, and neighbourhoodpet stores. They also receive onepoint for every dollar spent onother purchases. Cardholdersreceive 500 bonus points withtheir first purchase and can earnup to 100,000 points annually.

SEGMENTATION

BBVA launches thirdnew baby loan

Spain’s BBVA has launched athird loan campaign aimed atmothers who have recently givenbirth to, or adopted, children.The loan is intended to helpcover the costs associated with arecent addition to the family. The

main features are 0 percent inter-est, no fees, a €3,000 ($3,770)maximum loan and a three-yearrepayment period.

The bank hopes to make10,000 such loans during thelatest campaign, which will lastuntil 30 September. In the twoprevious campaigns, it granteda total of 19,351 loans worth€58.1 million, approving 98.8percent of applications. More-over, the system of risk analysiswas modified to favour access bypoorer segments, said the bank.

About 90.5 percent of bor-rowers in the previous cam-

paigns were Spanish and theremaining 9.5 percent came fromLatin America, Africa, WesternEurope, Eastern Europe and Asia(in descending order).

Women aged between 28 and35 years old made up 49 per-cent of applicants. Another 26.5percent of applicants were agedbetween 35 and 40, 12.8 per-cent were between 40 and 45,and only 4.1 percent were agedover 45. Some 38 percent of applicants earned less than €900a month and 48 percent earned€900 to €1,800. Only 13.2 per-cent earned more than €2,500.

CORPORATE SOCIAL RESPONSIBILITY

Smith Barney launchesgreen campaign

Smith Barney, the broker-age unit of Citigroup, and theNational Arbor Day Founda-tion, a US non-profit organisa-tion, have launched a co-mar-

keted promotion called Plant aTree/E-Delivery, a nationwideeffort to encourage a switch toonline statement delivery amongSmith Barney clients. The inita-tive seeks to raise environmentalawareness by planting trees innational forests.

For each client who enrollsin the firm’s E-Delivery service,Smith Barney will make a dona-tion in the client’s name to theNational Arbor Day Foundationwhich will be used to plant a treein one of three national forests,including the Huron-ManisteeNational Forest in Michiganand the Ocala National Forestin Florida.




4



Chase launches

its first Spanish adcampaign

ADVERTISING

Barclays offers anti-virus softwareSECURITY

Barclays, the UK’s third-largest retail bank,says it has become the first UK bank to offeranti-virus software to its customers free of charge.

Barclays customers are also being offereda text message service notifying them of newpayees on their online account, helping, saysthe bank, to potentially cut occurrences of fraud attacks.

Barclays is offering its online customersF-Secure’s anti-virus software, which thebank describes as one of the more effective

products of its kind, one which has the fast-est response times as well as automatic hour-ly updates. It prevents viruses and wormsfrom being downloaded to a computer, scanse-mails, protects users against spyware andcomes with free 24/7 technical support.

The agreement with F-Secure allowsBarclays to offer a free service to its onlinecustomers that would normally cost over£45 ($83) for two years.

A number of banks around the worldoffer reduced rates on anti-virus software:Barclays’ arch UK rival HSBC offers a 30percent discount on McAfee products,for instance (see BMI 179), while in May

Atlanta-based SunTrust became the firstbank to begin offering select customers freeanti-identity theft software (see BMI 189).

In January this year, Barclays signed a mar-keting deal with Helsinki-based F-Secure,recommending the company’s products toits broad customer base. As part of the deal,Barclays promoted the offer to its e-mailcustomers in January and it included detailsof the software and tips on secure onlinebanking in the February issue of its customermagazine Talk Money.

“This [new] offer places Barclays in adifferent league to its competitors when itcomes to keeping customers safe online,”said Risto Siilasmaa, president and CEO atF-Secure, in a statement. “By protecting themonline, Barclays is ensuring that, whether onbank business or not, its customers are giventhe best possible service.”

Barclays customers using F-Secure anti-virus software will have the option to upgradeto F-Secure’s flagship Internet Security prod-uct for a reduced price of £9.95 a year, givingthem additional features including parentalcontrol, a personal firewall, spam filters andapplication control.

Chase, the US retail arm of JPMorgan Chase,has rolled out its first television advertisingcampaign aimed at the significant Hispaniccommunity in the US.

The ads are part of a broader new Spanishlanguage campaign called Confia en ti. Con-fia en Chase (Confidence in yourself. Con-fidence in Chase), which includes print andradio ads as well as ads at bus shelters and

other outdoor locations, aimed at what thebank describes as a “fast-growing customersegment”.

The campaign includes a 60-second launchcommercial and three 30-second spots, andfeatures the song Todo Se Transforma (Every-thing Transforms) by Oscar-winning com-poser Jorge Drexler. The ads were developedby Chicago-based advertising agency Lápiz.

The commercials will run until the end of the year in key markets for the bank, includ-ing New York, Chicago, Phoenix, Tucson,Dallas, Houston, San Antonio and El Paso.Chase has major bank branch networks inmost of these markets.

The Spanish language ads complementChase’s new general-market advertisingcampaign, which also launched in May.

The general-market ads will air in TVmarkets nationally in the first country-wide advertising campaign since all 1,900Bank One branches were rebranded Chase(see BMI 187 ). Branches in Michigan andFlorida were rebranded in April, completinga year-long process that brought together2,600 bank branches in 17 states under theChase brand.

The Spanish market continues to attractUS banks. Chase, for instance, also has bilin-gual ATMs, Spanish-language brochures,and multilingual bankers and tellers.

Rival institution Wachovia recentlyannounced that more than 30,000 custom-ers have signed up to receive bank state-ments and statement inserts in Spanish sinceWachovia introduced this service in October2005.

In March, MetLife, the largest US insurer,launched its first Spanish-language website.The company found that Spanish-languagesites are the preferred channel among His-panic online users: 69 percent of Spanishspeakers visit sites in Spanish to buy andresearch products, and 49 percent are morelikely to buy from a Spanish language sitewhen shopping online (see BMI 188).

A green home from WestpacPRODUCT MARKETING

Australia’s Westpac has further emphasisedits ‘green’ credentials (see cover story, BMI 187 ) by launching a new environmental ini-tiative for its retail customers.

Called the EcoNomical Living Program,the marketing drive offers Westpac’s mort-

gage customers discounts on a number of eco-friendly products and services for theirhomes (see table). The programme waslaunched at a special function on WorldEnvironment Day, 5 June.

The EcoNomical Living Program voucherbooklet entitles customers to discounts ona range of products such as solar hot waterheaters, insulation, solar electricity, rainwater tanks, green electricity, and compost-ing and recycling products.

Westpac director Carolyn Hewson said:“Westpac has spent a significant amountof time exploring potential ‘green’ productopportunities. We didn’t want to create astand-alone green product; rather we want toensure that each and every mortgage offeredby Westpac from now on gives our customersthe opportunity to be green.”

The voucher book, which offers aroundA$1,200 ($890) in discounts, also detailsvarious ways in which the bank’s customerscan cut their greenhouse gas emissions.

NEWS

■ DISCOUNT RATES

Selected offers via Westpac’s EcoNomical

Living Program

Supplier Category Product offering

Solarhart Solar hot water

systems

A$400 cash rebate

Origin

Energy

Solar electricity

systems

A$500 cash rebate

Fletcher

Insulation

(Insulco)

Insulation A$75 cash rebate

Tankmasta Rainwater tanks 10% discount

Climate

Friendly

Green power 10% discount

NECO Energy efficient

lighting and

water saving

products

10% discount

Source: Westpac




NEWS 5



Amex ends UK balance offersCARD MARKETING

American Express (Amex) has announcedthat it will no longer be offering balancetransfer promotions to new card customersin the UK.

The debt-shifting facility, an establishedmarketing tactic in the UK, permits cus-tomers to transfer a higher interest credit

card balance onto a card which has a lowerinterest rate – though the process has beencriticised over the past year for encouraginga lack of loyalty, turning cardholders whofrequently shop around into little more thanso-called ‘rate tarts’.

The decision by Amex to abandon the bal-ance transfer option for new customers maybe an early sign that card firms are losingpatience with card-switchers who move debtto avoid paying interest. The balance transferoffers being withdrawn for new customersinclude the Nectar Amex card which offereda rate of 5.9 percent life of balance and theBlue Amex card which offered a 6.9 percentrate life of balance.

“American Express will no longer be offer-ing balance transfers for new customers from13 June. However, we will continue to offer

balance transfers for existing cardmembers,”a spokeswoman for Amex told BMI . “We arefocusing our efforts on attracting customerswho primarily want to take advantage of ourreward schemes, such as Nectar loyalty pointsand MoneyBack, and benefit from these.”

The most recent Morgan Stanley Card

Index concluded that the days of 0 percentcredit card deals are coming to an end, fol-lowing a trend of credit card customersfavouring long-term low-rate deals.

Special introductory offers including 0 per-cent balance transfers can still be found in theUK market, notably from Bank of America-owned MBNA and Capital One.

Research by online comparison websiteuSwitch.com in June said that there were40 balance transfer deals still available inthe UK, the best being HBOS’s IntelligentFinance 4.95 percent life of balance offer.

A PricewaterhouseCoopers study of theUK consumer credit card market , Precious Plastic 2006, estimates a loss of £600 mil-lion ($1 billion) in 2005 for UK card issuersattributable to heavily marketed cheap creditcard offers.

Lloyds TSB launches

cardless UK loyaltyprogramme

LOYALTY PROGRAMMES

Lloyds TSB, the UK’s fifth-largest retail bank,has launched a cardless reward programmetargeting UK sports – in particular, football– fans.

The concept has been developed by LloydsTSB’s Cardnet card acceptance service, a jointventure between Lloyds TSB and US-basedFirst Data, the world’s largest card processor.Cardnet has teamed up with UK-based com-

pany Reward, one of Europe’s largest sportsloyalty companies, in a promotion designedto reward supporters for the loyalty theyshow to the football club they follow.

Credit and debit card customers who reg-ister for the service will not be required tocarry a plastic loyalty card to collect rewardpoints. To collect points, cardholders reg-ister their payment card details with theirfavourite football club and purchase goodswherever they see the Reward logo at a par-ticipating Cardnet merchant. The points areautomatically collected when the transactionis processed.

For every £1 ($1.80) spent at participatingretailers, cardholders can collect between oneand 20 points. Points can then be redeemedwith the football club for a range of rewards,such as a half-time penalty shoot-outs withplayers, signed memorabilia or a seasonticket.

Kevin Coles, head of business enterpriseat Cardnet, said: “This is a new and excit-ing development in the way customers arerewarded, giving them something of uniquevalue that money cannot buy. The new proc-ess also avoids slowing down the payment

process at the point of sale.”The loyalty scheme is initially being trialled

with Scottish football club Aberdeen at the endof June, but will be extended to other clubsthroughout the UK in August. UK footballclubs already signed up include Birmingham,Portsmouth, Manchester City, Watford and 22smaller clubs in the Conference League.

Reward has established a network of strategic retail partners including Dixons,The Link, The Automobile Association andTesco.com, the UK’s largest grocery homeshopping service.

Gavin Dein, CEO at Reward, said: “Retail-ers who understand the passion that sportsteams generate and the buying power of theirfans now have the opportunity to attract newand loyal customers, [and encourage] theirexisting shoppers to shop more often.”

UK consumers return to traditional

financial service providers

DIRECT BANKING

Online financial service providers in the UKare losing ground in the savings market,according to research conducted by marketresearch group GfK NOP. For the first timein five years, more online savings accountswere opened with traditional providers (69percent) than purely online providers (31percent) during 2005.

GfK NOP’s findings suggest that a nar-rowing of price differences has resulted in

consumers taking comfort in the benefitsof the multichannel approach – reinforcingthe trend for the massive branch buildingprogrammes many banks are now undertaking.

Additionally, the research revealed that 39percent of the 3 million consumers who con-duct their financial services online say thatthe internet is not their preferred method, butthat they tolerate an online service in order toreceive a cheaper product.

An additional 500,000 people are evenmore sceptical, stating that while they active-ly bank online, they are unhappy doing so.

GfK NOP asserts that these savings mar-

ket trends provide lessons for the rest of thefinancial services market. Its findings suggestthat consumers who are less willing to engagein online financial services are prepared toovercome their resistance to the channel if itmeans a better return on their money.

“It is clear that traditional players reversedthe flow of savings money to online-onlyplayers by becoming more price competi-tive [and have traded] on the multichannel,

good service and value message to win busi-ness back,” said GfK NOP. “The remoteproviders will have to work hard to keepcustomers.”

The results are in contrast to May’s com-Score US survey of online financial services(see BMI 189), which showed that nearly40 million people logged into their onlineaccounts during Q4 2005, an increase of 27percent from Q4 2004 – though it did pointout that growth in online banking adoptionis slowing.

The big story in 2005, stated comScore,was the growth of the online, high-interestsavings market in the US.




PRODUCT INNOVATION: ABSA6



Packaging the mass market

South Africa’s Absa has developed a packaged banking product, FlexiSelect, aided by UK parent Barclays.The group is marketing the account at the mass market, claiming FlexiSelect will usher millions of SouthAfricans into the financial mainstream. Stafford Thomas reports from Cape Town

Absa, South Africa’s second-largestretail bank, is targeting the country’ssignificant mass market with a new,packaged banking product akin to

the Additions range of bundled accounts that

its parent Barclays has established in the UKretail market (see cover story, BMI 180).

Speaking to BMI , Sonja van Vliet, Absa’sFlexi Banking Services general manager,emphasised that FlexiSelect is not targetingthe unbanked. “It is aimed at the banked,low-income mass market that the industryhas viewed as a globular mass with possiblepotential in the future.”

Van Vliet said that banks had failed to graspthat, correctly approached, the mass marketoffers great potential. This was highlightedby a study started two years ago by FinmarkTrust, a non-profit organisation. Van Vlietsaid she was part of the Finmark team thatundertook a detailed market segmentationexercise and a study of low-income families’uses of, and need for, financial services.

“The study showed that irrespective of income, people’s financial services needs areuniversal,” she said. In essence, these needsare transactions, savings, insurance and cred-it. However, in low-income markets afford-ability plays a key role, making it unrealisticto offer what van Vliet describes as an “all ornothing product”.

From this conclusion, FlexiSelect was born.

The account offers customers who have amonthly income of over ZAR2,000 ($300)a series of options which serve as buildingblocks to create a package of up to 16 finan-cial services. In this respect, FlexiSelect differsradically from all-in-one packaged productssuch as Barclays’ Additions, said van Vliet.She added: “The FlexiSelect concept actuallyoriginated prior to Barclays’ acquisition of Absa, but they have provided impetus.”

In its most basic form, FlexiSelect is a debitcard-based product which offers customersfixed fee or pay-per-use options for transac-tions that can be undertaken in branches,stores or via an ATM, mobile phone or theinternet. This basic account gives access, bychoice, to other add-on services, some ‘firstworld’ and others reflecting the unique needsof South Africa’s low-income market.

Among FlexiSelect offerings previously notavailable are overdrafts, mortgages, creditcards and vehicle finance. Access to these serv-ices will be based on an evaluation of a cus-tomer’s “savings behaviour”, said van Vliet.

Loan facilities would, for example, startat the micro-lending level where, she said,Absa’s interest rates are the “market’s low-est”. At present, Absa’s rates range from 25percent to 38 percent per year, though the aimis to reduce these to the upper end of normalcredit advances – about 18.5 percent. Respon-sible management of a FlexiSelect accountcould also entitle a customer to a maximumZAR2,000 overdraft facility for “emergencyneeds”, said van Vliet, and for some a creditcard could be “a potential objective”.

Cross-selling platformsAbsa will also use FlexiSelect as a cross-selling platform. Again offerings are basicand include household goods insurance withlimited burglary cover, term life and perma-nent disability insurance up to ZAR50,000,and hospital insurance plans.

Another insurance product in FlexiSelect’sline-up is one that is a focus of the vast major-ity of low earners: funeral cover. Absa’s offer-ing extends to customers and their immediateand extended family with cover ranging fromZAR6,000 to ZAR10,000. A policy thatwill provide bridging finance in the event of

a breadwinner’s death is also available. Theproducts are underwritten by Absa.

Typical of packaged products, Absa has dan-gled a number of free services as an attraction.Worth ZAR22 per month, according to vanVliet, many have a typical South African slantand include emergency private medical evacu-ation, access to medical advice by telephoneand a legal assistance helpline. A helpline andfree counselling for victims of assault in whichHIV infection is feared are also planned.

FlexiSelect was introduced to Absa branchstaff in mid-May and, backed by a majortelevision campaign, launched on 9 June tocoincide with the start of the FIFA WorldCup. In an intensely football-loving country,the campaign, backed by print media andradio advertising, is guaranteed to reach mil-lions. Whether it will convince them remains

to be seen. “It will not be an easy product tomarket,” conceded van Vliet.

Emergency financeFinancial literacy constraints are among the

challenges Absa faces. Many of FlexiSelect’sofferings, particularly fixed deposit savings,compete with entrenched social traditions, themost popular of which are burial societies andstokvels (savings clubs), that evolved out of a need for emergency finance. In both, mem-bers contribute money in return for access tofunds. Finmark’s study found that 39 percentof fully banked, low-income earners belong toa stokvel and 22 percent to a burial society.

FlexiSelect’s initial target market will beAbsa’s existing client base. This containsabout 600,000 potential customers, aroundone-third of South Africa’s total banked,lower income market, said van Vliet.

FlexiSelect is likely to face formal competi-tion in the near future. “All banks are busywith their own version,” said Colin Dorian,managing director of banking consultingfirm Insightworx. The catalyst, he added, isthe Mzansi Account, which was introducedin 2004 to provide the most basic bankingfacilities to low earners.

Dorian, who headed the Banking Associa-tion of South Africa’s team that developed theMzansi Account, believes the demand on localbanks to offer more competitive products will

grow and, in the process, “a lot of downwardpressure will be put on fees and margins”.

Scope for this pressure is evident in FlexiSe-lect. For its pay-per-use option, for example,customers face an industry standard ZAR3 feefor the first ZAR100 withdrawn at an ATMand ZAR0.90 for every ZAR100 thereafter.A debit order costs ZAR4.75 and depositingcash over the counter costs 1.05 percent of the deposit. FlexiSelect’s fixed monthly feeoptions range from ZAR55 for five transac-tions to ZAR75 for 15 transactions.

Contrast this with a bank in a more devel-oped country – Lloyds TSB’s all inclusive,UK entry-level Select package at the equiva-lent of ZAR90 a month plus over ZAR250per month in free add-on benefits – and thereason Dorian feels banking costs in SouthAfrica must decline becomes apparent.




SEGMENTATION: AIB 7



One year after rival Bank of Irelandstarted to cater for Ireland’s grow-ing number of Polish, Chinese andRussian immigrants through a dedi-

cated marketing programme centred largely

on foreign-language staff and product lit-erature (see case study, BMI 179), AIB, thecountry’s largest retail bank, has itself startedto aggressively target Ireland’s large Polishcommunity.

The bank has set up a new Polish servicedesk at its direct banking call centre in Naas,Ireland, installed Polish-speaking staff in12 branches and started to offer a range of marketing material in Polish. It has also setup a dedicated Polish section on the bank’swebsite (www.aib.ie/polska) and, significant-ly, launched an online international paymentsremittance service.

The latter initiative is particularly centralto the bank’s plans. Customers who use AIBinternet banking can make international pay-ments of up to €5,000 ($6,297) per day, inPolish zloty, euros and a range of other cur-rencies at a price cheaper than the standardbranch paper system. In 2003, AIB customersmade almost 6,000 payments to Poland; by2005 this had risen tenfold to almost 60,000payments, according to the bank.

Polish-speaking staff, contactable throughin-branch telephones, have been trained toexplain account opening procedures, regis-

tration for AIB telephone and internet bank-ing, and the bank’s international paymentsfacilities.

In an interview with BMI , Grainne Clancy,head of customer propositions at AIB, saidthe move was simply a reaction to Ireland’schanging demographics: around 300,000immigrants now live in the country, a figureset to rise to 1 million by 2030.

The predominant foreign community is thePoles – there are currently around 120,000 liv-ing in Ireland – as skilled and manual expatri-ate workers have been drawn to the country’sbooming industries. The community is com-plemented by Polish newspapers and othermedia (including a dedicated television chan-nel), and established Polish restaurants, pubsand shops. As in the EU, work permits are notrequired for Poles working in Ireland.

“Given the scale of this community and ourstrong affinity with Poland through our sub-sidiary BZWBK [Bank Zachodni WBK], AIBis very well placed to support their needs,”said Clancy. Wroclaw-based BZWBK, in

which AIB has a 70.5 percent shareholding,had total assets of PLN29.4 billion ($9.2 bil-lion) as of 31 December 2005 and is Poland’sfifth-largest bank.

This relationship will prove extremelyvaluable as competition for minority seg-ments hots up. BZWBK has instigated localawareness campaigns in Poland flaggingup the new AIB service and the two bankshave established promotional internet links.BZWBK has also sent staff from Poland tohelp run AIB’s direct banking desk.

AIB has supported the launch in Irelanditself through an extensive advertising andmarketing campaign. According to Clancy,the bank has targeted three Polish languagenewspapers and magazines in Ireland, aswell as the digital television channel. It hasadvertised in the Irish press – in The Evening Herald , for instance, which runs a regular,eight-page Poland-focused supplement inEnglish.

The bank has also used Izabela Chudzicka,a high-profile, Polish television celebrity, asthe face of its marketing campaign – in aneat twist, Chudzicka used to be employedat BZWBK. To support the product launch,

AIB also commissioned market research fromIrish agency Amárach, which canvassed thePolish diaspora in Ireland.

A strong growth driver Bank of Ireland, AIB’s largest competitor inthe country, has also invested heavily in theimmigrant sector as a strong growth driver.Without giving away specific customer num-bers, Catriona Brown, segment manager atBank of Ireland, said that the return from itsforeign language marketing had been “huge-ly successful, especially in terms of feedbackfrom front line staff”.

The bank has so far placed 40 bilingualstaff across its branch network (made upof 280 branches) and operates a six-strongforeign language helpdesk accessible by tele-phones in branches. Brown said that the bankhas not tailored specific remittance productsfor this customer segment as it has “similarneeds to our overall customer base. [Indeed],Bank of Ireland is launching an upgradedonline service, outlining further enhance-ments for the coming month which includethe development of international paymentsfor all customers.”

At the start of June, Bank of Ireland wasawarded the Retail Banking ExcellenceAward at the KPMG Financial ServicesAwards 2006 in Ireland, the second yearrunning that the bank has won this category. Judging criteria included market perform-ance, innovation, customer service, employ-er of choice and corporate responsibility.The judges highlighted the bank’s customerservice initiative – called Changing For You– particularly innovations such as dedicatedservices for migrant workers.

In its 2005 annual report, AIB said thatits Republic of Ireland unit delivered a prof-it increase of 24 percent last year. Its AIBPoland division had a strong year too, asprofits grew by 13 percent: BZWBK said itscustomer numbers increased by more than100,000.

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■ GROWTH MARKET

AIB – deposit growth across business

segments, 2005

Source: AIB

Land of opportunity

Ireland has attracted a significant number of skilled and non-skilled immigrants to its booming, fluideconomy. AIB has begun to offer a dedicated service for the country’s large Polish community – pitchingitself against rival Bank of Ireland which has also picked out this segment as a growth opportunity




Anew report from professional serv-ices firm PricewaterhouseCoopers(PwC), entitled Winning the Battlefor Growth: Building the Customer-

centric Financial Institution, shows banks

are putting enormous belief in their ability tocross- and up-sell products to both new andexisting customers. Strong, effective market-ing and branding is also seen to be critical, asis the role of customer-facing staff.

Over 250 senior executives in financialinstitutions across the globe were surveyedon the subject of customer-centric growth forthe report, which was produced in associationwith the Economist Intelligence Unit.

Asked to identify the obstacles standingin the way of becoming more customer-centric, 48 percent of survey respondentspointed to problems with technology. Manyfirms are still unable to share customer dataacross products, business units or customerchannels, depriving institutions of a singleview of the customer and limiting the abilityto cross-sell effectively.

Many of the leading financial servicesgroups have been focusing on improvingtechnology to maximise cross-groupcommunication. In a recent presentation(see page 1), Charles Prince, CEO atCitigroup, for instance, put improvedgroup communication via better technologyas one of the key drivers for his company

– “breaking down the technology silos”, ashe put it.

Cross-selling is ranked as the mostimportant tool for organic growth over thenext three years in the PwC report (see tableleft ), and a bank’s existing customer baseis believed to be the prime target for cross-selling new products and services (see alsoSantander, page 9). Geographic expansioninto new markets, a traditional strategy fororganic growth, was placed fifth in the list.

Sixty-seven percent of people questioned for

the PwC report said improving informationtechnology systems is the top strategicpriority for the next 12 months as companiesaim to retrieve relevant customer data in real-time and analyse customer behaviour in orderto anticipate and meet their needs.

Quality staff and serviceWhen asked what factors attract new cus-tomers to an organisation, the most popularanswer was the quality of a bank’s serviceand its staff. The underlying brand strengthand brand awareness was second, while rec-ommendations from existing customers wasa close third. Surprisingly, perhaps, advertis-ing featured down the list, and mass-marketadvertising and marketing campaigns rankedthe least critical (see table above).

Throughout the survey, respondents kept

returning to the importance of the qualityof customer-facing staff. Some 65 percentof respondents said well-trained, responsivestaff are likely to make their existing cus-tomers spend money with them. Just overtwo-thirds of respondents also said that thequality of service and staff would attract newcustomers to their organisations.

However, many institutions have been bet-ter at the rhetoric of customer-centricity thanthe practice, with 38 percent of respondentsagreeing that their organisation is structured

around products, not customers, and 33 per-cent citing a lack of good information on cus-tomer satisfaction and expectations.

When asked where they had investedthe most effort over the past three years toimprove human capital performance, nearly50 percent of survey respondents said theyhad invested the most effort into product andservice training for staff; 43 percent plan tocontinue doing this over the next 12 months.

Jeremy Scott, chairman, global finan-cial services group at PwC, said in a state-ment: “Currently, only 11 percent of surveyrespondents have a customer service head incharge of the customer experience. There isperhaps something to be learned from someof the successful retailers who have growntheir profits by putting the customer at theheart of their operations.”

MARKET STRATEGY: CROSS-SELLING8



The hard sell

Cross-selling, driven by effective technology, has become the most important organic growth strategy forbanks, according to a new report. Customer-facing staff and brand awareness are the other key factors,though, surprisingly, banks rank advertising as much less important in the marketing mix

■ GROWTH

What are likely to be your organisation’s top

three sources of organic growth over the next

three years? Select up to three responses

Existing customer penetration (cross/

up-selling) with new products/services

57%

New customer acquisition with existing

products/services

52%

Existing customer penetration (cross/

up-selling) with existing products/

services

50%

New customer acquisition with new

products/services

35%

Geographic expansion into new markets 33%

Changes in channel and distribution

strategy

25%

Source: PwC

■ CUSTOMER LOYALTY

What are the factors that attract new customers to your organisation?

Level of importance

Critical Unimportant

1 2 3 4 5

Quality of service and staff 67% 26% 6% 0% 0%

Underlying brand strength and awareness 43% 36% 16% 4% 1%

Recommendations from existing customers 42% 35% 16% 4% 2%

Product or service differentiation 42% 36% 16% 4% 1%

Financial performance 20% 37% 22% 11% 8%

Targeted advertising and marketing campaigns 17% 41% 25% 10% 5%

Performance of intermediaries 13% 29% 29% 11% 14%

Product packaging 10% 30% 29% 14% 15%

Special promotional offers 10% 22% 21% 17% 27%

Mass-market ad and marketing campaigns 6% 18% 35% 18% 22%

Source: PwC




Since the start of the year, Santander,Spain’s largest retail bank, has beenrunning a comprehensive customeracquisition and cross-sell campaign,

using incentives such as discounted fees to

draw in new and old customers (see BMI 186). The three-year initiative has a simple,definable, trackable goal: to grow mass indi-vidual market share by two percentage pointsby the start of 2009.

The campaign, called We Want to be YourBank, has initially targeted Santander’s 2.2million retail customers in Spain, looking toraise the number of products per customer(ppc) by eliminating fees on a range of serv-ices for people who already hold a Santandermortgage, payroll deposit account, pensiondeposit account or pension plan.

Banesto, Grupo Santander’s other Spanishbrand, is not involved in the campaign and isinstead strategically running its own custom-er acquisition programme (see BMI 182).

At the time of the launch, Santander saidits goal was to become the premier financialinstitution for retail customers, with a focuson the quality of service and variety of prod-ucts. “The We Want to be Your Bank plan isnot a campaign product, but a new relation-ship model with no expiry date for currentand future customers,” said the bank.

Under the initiative, Santander has elimi-nated administrative and service fees on cur-

rent and savings accounts, domestic transfersand money movements within the EuropeanUnion up to €50,000 ($63,000), cheque depos-it and issuance, balance consulta-tions, movements and cashwithdrawals through allof the Santander network’sATMs, and on the issuanceand renewal of debit cards.

Fees, in particular, wereproving a bugbear with Span-ish consumers, said Santander:some 17 percent of complaintsin 2005 to Banco de España, thecountry’s central bank, concernedfees. The elimination of these feeswould cost Santander €82.5 mil-lion, the bank estimated.

In a presentation at the launch

of the campaign in January, Santander saidthat in 2005 it had increased the number of what it calls ‘linked’, or active, customersby 4 percent, to almost 3 million customers.Linked customers have an average number of

5.17 products and generate annual revenueof €1,007. In contrast, ‘standard’ customershave an average of 2.38 products and gener-ate annual revenue of €297, while so-called‘inactive’ clients have an average of 1.48 ppcand revenue of €51.

The bank added that mortgages and trans-actional business have become the primarydrivers of cross-selling, and, on average,customers who have mortgages have sevenproducts.

Seven commitmentsSantander detailed seven commitments for2006, driven mainly by the We Want to beYour Bank campaign. These are: an improve-ment in market share; more cross-selling andlinked accounts; an improvement in custom-er satisfaction indicators; diversified loangrowth of over 15 percent; customer fundsgrowth of around 12 percent; improvementin efficiency of 2 percentage points; andmaintaining credit quality risk.

The bank has supported the marketingcampaign with a significant advertising blitz,using the agency McCann for creative workand Arena, the local arm of media planning

group MPG, for the media execution.Santander has targeted all media channels,

particularly television, plus direct mail andradio, and has placed a significant amountof marketing material in branches. Of thebudget for television, 33 percent has gone tothe dominant broadcaster TVE, 32 percent

to Telecinco, 29 percent to Antena 3 TV and6 percent to Television Cuatro – all the maingeneral television broadcasters.

Santander has also advertised in most of the major Spanish publications, national andregional, dailies and weeklies, including El País,ABC, La Razón, El Mundo, Expansión, CincoDías, El Economista, La Gaceta de Negocios and the weekly Actualidad Económica. Taglines complementing the advertising includenot only ‘We want to be your bank’ but also‘We are starting over’ and ‘We are rethinkingeverything we do for customers’.

The bank has also made good use of directmail, arguing that the medium allows it toannounce, from one day to the next, that itsfees are being eliminated on a range of servic-es. Santander used the direct mail concept toits fullest, writing to all 2.2 million custom-ers and any potential customers affected bythe changes detailing what the new campaignwould mean to them.

Asked by BMI how the campaign wasprogressing, Santander said in a statement in June that “customers as well as employeeshave responded positively”. It added thatthe plan includes not only the elimination of

fees and the advertising campaign, but also anew focus on customer service that includesperformance objectives and new methods for

dealing with customer service issues.“This directly addressesthe perception that, as a

large bank, we aren’t asclose to our customers as

the local savings banks tryto be,” said the bank.

In its Q1 2006 results,Santander reported that it had

recorded a “moderate” increasein revenues due to the impact of

We Want to be Your Bank, addingthat a very positive quarter for the

group as a whole “makes us opti-mistic about surpassing our initial

expectations for the whole year”.

CAMPAIGN OF THE MONTH: SANTANDER 9



Talking to the customer

Spain’s Santander is six months into a comprehensive marketing campaign aimed at growing market share and increasing cross-sell ratios among key customers. The bank has supported the project with asubstantial advertising roll-out, including sending personal letters to existing and potential customers




Tracking the value of sports sponsorship

Measuring the value and return on investment of sports sponsorship is notoriously hard. BMI talks to RonSchneier of New York-based Nielsen Ventures about the company’s Sponsorship Scorecard measurement product – a tool which attempts to do just that and more

It is tough, admits Ron Schneier, generalmanager at Nielsen Ventures, to esti-mate the value of sports sponsorship asa whole, let alone track the value and

effectiveness of individual deals. He offers,

when pushed, an estimate of around $7 bil-lion for the US. “The main thing is that anawful lot of people, an awful lot of advertis-ers, spend a great deal on sponsored placedmedia in the stadiums, whether it’s the USOpen or NASCAR, and they have no ideawhat they’re getting.”

Nielsen Ventures, a division of Dutchmedia group VNU, saw an opportunity inthe market and launched its SponsorshipScorecard product at the end of 2004. “Wewere getting feedback from the US marketthat there was very little accountability inthe sports sponsorship arena and that par-ticularly the teams and the leagues felt pres-sure from their sponsors that they needed todemonstrate what [the sponsors] were reallygetting for the their money,” says Schneier.

“The pressure was coming down from theCEOs and CFOs, and they were saying tothe marketing officers ‘Why are you spend-ing $25 million on major league baseball…what am I getting in return!’ The days when

the chairman just wanted good tickets andnice seats, those days are over.”

Based on Nielsen’s established televisionadvertising and programme tracking tech-nology, Sponsorship Scorecard involves

digitising televised sports games and using‘decoders’ – human beings – to measure thetime and placement of all sponsored media.Nielsen Venturesthen matches timeand occurrence tothe company’s ownlocal t e lev i s ionratings.

“Essentially, whatyou have for the firsttime, is a currency,a metric,” says Sch-neier. “Somebodycan say, ‘OK, I paid$25 million or $5million for this sponsorship, I know what Ipaid, I can divide my dollars by my televi-sion impressions and I can look at the costper thousand and how that compares to mynormal, traditional media spend.’”

Comparative analysisThe company has just upgraded Sponsor-ship Scorecard, rolling out a new tool calledComparative Analysis on 5 June this year.The analysis tool, which is based on Spon-

sorship Scorecard, looks to compare thetop three sponsors in major sporting events(see graph left ) and also determine whichin-stadium locations and poster positionsprovide the greatest number of impressionsduring events.

JPMorgan Chase, the number one spon-sor of the US Open Men’s Final, for instance,achieved 162 million impressions per hourduring the event, while Motorola, the SuperBowl’s top sponsor, achieved nearly the sameat 157 million impressions. In the case of theUS Open Men’s Final, JPMorgan Chase’sbrand appeared on both end court and arenastadium ads; however, the end court ad loca-tion generated more impressions than thearena stadium ad (461 million versus 7 mil-lion), according to Schneier.

To date, Sponsorship Scorecard has been

bought by a number of sports teams, leaguesand stadiums – the “sell side”, as Schneiercalls it – but has been less popular on whathe calls the “buy side”, the actual advertis-ers. Moreover, despite the significant sums of

money spent by financial services companieson sports sponsorship, no banks have yetsigned up. Major clients include drinks man-

ufacturers Coca-Cola, PepsiCo andGatorade.

“We’re predomi-nantly heavy onthe sell side and arenow moving muchmore aggressivelyinto the buy side.We haven’t donethe best job of talk-ing to financialservices companies

– we have spoken to Wachovia and Bank of America. Bank of America was very close todoing something last year,” he says.

Moreover, it is active only in North Amer-ica, though Schneier says that it is looking toexpand overseas as sports sponsorship con-tinues to be a major marketing tool for banksin Europe and Asia. “We have been askedabout overseas, but we’re looking for moresupport before we start the service becausethe market size has to be big enough – it’s

quite expensive. The Formula One peoplehave indirectly spoken to us through theiradvertisers but we’re still focused on the US[for the time being].”

One area Nielsen Ventures is getting moreinvolved in is helping companies design thebest advertising to use in sports stadiums tomaximise the adverts’ impact on televisionaudiences. The company is conducting atrial later this year to test different types of advertising hoarding to gauge which workthe best.

Schneier says: “Some of the creatives outthere are terrible. We’re seeing that adver-tisers spending huge amounts of money arethinking about the audience in the stadiumand not the much larger television audience.Are you using the right colours, the rightfonts?”

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■ CHAMPIONSHIP EVENTS

Who got the most impressions?

Source: Nielsen Ventures

MARKETING: SPORTS SPONSORSHIP10



How do you measure the effectiveness of this?




Planning ahead

Retirement financial planning has become a key market for banks across the world. One of the more visiblemarketing tools major financial services companies are now starting to use to increase their knowledge of – and recognition of their brand in – the marketplace is commissioned surveys

Of all the segments promising growthopportunities, one of the most high-profile has been the world’s retire-ment financial planning market.

Over the past decade, as equity markets have

become volatile and governments and com-panies increasingly shift the burden of pen-sion planning onto the individual, financialservices companies have begun to target reti-rees and the retirement segment as a lucrativegrowth market.

This trend has been flagged up by theincreasing number of commissioned surveysby banks on retirement financial planning –research often then used by the banks in theirmarketing and communication, advertising,product development and forward planning.Indeed, while ‘retirement’ has become a bigmarket for banks, market research and sur-veys have become equally visible marketingphenomena.

Citibank, HSBC, Merrill Lynch, Axa andAviva, five of the world’s largest financialinstitutions, have all recently published sub-stantial market research on the subject.

Aviva, the UK’s largest insurance group,for instance, has just rolled out a RetirementIndex under its Norwich Union brand. TheNorwich Union Retirement Index has beencompiled by the Centre for Economics andBusiness Research, one of the UK’s leadingeconomics consultancies and commentators

on trends in the UK and global economy. Theindex tracks changes in pensioners’ incomesand household spending.

What the world wantsHSBC has released details of its second glo-bal retirement study – The HSBC Future of Retirement: What the World Wants. In con-junction with research group Harris Interac-tive and charity Age Wave, and through anewly announced five-year strategic alliancewith the Oxford Institute of Ageing, the 2006research involved some 21,000 consumersand 6,000 employers in 20 countries and ter-ritories, including Brazil, China, Germany,India, Indonesia, Japan, Russia and the US.

The UK bank says that, overall, the studyconcludes that people want to abandontraditional models of retirement in favour

of self-sufficiency and a mix of work andleisure. Given a choice, a higher number of people (36 percent) think their governmentshould enforce additional private savings,rather than increase the retirement age (23

percent), raise taxes (12 percent) or reducepensions (12 percent). Nearly one-half (43percent) of individuals worldwide expresseda desire to fund their own retirement eitherthrough savings or by working later in life,perhaps part-time.

The research reveals that individuals inmost countries want to be primarily self-sufficient when it comes to funding theirretirement. However, a ‘confidence gap’ existsas one in three people worldwide believe thegovernment should bear their costs in retire-ment, compared with around just one in five(21 percent) who believe they will.

Harris Interactive also helped MerrillLynch with what the bank described as its“groundbreaking study that uncovers a star-tling disconnect between how Americansand their employers view retirement” – TheMerrill Lynch New Retirement Study. Some5,111 adults were surveyed across all ageranges and additional sample groups sur-veyed online included affluent people aged25 to 70 and 613 sets of spouses aged 25to 70. Over 1,000 US companies which have100 employees or more also participated intelephone interviews in January this year.

The Merrill Lynch study concluded, amongmany other things, that paying off debt wasranked as the single most important thing todo towards securing a financial future in thecoming year (33 percent). This was followedby saving more (21 percent). More than one-half (53 percent) of the individuals surveyedwere concerned about the amount of debtin their households, yet most (63 percent)expected to have less debt when they retiredand expected to be eventually debt-free (74percent).

Like a piece of Swiss cheeseAt the start of April, Citigroup released thefindings of its 2006 Retirement ConfidenceSurvey, the 16th such survey on sentimentin the US. The 2006 survey, said the bank,showed many Americans’ retirement expecta-

tions are “like a piece of Swiss cheese – full of holes. Many [people] have accumulated onlymodest retirement savings, underestimate theshare of their pre-retirement income they arelikely to need in retirement and have made

no estimate of how much they will need tolive comfortably once they retire.”

The survey was sponsored by US-basedEmployee Benefit Research Institute andsurvey research firm Mathew Greenwald& Associates, and was based on telephoneinterviews with 1,252 individuals aged 25and over in the US, conducted in January. Itfound more than two-thirds (68 percent) of current workers said they and their spouseshave accumulated less than $50,000 in retire-ment savings. Some 88 percent of workersaged 25 to 35 have less than $50,000 savedfor retirement, compared with 52 percent of workers aged 55 and older.

Nearly six in ten current workers (59 per-cent) said they hoped to have a retirementstandard of living equal to or higher than intheir working years. However, when currentworkers were asked if they had calculatedhow much money they will need to retirecomfortably, nearly six out of ten said no.

In addition, like the HSBC survey, the2006 Retirement Confidence Survey foundstrong support for automatic enrolment inemployee pension plans. About two-thirds of employed workers (69 percent) favour auto-

matic enrolment. About one-half of all work-ers said they received employer-providedretirement education; of those, almost one-third (29 percent) reported modifying theirretirement planning as a result of the materialthey receive.

At the end of April, France’s Axa publisheda huge survey of global retirement trends,Axa Retirement Scope 2006. The researchinvolved 6,915 interviews of working peo-ple and retirees in 11 countries, including theUS and Japan. Axa itself is investing a greatdeal in the retirement industry: on 14 June,the company announced it had entered intoa definitive agreement with Credit Suisse toacquire its Winterthur Life unit for CHF12.3billion ($10 billion), a move which will leadto Axa becoming an even stronger player inthe global pensions market.

MARKETING: RETIREMENT 11






NEWS DIGEST 12



SPORTS SPONSORSHIP

Barclays extends golf sponsorship to Asia

Barclays, the UK’s third-largestbank, has increased its supportof world golf by signing a five-year agreement to become thetitle sponsor of the SingaporeOpen. It is Singapore’s largestsponsorship agreement, with aninitial annual prize fund of $3million increasing to $5 millionby 2008.

The deal marks the company’sfirst major sports sponsorship

in Asia. Barclays has made golf a key part of its internationalsports sponsorship programme,as shown by the six-year (2005to 2010) sponsorship of theBarclays Classic in the US and itspromotion of the Barclays Scot-tish Open since 2002.

The Singapore Open ran from1961 until 2001, but a lack of sponsorship support resulted inthe tournament not being heldbetween 2002 and 2004. Thetournament was revived in 2005and the Barclays deal provides amajor boost for the organisers,which will market the event asthe Major of Asia. The 2006Singapore Open will be com-peting with the Canadian Open– which has a $5 million prizefund and runs from 7 to 10 Sep-tember – to attract the world’stop golfers.

PRODUCT INNOVATION

Lloyds TSB launches

‘no strings attached’regular savings account

Lloyds TSB, the UK’s fifth-largest retail bank, has launcheda ‘no strings attached’ regularsavings account. The Lloyds TSBMonthly Saver account will pay8 percent interest on deposits of between £25 ($46) and £250 permonth for two years.

The account is available fornew and existing current accountholders, and customers havethe option of making a depositof £750 when the account isopened. Customers can accesstheir money whenever they wish

and vary the sum saved frommonth to month. However, if they make a withdrawal or missa payment, the funds cannot bereplaced.

The regular savings market inthe UK has become very com-petitive as banks look to attractnew customers and funds usingheadline-grabbing interest rates.HSBC’s regular savings account,by comparison, also offers 8 per-cent on monthly savings up to£250 and is an option for new andexisting account holders – but therate is for a 12-month period onlyand withdrawals are not permit-

ted. HBOS’s Children’s RegularSaver pays 10 percent, fixed forone year, for deposits between£10 and £100 each month.

AFFINITY MARKETING

MUFJ and JR Eastlaunch co-venture

Mitsubishi UFJ (MUFJ), Japan’slargest bank, and East JapanRailway Company (JR East)have reached an agreement onthe provision of financial servicesto JR East’s Holiday for SeniorsClub, a JR East club for seniorcitizens.

MUFJ group companies havealready held seminars on assetmanagement and contributedcolumns on financial topics to JR East’s members-only maga-zine Holiday for Adults.

Following the new agreement,MUFJ companies will provide anumber of new and preferentialprivileged services to club mem-

bers, including better rates forSuper Term Deposit accountswhich have a term of more thanone year and a minimum depositof ¥5 million ($43,500). Newcustomers requesting consultingservices for securities at branchesof Mitsubishi UFJ Securities willbe presented with complementarycopies of a book of shareholderprivileges (effective start date isscheduled for 1 September).

In a joint statement, the twocompanies said they will con-sider broader business tie-upsrelated to the Holiday for Sen-iors Club in the future aimed atleveraging their respective prod-ucts, services and expertise. New

information delivery methodsare also being considered, spe-cifically websites.

BRANCH MARKETING

ABN AMRO openslounge at SchipolAirport

ABN AMRO, the second-largestbank by assets in the Nether-lands, has opened a lounge atAmsterdam’s Schipol Airport,designed to cater for the needs of the bank’s Preferred Banking cli-ents (defined as customers who

have investable assets of at least€50,000 and/or a monthly nethousehold income of €5,000).

Since the bank introduced thePreferred Banking concept in late2004, approximately 70 ABNAMRO branches throughout theNetherlands have opened Pre-ferred Banking Lounges similarto the new lounge at Schipol.

Customers can conduct busi-ness or hold a preflight meetingin a designated conference roomwithin the Schipol lounge. Thenew facility brings to nine thenumber of ABN AMRO branch-es at the airport.

PROMOTIONAL CAMPAIGNS

Bangkok Banklaunches biggest-everpromotion

Bangkok Bank, Thailand’s larg-est bank in terms of assets, haslaunched what it describes as

its biggest-ever promotion. Thebank is offering new credit cardcustomers the chance to win goldin a promotion which has a totalprize pool value of THB7.5 mil-lion ($195,000) during a five-month promotional period.

Every time a new BangkokBank credit card customer spendsover THB1,000 in a single trans-action, they will be entered auto-matically into the competition inan initiative designed to maxim-ise use of the card.

There will be five draws eachmonth from June until October2006. Each month of the promo-tion, a first prize of THB1 millionin gold will be awarded, plus ten

runner-up prizes of THB50,000.In 2005, Bangkok Bank’s pro-

motional offering to new cardcustomers offered the chance towin one of 15 Honda Jazz cars(see BMI 182).

COMPETITIONS

Groupe Caissed’Epargne sponsorsprize for investigativejournalism

Groupe Caisse d’Epargne, thelargest French co-operative, hasteamed up with French journal-

ism school the Centre de Forma-tion des Journalistes to launch aprize for investigative journal-ism. The Prix International del’enquête CFJ-Groupe Caissed’Epargne will form part of thejournalism school’s 60th birth-day celebrations.

Separate categories for thewritten word and audio-visualwork have been created and bothawards offer a €3,000 ($3,800)first prize. Entries are invitedfrom journalists aged under 40who are working in the French language.

CUSTOMER COMPETITIONS

Scotiabank targetsmortgage market andlaunches competition

Scotiabank, Canada’s fourth-largest bank by assets, whichhas historically marketed itself as Canada’s most international

bank, has increased its focus ongrowing its domestic mortgagemarket. Scotiabank is the third-largest player in the domesticmortgage market and has a 17.3percent share of the market.

The bank has upgraded itswww.findthemoney.scotiabank.com website with a suite of homeownership and home financetools, designed, as the bank said,“to help Canadians manage theirhome ownership needs”.

The web campaign is beingsupported by the launch of acompetition giving away a 42inplasma television every day untilthe end of July to Canada-basedcustomers who visit the site.




Nobuo Kuroyanagi, president of Mitsubishi UFJ Financial Group(MUFJ), has said his intention is tomake MUFJ one of the world’s top

five banks in terms of market value by March

2009 – and he believes the path to expansionlies in retail. Retail currently contributes lessthan 20 percent of profits, but the target isto boost the proportion to 35 percent andincrease retail net operating profit by around2.5 times by March 2009.

Kuroyanagi believes MUFJ, the world’slargest bank by assets, will have to be a stronglocal bank which has a large domestic fran-chise before it can expand overseas. MUFJ,formed from a merger between Bank of Tokyo-Mitsubishi and UFJ Bank in 2005 andformally launched on 1 October, inherited astrong retail banking business through UFJ.

Competition for retail business, however,is hardening in Japan. Mizuho, the second-largest player in the market, has implement-ed a bank-wide rewards system through itsMizuho Mileage Club programme, a plat-form for the bank to increase cross-sellingby offering bonus points for transactionswith the bank. Mizuho has almost doubledits sales staff from 364 in 2005 to 600 inearly 2006 and has said it will continue tooffer housing loan consultations during non-business hours.

Resona, the country’s fourth-largest bank,

recently said retail banking and better cus-tomer marketing were key factors in itsgoal to become the “bank of choice” in itsmarkets. Shinsei Bank, the 14th-largest interms of assets, is using innovative market-

ing, branding and products to rapidly gainmarket share (see Campaign of the Month,BMI 183).

In a presentation at VRL’s Retail FinanceChina conference in Shanghai in early May, Jun Kaneda, chief manager of the marketingstrategy department at MUFJ, said: “It is onlythe beginning of our long journey because thebiggest bank does not mean the most popularor supported bank. The challenge for retailbanking is how we can efficiently treat ourcustomers in the right way to minimise ourcost and maximise customer satisfaction.Otherwise, there will be a vicious circle of customer dissatisfaction and problems withthe bank.”

A customer survey commissioned by MUFJfound that bank customers in Japan weredissatisfied with the short opening hours of bank branches and long waiting times. Theyalso felt that going to the bank was a tediousaffair (see graph left ). The bank, on the otherhand, was “caught up with clerical workat the counter and there was inefficient useof human resources at the branches”, saidKaneda. The solution for the bank, he said,was to “expand business hours as far as pos-

sible with minimum increase in labour cost,using technology”.

The UFJ24 project, started in 2003 byUFJ and now being used by MUFJ, seeks toenhance the efficiency of tellers and increasecustomer acquisition by expanding the chan-nel reach and operating hours of the bank.UFJ24 involved the launch of 24/7 opera-tional ATMs, 24/7 call centres and the roll-out of over 500 automated consulting andcontract machines (ACMs).

Described as a remote-controlled bankcounter, the machine offers a variety of functions which ATMs do not have, suchas new account opening, foreign remittanceand home mortgage applications, accordingto Kaneda. ACMs have a videophone, socustomers can see, hear and communicatewith bank staff. In addition, the machine is

equipped with a scanner to scan identifica-tion documents of customers and a fax tosend through applications.

The volume of ACM transactions is com-parable to about 1,000 tellers at the counterand about one in four ACM users transactoutside office hours. Levels of use have beenfound to increase outside of office hours,increasing the profile of the UFJ24 project.

“ATMs and ACMs cover most of the cleri-cal work so tellers can concentrate on sales

activities,” said Kaneda. “We are currentlyin the process of a trial of Super ConvenientBranch by installing ACMs in ATM cornersof specific branches.”

Revitalisation planMUFJ published the first update of its Revi-talisation Plan as a merged entity in Februarythis year. The plan, which stated that retailbanking is a fundamental driver for the bank(see graph above), said that the group’s retailbusiness places its “highest priority” on thetwo aims of enhancing customer satisfactionand maximising profit.

The plan said that MUFJ intends to builda world-class retail brand through leveragingthe highly complementary nature of theformer Bank of Tokyo-Mitsubishi and UFJgroups.

■ CUSTOMER SURVEY

Customers’ dissatisfaction with banks

Source: MUFJ

Retail:

over 35%

Corporate (domestic):

c.40%-45%

Corporate

(overseas):

c.10%

Treasury:

c.5%

Trust assets:

2%-4%

■ GROWTH PLANS

MUFJ – profit by business segment, 2009

Source: MUFJ

CUSTOMER SERVICE: MUFJ 13



Banking on service

Before Japan’s Mitsubishi UFJ Financial Group can compete effectively with the likes of Citibank and HSBCon the international stage and become a top five global player, it is looking to cement its domestic retail banking business through a technology-led customer service proposition. Titien Ahmad reports

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CASE STUDY: BCB14



BCB goes on the deposit chase

Bumiputra Commerce Bank (BCB) is Malaysia’s second-largest financial services group after Maybank.Looking to cut the latter’s lead, BCB has rolled out a number of marketing initiatives this year and islooking to expand its product range, turn branches into sales centres and focus more on segmentation

Bumiputra Commerce Bank (BCB) isbattling it out in a domestic marketdominated by Maybank, the coun-try’s largest financial services group.

BCB, formed via various mergers and acqui-

sitions over the past decade (most recentlythe merger with Commerce InternationalMerchant Bank [CIMB] in 2005), has rolledout numerous marketing and product ini-tiatives so far in 2006 as it looks to cut intoMaybank’s lead.

Raising the savings rates on key productshas been an important strategy this year. Atthe end of May, the bank announced a rangeof increases on its fixed deposits for all ten-ures over 12 months, for instance. The bank’snew rates range from 3.7 percent per annum for 13 months, up to 4.8 percent per annum for a five-year tenure. Peter England, BCBhead of retail banking, said the adjustmentof rates was in line with the bank’s strategy tocontinuously review its product range. “Weare constantly monitoring the changes in themarkets and felt there was an opportunity toraise our longer term rates significantly.”

For retail customers, England noted that,at 3.3 percent, the bank also has the bestone-month rate in the market. “Now withthe new two-year promotional rate, custom-ers can enjoy the highest rate in the marketfor longer term deposits.”

Dream DepositsAll retail fixed deposits also qualify for BCB’shigh-profile Dream Deposits campaign,through which customers stand to win aweekly prize of a 42in Panasonic plasma tel-evision and be entered into the draw for thegrand prize of a Mercedes E200K.

Another recent launch was the No Tierscampaign. Previously, depositors were dif-ferentiated by their nationality and depositamounts. Tier 2 interest rates, for instance,were applicable to Malaysians who haddeposits of over MYR1 million ($27,231)and to foreigners for any amount of fixeddeposit. According to England, there are nolonger limits on the amounts that an indi-vidual customer can place in fixed depositsto qualify for Tier 1 rates.

This move, added England, is targeted at

encouraging more high net worth customersto deposit with the bank. “We have enhancedthis campaign further where we now include12-month fixed deposits in this special pro-motion. This means we will pay Tier 1 rates

up to 3.7 percent for any amounts placed inindividual names in BCB for 12 months orless.”

Marketing campaigns offering free giftswhen new accounts are opened have been inplace to reward customers depositing moneyat the bank. The most recent programmewas the Dream Deposits campaign designedto increase the amount deposited with BCBamong current customers.

The Dream Deposit campaign follows therecently concluded BCB Cash Attack con-test which ran for six months from Septem-ber 2005. Three winners of MYR500 weredeclared each week and the winners werethen eligible to win MYR30,000 providedthey maintain a specific account balance dur-ing the six months of the contest period.

Customers had to submit an entry formwith the original deposit or ATM slip and were required to answer two questions aboutBCB. They then had to submit their most cre-ative depiction of the phrase ‘Show me themoney’.

The bank’s latest branding initiative,which ran between 4 and 16 May, involved itputting its brand to the biggest Asian debat-

ing championship. The All Asians Inter-Varsity Debating Championship boastedover 400 participants from 45 higher learn-ing institutes from countries such as China,India, Thailand, Indonesia, the Philippines,South Korea and Japan.

Increasing share of walletAs the second-largest bank in Malaysiain terms of assets, BCB has over 4 millioncustomers and the challenge for the bank isincreasing its wallet share of its existing cus-tomers. England has said the bank is morefocused on building relationships with itsexisting customers than getting large num-bers of people to make up its customer base.

BCB opens about 40,000 new sav-ings accounts which have an average of MYR1,000 per account every month. In

terms of current accounts, it opens about1,000 new accounts which have an averagebalance of MYR10,000 monthly. The bankhas reportedly spent MYR3 million on pro-motions, schemes and advertising to increase

its retail deposits.The goal for BCB is to increase the bank’s

market share in retail banking to 10.0 per-cent by the end of 2006, from 6.5 to 7.0 per-cent currently. Retail deposits are targeted toincrease to MYR15 billion from the MYR13billion that makes up 20 percent of its totaldeposit base. “We are targeting to grow ourretail deposits by over 15 percent this year.BCB has 6 percent share of the retail depositmarket,” said England.

Branch networkOther elements of its business the bank hasbeen looking to improve include simplifyingthe account opening process and extend-ing branch opening hours, part of a rangeof changes focused largely on the bank’sbranch network. The bank has extended theopening hours of its branches, for instance,to 4.45pm instead of 4pm, and service kioskslocated at shopping complexes now operateseven days a week from 11am to 7pm. BCBcurrently has 233 branches throughout thecountry, 37 service kiosks, 892 ATMs, 148cash deposit machines, 220 cheque depositterminals (CDTs) and 38 CDTs which have

a scanner.According to its 2005 annual report, BCB

achieved profit before tax of MYR548.8million compared with MYR304.4 millionin 2004, an increase of 80.3 percent. Thebank’s profit before tax rose 219 percent toclose at MYR572.7 million, compared withMYR179.5 million in 2004.

Writing in the report, Tan Sri Dato’ SeriHaidar Mohamed Nor, the group’s chair-man, stressed the need to improve the cross-selling capability of the group. He said that,going forward, one of BCB’s priorities isto continue to focus on retail banking byenhancing its risk management systems, cre-ating segmented business models for targetcustomer segments, growing its credit cardportfolio and converting branches to salesand service units.




INDEX

AFRICA AND THE MIDDLE EAST

Absa 6

ASIA-PACIFIC

Bangkok Bank 12

Bumiputra Commerce Bank 14

Maybank 14

Mitsubishi UFJ 12, 13

United Overseas Bank 3

Westpac 4

EUROPE

ABN AMRO 12

AIB 7

Aviva 11

Axa 11

Banesto 9

Bank of Ireland 7

Bank Zachodni WBK 7

Barclays 4, 12

BBVA 3, 15

Caixa Geral de Depósitos 15Česká sporitelna 15

Crédit Agricole 15

Experian-Scorex 1-2

Fortis 15

F-Secure 4

Groupe Caisse d’Epargne 12

HBOS 5, 12

HSBC 1-2, 3, 11, 12

Lloyds TSB 5, 12, 15

McCann 9

Nectar 5

NPG 9

OKO 15

OTP 15

PKO BP 15

Rabobank 15

Raiffeisen 15

Reward 5

Santander 9

Sberbank 15

smile 3

VNU 10

NORTH AMERICA AND THE C ARIBBEAN

American Express 5

Bank of America 3, 5, 10

Capital One 5

CGI/AMS 2

Citigroup 1, 8, 10, 11

eBay 3

Fair Isaac 1-2

First Data 5

GE Consumer Finance 3

JPMorgan Chase 4, 10Merrill Lynch 11

MetLife 4

Morgan Stanley 5

Nielsen Ventures 10

Scotiabank 12

Smith Barney 3

Wachovia 4, 10

DID YOU KNOW?

Your subscription to this news-letter entitles you to access itsfive-year online archive. Go towww.vrlpublishing.com

Europe’s trusted financial brandsBRANDING

NEWS 15



Generally speaking, European consumersvalue nationality, mutuality and/or state par-ticipation, and market size when judging thetrustworthiness of banks, according to thesixth annual survey of Europe’s most trust-ed brands by the magazine Reader’s Digest .National institutions such as Crédit Agricole,PKO, Rabobank, Raiffeisen and Sberbank topindividual country banking tables, as do insur-ers such as Axa and Allianz (see table below).

The biggest surprise, perhaps, is theUK: Lloyds TSB, the UK’s fifth-largest

retail player and a bank long believed tobe a potential takeover target as it strug-gles to compete with larger rivals, such asHSBC, Barclays and HBOS, was voted themost trusted bank brand in the UK. Othersimilar surveys have either put HSBC (see

BMI 179, and BMI 181) or Nationwide,the UK’s largest building society, ahead (see

BMI 189).This is the sixth annual survey by Read-

er’s Digest , which describes itself as themagazine with the largest circulation in theworld. Research took place in 14 Europeancountries, including countries in Centraland Eastern Europe, between September

and October 2005, and covered 20 differentindustries, including cars, cosmetics, kitchenappliances and mobile phones, as well asbanks, insurance companies and credit cardassociations.

A total of 25,434 questionnaires was ana-lysed and 317,339 votes were cast. Overall,112,129 different brand names (or variationson a brand name) were mentioned. Respond-ents were drawn from the publication’s cus-tomer database of 4.5 million homes.

Brand trust and choiceThe survey’s primary objective was to findout which brands Europeans trust the mostand to investigate what trust means in termsof brand choice. Brands were rated basedupon quality, value, image and understand-ing of customer needs, as well as the impor-tance of trust when making a purchase. The June 2006 editions of Reader’s Digest maga-zine across Europe carried a multi-page sec-tion summarising the results of the survey,meaning the winning brands received goodeditorial coverage.

Reader’s Digest said that achieving ‘trustedbrand’ status is especially valuable to brandsbecause it “reflects the opinions and percep-tions of the general public. It is not a measureof buying habits, advertising investment orpeer group judgement. Without any promptwhatsoever, consumers in 14 different coun-tries nominate the brands that they person-ally trust the most across a range of differentproduct/service categories.”

In terms of credit cards, Visa has againdominated the category. Across Europe,Visa, which gained an average of 44 percentof the votes, is considered by consumers to be

the most trusted credit card brand in 13 outof 14 countries.

The credit card category has been includedin the past four surveys and has been won byVisa each time.

In Europe, there are over 302 million Visadebit, credit and commercial cards. In the 12months ended December 2005, those cardswere used to make purchases and cash with-drawals to the value of over €1.13 trillion($1.43 trillion).

Finland’s most trusted bank, Helsinki-based Osuuspankki, officially rebranded atthe start of June – its full name, OKO Osuus-pankkien Keskuspankki Oyj, has been con-densed to OKO Bank. The group comprises236 independent member co-operative banksand its statutory central institution, OP BankGroup Central Cooperative.

■ BRAND STRENGTH

Winning financial brands

Country Bank Insurer Credit card

Austria Raiffeisen-

bank

Uniqa Visa

Belgium Fortis Axa Visa

Czech

Republic

Česká

sporitelna

Česká

pojišťovna

Visa

Finland OKO Bank Tapiola Visa

France Crédit Agricole Axa Visa

Germany Sparkassen Allianz Visa

Hungary OTP Allianz

Hungaria

MasterCard

Netherlands Rabobank Interpolis Visa

Poland PKO BP PZU Visa

Portugal Caixa

Geral de

Depósitos

Fidelidade Visa

Russia Sberbank Ross-

gosstrakh

Visa

Spain BBVA Mapfre Visa

Switzer land Raif feisen Mobiliar

Schweiz

Visa

UK Lloyds TSB Norwich

Union

Visa

Source: Reader’s Digest Trusted Brands Survey 2006



Bank Marketing International

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