Accenture, UniCredit, Efma Survey Shows Banks are Adopting Retail Industry Strategies
In Order to Grow
Point-of-sale product recommendations, customer segmentation, analytics perceived as having the highest potential to increase retail banks’ revenue
LONDON; July 19, 2011 – Significant numbers of major European banks are adopting techniques used by successful retailers to increase revenues and cross-sell products, according to a survey of 78 senior marketing executives at leading European banks.
The survey commissioned by Accenture and UniCredit and conducted by Efma, revealed substantive progress among banks in implementing proven retail strategies. Overall, 41 percent of respondents said that they had implemented or will implement within one year at least one program similar to retailers’ initiatives. And, a significant number of respondents said their banks had “already begun” initiatives similar to those of:
· Best Buy (56 percent);
· Giorgio Armani (47 percent);
· Prenatal (38 percent).
Best Buy had implemented a customer segmentation initiative which identified current and future customer profitability and that segmented customers for appropriate marketing and offers. Giorgio Armani’s initiative includes in-store and online branding programs targeting Y-generation customers with popular icons, social networking and entertainment. The Italian-based maternity retailer, Prenatal, provides free in-store and online customer education services.
Respondents to the survey were asked to evaluate 16 successful customer initiatives by companies outside the banking industry for their applicability and potential to increase bank revenues and cross-selling. The top-rated initiatives were:
· Amazon.com’s point-of-sale product recommendations, which present packages frequently “bought together” based on storewide buying patterns and other correlations;
· Best Buy’s customer segmentation strategy;
· Apple’s iTunes “Genius” tool, which recommends new content based on individual users’ purchasing histories and entertainment libraries, enabled by analytics capability.
“We expect a shakeout in the banking industry, driven by advanced marketing and analytics capabilities,” said Piercarlo Gera, managing director of Accenture Banking Distribution and Marketing Services. “New service models, with increased focus on digital channels, including social media, are already under development or being implemented to engage with today’s less loyal customers. Those banks that learn quickly and selectively from the successes of top retailers – particularly in areas such as customer analytics and behavioral segmentation, self-service and customer-centricity – have a clear opportunity to outperform their competitors.”
According to the survey, four out of five respondents (78 percent) believe the customer analytics and behavioral segmentation techniques employed successfully by retailers will be vital to the banks’ future competitiveness.
Respondents also gave high ratings to Prenatal, and BMW received high marks for its “build your BMW” online product self-configuration tool.
“Despite the differences between banks and retailers – in terms of their products and frequency of customer interaction – banks can gain selective inspiration from traditional retail practices,” said Alessandro Maria Decio, Head of UniCredit’s Family and SME Division. “Marketing, customer segmentation and the ability to continuously monitor customer needs are key areas where many leading retailers have distinguished themselves. Leveraging these successes for their own business can help banks differentiate their products and services for consumers.”
Many of the retail strategies considered to have the highest intrinsic potential for banks are also considered among the hardest to implement, according to the survey. The Apple and NH Hotel customer initiatives -- rated among the top five for their potential benefits and applicability to banks -- were also rated among the top five for having the highest investment and organizational impact.
“The world’s top retailers are laser-focused on getting into the minds of their customers and translating their insights into ways to efficiently deliver what their customers want – and how they want it,” said Patrick Desmares, secretary general of Efma. “It took retailers many years to build these best practices. Not all of them will make sense for European banks but, with an informed selection process and appropriate investment, many of these innovations can help banks win the race to rebuild customer loyalty, growth and profitability.”
Accenture and UniCredit commissioned the Efma to interview 78 senior marketing and retail executives at 60 leading banks across Europe, including Austria, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, France, Germany, Greece, Ireland, Italy, Kazakhstan, Latvia, Norway, Poland, Portugal, Romania, Russian Federation, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey, Ukraine and the United Kingdom. Respondents represented almost all of the top European institutions. Interviews were conducted in writing between January and March 2011. Respondents were provided details of 16 innovative customer initiatives from outside of the banking industry; innovations were pre-selected from a total of 70 customer innovations.
Accenture is a global management consulting, technology services and outsourcing company, with more than 223,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.6 billion for the fiscal year ended Aug. 31, 2010. Its home page is www.accenture.com.
UniCredit is a major international financial institution with strong roots in 22 European countries and an overall international network present in approximately 50 markets, over 9,600 branches and 162,000 employees as of 31 December 2010. In the CEE region, UniCredit operates the largest international banking network with nearly 3,900 branches. The Group operates in the following countries: Austria, Azerbaijan, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Estonia, Germany, Hungary, Italy, Latvia, Lithuania, Kazakhstan, Kyrgyzstan, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey and Ukraine.
Efma is a not-for-profit association specializing in retail financial marketing, formed in 1971 by bankers and insurers. Today, over 3,000 brands in 130 countries are Efma members and these include over 80 percent of Europe’s largest retail financial institutions. Efma provides a professional forum that enables members to share experiences; promote best practices; and collaborate through alliances and partnerships. This is complemented by regular events, councils, online communities, detailed studies, a journal and a website with extensive information and news. For more information: www.efma.com.
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