Back to Banking - Capturing Retail Deposits.

NEW YORK -- Reportlinker.com announces that a new market research report related to the Financial services industry is available in its catalogue.

Back to Banking - Capturing retail deposits

http://www.reportlinker.com/p099606/Back-to-Banking---Capturing-retail-deposits.html

Introduction

With banks and building societies in the UK scrambling to strengthen their balance sheets, Datamonitor assesses the attractiveness of the various funding options, and concludes that retail deposits represent the best source of new capital. Five key customer segments are particularly ripe for targeting, and Datamonitor's megatrends framework is used to devise strategies for these.

Scope

*Assesses the attractiveness of the various sources of capital and identifies retail deposits as the most attractive.

*Prioritizes five key customer segments which are particularly attractive based on factors like size of savings and long-term revenue potential.

*Uses Datamonitor's megatrends framework to profile these customer segments and suggest strategies for targeting them.

*Includes global examples of intelligent services and marketing campaigns focussing on these segments.

Highlights

In October this year, key banks and building societies in the UK agreed to strengthen their balance sheets, as part of the government-led effort to ensure the stability of the financial system. Among the funding alternatives, Datamonitor's analysis shows that accessing additional funds from depositors stands out as the most attractive option.

Datamonitor has identified five key lucrative segments for banks to target. These segments are home savers, independent professional services, milestoners (people whose lives and behaviors have been affected by trigger events like marriage or children), UK resident expats and accumulators (50 to 59 year olds saving for retirement).

Reasons to Purchase

*Gain insights into the current deposit and mortgage positions of key UK banks and building societies.

*Understand the nature of five key customer segments that are ripe for targeting with deposit products.

*See how other financial services companies are intelligently marketing to these segments.

Overview 1

Catalyst 1

Summary 1

Executive Summary 2

Retail deposits stand out as the most attractive funding option for banks 2

Datamonitor has identified 10 megatrends in consumer behavior 2

Each customer segment has different characteristics and service requirements 2

Home savers 2

Independent professional services 2

Milestoners 3

UK resident expats 3

Accumulators 3

Table of Contents 4

Table of figures 5

Table of tables 6

MARKET CONTEXT 7

Raising capital in the normal way is no longer attractive; it is time to return to the old tradition of deposit taking 7

Many UK banks find themselves generally overweight in mortgages and underweight in deposits 7

There are many unattractive options for new sources of funding 9

Retail deposits stands out as easily the most attractive funding option 12

Lucrative customers can be targeted by using the megatrends framework 12

Key lucrative segments exist 12

The financial services megatrends framework can be used to target these customer segments 12

ATTRACTING RETAIL DEPOSITS: LOOKING BEYOND PRICE 14

Takeouts and implications for attracting retail deposits 14

In today's conditions, competition between financial services companies is fierce 14

Financial service providers must look past price to compete successfully in today's market 14

Consumer empowerment means banks must get some 'basics' right to attract and retain customers 14

ING Direct hemorrhaged deposits after launching on price and then bucking the interest rate trend 15

Britons with deposits in Icesave narrowly avoided a financial meltdown 16

THE HOME SAVERS 18

Takeouts and implications for targeting home savers 18

Getting onto and moving up the property ladder is becoming difficult 18

The lending practices of the banks have changed radically 18

The falling market is also deterring purchasers of property 19

The megatrends framework for home savers 20

Comfort and Connectivity: German banks adopt an innovative approach for home savers 21

Lifestage complexity: recognize that many people will not be moving onto or up the property ladder 24

THE INDEPENDENT PROFESSIONAL SERVICES 26

Takeouts and implications for targeting independent professionals 26

The professional services is an attractive customer segment for banks 26

Professionals working in their own practices face a dual challenge 26

The independent professional services customer segment is large in number and has a good earnings profile but is under personal and professional stress 26

The megatrends framework for independent professionals 27

Convenience: professionals are seeking products and services that deliver convenience 27

Connectivity: stressing the importance of community and business support to independent professionals 29

Wellbeing: independent professionals are looking for products that enhance the balance in their lives 31

THE MILESTONERS: TRIGGER EVENTS IN PEOPLE'S LIVES 35

Takeouts and implications for targeting 'milestoners' 35

There are number of 'trigger events' in people's lives that banks can benefit from 35

Trigger events are moments in people's lives that can induce significant changes in savings behavior 35

There is a wide range of trigger events in the UK each year and consumers typically have a number of 'bankable' trigger events in their own lives 35

Banks can use their existing CRM systems to build personal relationships with their clients within a technological age 36

The megatrends framework for trigger events 37

Individualism: milestones in people's lives make them stand apart from the crowd 38

Connectivity: milestones increase people's community focus 39

Comfort: parents and grandparents want to ensure a secure future for children 41

THE UK RESIDENT EXPATS 44

Takeouts and implications for targeting resident expats 44

The UK has seen large-scale inflows of people 44

Settled foreigners represent an attractive market segment 44

The megatrends framework for expats 47

Convenience: HSBC is one UK bank targeting the expat market 47

Connectivity: HSBC helps expats connect into relevant resources 48

Lifestage complexity: Societe Generale recognizes the diversity of the expat segment 50

THE ACCUMULATORS: THE 50-59 YEARS SUPERSAVERS 52

Takeouts and implications for targeting 'accumulators' 52

The accumulators are a diverse group of people, united by a strong resource base from which they have the ability to increase their savings 52

Accumulators are aged between 50 and 59 years, but have lifestage complexity 52

The megatrends framework for accumulators 54

Individualism: accumulators want their individual needs recognized with a personal service 54

Harris Private Bank promotes its personalized financial planning services 54

UBS recognizes the lifestage complexity of accumulators and provides reassurance that their diverse needs are being catered for 55

Convenience: accumulators want flexibility and efficient service delivery 57

Convenience allows customers access to their savings but rewards them for letting it stay put 57

The importance of convenience in researching the best product or service at the best price 58

Convenience is an important aspect of efficient service delivery 59

Lifestage complexity: old patterns no longer hold and the 40-54 years group may cover a range of lifestages 60

APPENDIX 62

Definitions 62

Overview of Datamonitor's savings and investment model 62

Flows methodology 62

Market share methodology 62

Savings and investments forecast justification 62

The financial services megatrends framework 63

Datamonitor has identified 10 megatrends in consumer behavior 63

Megatrends are a tool for capturing the drivers of consumer behavior 63

A megatrend framework is a vital tool for analyzing and structuring consumer attitudes and behaviors 63

A trend framework is used for generating and selecting ideas 63

A megatrend framework is vital for financial services 64

Customer retention as well as customer acquisition must be considered 64

There are inherent obstacles in financial services that limit innovation in customer targeting 64

Greater customer understanding can help overcome the obstacles found with targeting and communicating to customers 64

The megatrend framework enhances an analysis of the UK deposit market 65

There are 10 megatrends that impact on the actions and attitudes of financial services customers 65

The six behavior trends identify the benefits that consumers wish to gain from a product or service 66

The four complexities are areas within which traditional assumptions or measures of behavior no longer apply 67

Methodology 69

Bibliography 69

Further reading 70

Ask the analyst 70

Datamonitor consulting 70

Disclaimer 70

List of Tables

Table 1: The mortgage: deposit ratio is a useful indicator of financial health 8

Table 2: Foreign expats living in Britain, by investable assets 46

List of Figures

Figure 1: Key sources and characteristics of each type of retail bank funding options 10

Figure 2: Interbank lending continues to come at a high cost 11

Figure 3: ING Direct: When savings don't feel so good 16

Figure 4: The number of home loans being granted in the UK has dropped dramatically 18

Figure 5: UK house prices are sharply down 20

Figure 6: The workings of the Bauspar system 22

Figure 7: Commerzbank stresses flexibility in its offering 23

Figure 8: Showing how money accumulates to build a house 24

Figure 9: Lloyds TSB recognizes that not everyone will be looking to buy 25

Figure 10: BNZ tailors home loan and business packages to suit client needs 28

Figure 11: BNZ stresses the importance of community connectivity to those working in their own business 30

Figure 12: FNB reaches out to professionals running their own businesses by providing business support tools 31

Figure 13: HSBC adds value to its services for professionals by selling professional indemnity insurance 33

Figure 14: Westpac recognizes the difficulties those running their own businesses may face when it comes to meeting their superannuation payments 34

Figure 15: There are at least 1.5 million trigger events in the UK each year 36

Figure 16: Back to banking: building personal relationships within a technological age 37

Figure 17: BNZ uses free texts to connect with customers based on their individually-defined criteria 39

Figure 18: BNP Paribas connects with people when they are beginning life together... and when it comes to an end 41

Figure 19: ABSA connects child, family and community with its FuturePlan account 42

Figure 20: OCBC combines a trust savings account with insurance features in its 'School Plan' 43

Figure 21: India and Ireland are the most common expats resident in the UK 45

Figure 22: Passport is a banking product/service from HSBC specifically aimed at expats 48

Figure 23: HSBC offers useful resources and information for expats 50

Figure 24: Societe Generale shows great awareness of the lifestage complexity megatrend 51

Figure 25: The accumulators are a significant part of the population in the UK 53

Figure 26: Harris promotes a personalized pre-retirement service 55

Figure 27: UBS offers its clients a pre-retirement service packed with reassurance 56

Figure 28: Barclays Premier offers 'nest-egg' savings to reward customers for keeping their money in the bank 57

Figure 29: ING Direct offers comfort and convenience 60

Figure 30: BNZ addresses lifestage complexity and connectivity with its 'TotalMoney' program 61

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