Cross-Selling Financial Services in Australia

Introduction

This report analyzes cross-selling in the Australian financial services market. The report draws upon a survey of 1,981 Australian consumers aged 18 and above in July 2011. Cross-selling is set to become yet more important as banks are challenged by increasing competitive pressure. However, new technological developments provide both opportunities and challenges.

Features and benefits

• Looks at the key drivers of cross-selling and its state across different product categories.
• Analyzes which factors are most important to customers when bundling or acquiring additional products.
• Provides analysis of best practice for financial services providers.
• Analyzes key action points for providers to increase cross-selling.
• Provides a framework for understanding strengths and weaknesses across products to be used for cross-selling.

Highlights

The institution with which consumers hold their main transaction account almost invariably determines which one they regard as their main financial institution (MFI). Indeed, 93% of major bank MFI customers have their main transaction account with that MFI.
Credit cards offer some distinctive prospects for cross-selling. For starters, the credit card is a common product that most often is held with a customer's MFI, similar to savings accounts. Indeed, 54% of major bank MFI customers have a main credit card with their MFI.
In order to harness the full power of the online channel to increase cross-selling, financial institutions will first have to integrate their products on their online platform. Accessing the online banking platform should provide an easy overview in one place of diverse products.

Your key questions answered

• How can a bank increase cross-selling metrics to its customers?
• Which metrics are most important to track to maintain longterm high average product holding metrics?
• What will the future hold in terms of developments in the cross-selling space?
• How should banks adapt to the changing market ladnscape when it comes to cross-selling?
• How do average product holdings differ between the major banks?

Table Of Contents

Executive Summary
Product types and cross-selling
Cross-selling across product types will become even more important
The transaction account remains the key product for main financial institution affiliation
One in six major bank MFI customers have all three core products with their MFI
Savings accounts will become more important tools for cross-selling
Credit cards offers opportunities for both incoming and outgoing cross-selling
Mortgage packages allow for extensive cross-selling
Competitor focus
ANZ has successfully cross-sold credit cards to its MFI customers
Commonwealth Bank has the largest pool of customers to cross-sell to
National Australia Bank needs to cross-sell mortgages to its savings account customers
Westpac needs to increase credit card cross-selling
Cross-selling: insights and recommendations
The online channel offers opportunities and challenges for cross-selling
Online platforms should offer an overview of all products held and easy access to cross-selling
More financially savvy customers will demand rewards for bundling
Bundled products need to be tracked for usage
More targeted cross-selling can yield follow-on effects
Targeted cross-selling is less likely to cause consumer backlash
New product types will emerge due to convergence and will affect cross-selling targeting

OVERVIEW
Catalyst
Summary

PRODUCT TYPES AND CROSS-SELLING
Cross-selling across product types will become even more important
The average number of products held with banks illustrates the importance of cross-selling
Opportunities vary across product types
The transaction account remains the key product for MFI affiliation
Savings accounts, credit cards, and mortgages pose distinct challenges for cross-selling
A third of bank MFI customers have all three core product types
One in six bank MFI customers have all three core products with their MFI
Savings accounts will become more important tools for cross-selling
Credit cards offer opportunities for both incoming and outgoing cross-selling
Mortgage packages allow for extensive cross-selling

COMPETITOR FOCUS
The major banks have different areas of strength in cross-selling
ANZ has successfully cross-sold credit cards to its MFI customers
Commonwealth Bank has the largest pool of customers to cross-sell to
NAB needs to cross-sell mortgages to its savings account customers
Westpac needs to increase credit card cross-selling

CROSS-SELLING: INSIGHTS AND RECOMMENDATIONS
The online channel offers opportunities and challenges for cross-selling
Online platforms should offer an overview of all products held and easy access to cross-selling
More financially savvy customers will demand rewards for bundling
Bundled products need to be tracked for usage
Cross-selling should be made increasingly targeted
More targeted cross-selling can yield follow-on effects
Cross-selling is effective at specific customer life events
Targeted cross-selling is less likely to cause consumer backlash
The major banks cross-sell lower priced products through subsidiaries
New product types will emerge due to convergence and will affect cross-selling targeting

APPENDIX
Data tables
Methodology
Further reading
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