Retail Banking Insights & Strategy

The latest research and news across retail banking and payments

Cross-sell in retail banking – who is world number 1?

In late 2013 RFi, global experts in banking consumer intelligence (and I should also note at this point, my employer) surveyed 24,000 consumers across 12 markets to identify which retail bank is the global leader in cross-sell.

Now before I dive into the detail there are a few terms we like to throw around that I should clarify :

  1. Main bank is the primary bank relationship for a customer as defined by the customer.
  2. Unique product is a distinct product type (e.g. credit card, mortgage, transaction account)
  3. Cross-sell is the number of unique products a customer holds with a particular institution

To measure cross-sell performance we looked at the number of unique products held by a main bank customer.

So who is the global leader?

We have presented the results to senior executives from retail banking around the globe and when asked for their prediction, Wells Fargo is the clear favorite. However Wells Fargo only managed 5th in the USA on our measure of unique products.

The RFi global leader is Standard Chartered Singapore with a world leading 4.6 unique products per customer.

But when we look behind the data there are a few things to note:

  • Stan Chart has only 5%  of main bank relationships in Singapore. DBS/POSB lead that market with a whopping 62% main bank share
  • Stan Chart convert a lowly 14% of their customer relationships into main-bank status but once converted are the most effective bank in the world at growing that relationship with additional unique products.
  • Wells Fargo has 3.1 products per main bank customer, which is the market average for the USA. Bank of America takes honours in the USA with 3.4 products per customer. 

The differing market dynamics also need to be accounted for….

  • Geography – having a physical local presence is important in choosing a main-bank. The size of Singapore means you can be closer to a greater percentage of the population with fewer branches, particularly when compared to the USA
  • Population affluence – Singapore has the highest concentration of millionaires in the globe. Richer people use and need more banking products.
  • Competition – there are over 6,000 banks competing in the USA. Singapore has less than 200.

To receive the full report either complete the form below or drop me an email


Mobile Payments – its not about payments

RFi recently asked 2000 UK consumers a few questions in regards to mobile payments – we only touched the surface, but this is what we found.

Smart phone penetration

57% of people surveyed own a smart phone.

Which phone do they own?

30% Apple iPhone
20% HTC
14% Nokia
13% Blackberry
11% Samsung

NFC enabled mobile phone penetration

Currently 22% of smart phone owners surveyed have a phone with NFC – the majority of these owning the Blackberry Bold 9900.

Who can use their phone for NFC mobile payments now?

0.9% of survey respondants can use their phone for payments.

Now the sample size gets small here, but of that 0.9%, half of them either never have or rarely use their phone to make in-store purchases. We define rarely as less than five times total.

So why, if this group can use their phone for NFC-based mobile payments, aren’t they?

We asked smart phone owners the appeal of having various mobile money features on their phone.

The most popular was the ability to receive coupons or offers by tapping your phone against in-store promotional stands and posters with 52% of smart phone owners rating it favourably.

The least popular was the ability to pay for goods in-store via contactless payment terminals with 39% responding favourably.

Mobile Payments Feature Appeal

Click on this image to see how consumers rate the appeal of various mobile money features


These statistics shouldn’t be ground-breaking for those developing / delivering a mobile payments service.

BUT it does confirm the assumption that for NFC-enabled mobile payments to succeed payments alone will not drive adoption and usage.

A careful blend of features including both payments and commerce services (i.e. offers & coupons) should begin to form the foundation of a more appealing consumer proposition.

Equally, it is as important to understand this does NOT mean payments role is any less important than coupons or offers.

Payments will play a critical role in delivering the value of a mobile money proposition to consumers, it’s just that consumers wont recognise or attribute value to it.

If you are interested to know more about the research RFi has planned for mobile payments in 2012 please email me

NOTE: These statistics were taken from a consumer survey focused primarily on mortgages and the sample only includes those who own or intend to take out a mortgage.

Mobile Payments – a customer service challenge

Last week I wrote about the future of money and payments event I attended.

Senior representatives from McDonalds, O2 & Mastercard sat on a panel to discuss NFC-based mobile payments. Nathan Guerra, Innovation Director at AMV BBDO chaired the event and kicked the night off with a key question,

“If I have my Barclays credit card and my Lloyds debit card in a O2 mobile wallet sitting on my Blackberry handset and I lose my phone….Who do I call to cancel my cards – bank, mobile network operator (MNO) or handset manufacturer?”

This is a big question being considered by many organisations looking to make a play in this space. A simple question loaded with complexity.

Now who the customer SHOULD call depends on which company owns the secure element – the NFC chip that stores the personal financial data.

In response to the question, Claire Maslen, senior market development manager for O2 Money pointed out, a customer SHOULD call their MNO. O2 can deactivate the SIM card remotely via an over the air system, putting a stop on all cards and funds in the digital wallet. Removing the ability for a stranger to get access to the customer’s money via the lost phone.

Convenient for the consumer? Yes, because they only have to call one company to put a stop on all their digital cards – instead of each card issuer individually, as happens when one loses their leather wallet.

But this single phone call is not so easy to place when you’ve lost your mobile phone.

Orange and Barclaycard, with their Quick Tap mobile payments offer, direct consumers to call Orange. When customers happen to call Barclaycard the customer service agent gives a warm hand off back to Orange staff. A seamless solution? Perhaps…

NOW, consider the context of the consumer. They have just lost their smart phone, which for many is a metaphorical extension of their body. Within that all their contacts, any personal information and now, their money and cards.

Further imagine, they don’t have time to deal with this now, because they are on their way to an important appointment and need to catch the tube. But wait a second, consider now that the O2 wallet, or certainly the smart phone, could also store their Oyster travel card. The consumer is stranded.

Stress levels are increasing and a feeling of helplessness comes over them.

Is it now a simple case of calling O2?

Even if you can put a stop on your card. What now? You need a new phone, you need access to money, you need access to public transport. Who do you call to arrange all this? What steps do you need to take? And how long are you going to wait?

We all know, one horror story will spread faster and further than a positive one. It can destroy the trust consumers have with the brand in question. A story such as this will reinforce consumer concerns, delaying adoption of mobile payments.

We can accept there is going to be collateral damage as a result from loosing your phone or wallet, regardless of being digital or physical. BUT the actions a mobile money provider takes from this point are critical to their success and that of the industry.

A customer is going to expect a hassle and an inconvenience in this scenario. But what a customer considers tolerable to resolve the issue is critical to understand when designing the customer service model.

Organisations need to understand consumers likely response and subsequent behaviour. How consumers feel about dealing with the various players in the ecosystem. And what’s an acceptable process and wait time to have their mobile wallet fully functioning again?

This customer insight needs to drive the design and implementation of the customer service model.

To add to this, the complexity of designing a customer service model is multiplied by the number of organisations participating in the wallet – as systems need to be integrated, process flows mapped and staff educated.

ALL this and we haven’t even begun to talk about how to process a payment, how to integrate offers or the technology upgrades required to deliver a real-time platform.

If you are interested to understand more about the work RFi is doing in this space please hit the contact tab at the top of the page or drop me an email

What’s next for money and payments? A perspective from O2, Mastercard & McDonalds?

Last night I attended a mobile payments event that asked the question, What’s next for money and payments? Focusing on NFC, proximity payments.

Not the first time this question has been asked, sure. But this time the question was directed to three leaders from the UK payments industry.

  • Claire Maslen, Senior market development manager, O2 Money, Telefonica UK

  • Colin Swain, Head of digital business development, Mastercard

  • Mark Fabes, IT Director, McDonalds UK

    What ensued was a vibrant discussion from both the panel and the audience. Covering topics including standardisation, interoperability, convergence, mobile commerce, security, consumer adoption, customer service issues and technology challenges.

    The key outtakes for me were:

  • O2 Money and O2 Media are working together to develop the O2 mobile wallet.

  • Mastercard is not developing a wallet.

  • McDonalds has 8000 contactless enabled terminals in the UK, approx. 10% of all UK contactless terminals.

  • 2-3% of all card payments at McDonalds are contactless.

  • McDonalds reached 1 million contactless transactions within 6 months of installing the terminals.

  • On average a UK person will visit McDonalds 15 times in a year (not really relevant to payments, but an interesting stat regardless).

  • McDonalds is not clear on the value they receive in participating in mobile offers and coupons – being nether opposed or for the concept.

  • 50% of O2’s 6 million customers have opted in to their ‘daily offers’ and receieve 1 offer per day.

  • Trials conducted by both Mastercard and O2 show that consumers want a mobile wallet.

  • O2 has 30,000+ BlackBerry Bold’s (an NFC enabled phone) in the market.

  • O2 and Blackberry’s call centre staff currently do not know anything about mobile payments – as pointed out by an audeince member.

    My favourite quote of the evening came from Colin Swain, who said “Everyone agrees that payments is a hygeine factor not a differentiator. But payments is exceptionally important (for the overall proposition). If payments fail, then NFC fails”.

    My thoughts – O2 is establishing a strong foundation to launch a mobile payments and commerce offer.

  • They have a successful pre-paid card already in the market (the leading UK pre-paid card according to a member of the audience from the banking sector).

  • They have 30,000+ customers in the market with NFC-enabled phones.

  • ~3 million of their current customers are already signed up to mobile offers.

    Two topics noticably absent – Apple and PayPal.

    Sign up to my blog so you don’t miss my next post, which looks at establishing the inter-stakeholder customer service models for a mobile payments offer.

  • Virgin Money – a competitive force or just another bank that fails to have an impact?

    By now we’ve heard the news that Virgin Money will be purchasing Northern Rock (the non-debt laden arm) for £747million. Bolstering their position in the market with an additional

  • 1 million customers
  • 75 branches
  • £14billion of mortgages

    The UK Government (the seller of Northern Rock) has lost £600m on the deal, following the £1.4billion nationalisation of the bank in 2008.

    BUT, have they succeeded in injecting competition into the retail banking sector?

    The big 5 – Lloyds, Barclays, HSBC, Santander and RBS – dominated the mortgage market with 72.5% market share in 2010.

    Nationwide Building Society the only real threat to the group with 9% share.

    The Financial Times, on Friday 11th November, dedicated a half page to the in-ability of new market entrants to make a competitive impact. Titled New banks are struggling to attract interest (pg. 19).

    Most notably the Metro Bank, who only managed to acquire 100 mortgage customers since their launch over a year ago.

    Virgin Money are now in a position to succeed where others have failed.

    A few important things to consider if Virgin Money are to avoid an appearance in next years FT list of struggling new banks.

    Customer retention.

    Will a Northern Rock customer fit with the Virgin brand?

    Attrition of customers is common when merging companies and brands – how disparate those brands are is typically a good indicator. Virgin needs to be considered in how they engage with their new customers moving forward, but at the same time careful not to alienate their existing ones.

    If Northern Rock customers become disillusioned with their new bank, this perhaps posses a customer acquisition opportunity for Virgin Money’s competitiors. The building societies, rather then the bigger banks, might have the upper-hand here, given the customers assumed affinity for a building society model.

    Customer acquisition

    As a global brand Virgin are a proven acquirer of customers. With a young, cool brand attracting an important customer niche – GenY. But the emerging demographic trend for this group to remain in the parents home until well after university has finished and opting to rent rather then buy. It’s unlikely this age group will move into the mortgage market for the next 5+ years.

    But who’s to say Virgin can’t attract a profitable mortgage customer?

    The challenge being faced by all lenders is a distinct lack of new customers entering the market. Potential first-time buyers are unable to generate enough equity to enter the mortgage market choosing to rent instead.

    Customers looking to remortgage: 51% are likely to stay with their current lender. But those who remortgage via an intermediary are twice as likely to switch providers then customers who book direct. So engagement with intermediaries is key.

    £25bn worth of loans will move onto SVR next year providing an opportunity for Virgin to entice customers to switch. BUT with rates expected to remain low, customers are saying they would be happy to stay put.

    All this and I haven’t even begun to discuss the challenges faced by lenders with a tightening of the money markets and waivering confidence in the euro-zone.

    Will Virgin Money come in and have an impact? Certainly from a PR perspective we should expect nothing less…but in reality it will require more then headlines to avoid being just another bank that failed to make an impact.

    Market share data is from UK Council of Mortgage Lenders.

    Consumer data is from RFi’s survey of 2000 UK mortgage holders held September 2011. For further information regarding RFi’s recent survey results please contact me.

  • Welcome

    Thanks for visiting my new blog.

    The first official post will be coming soon discussing Virgin Money’s recent acquisition of Northern Rock.

    I will outline the challenges that lie ahead and what it will take to become a significant competitor in the UK retail banking space.

    See you again soon.

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