The big four banks are facing “considerable leakage of their customers' businesses” to each other, despite making some progress in cross-selling performance, according to research from Roy Morgan.
The market researcher found that 19 per cent of ANZ and NAB customers' products are held by other big four banks compared to 15 per cent of Westpac's and 12 per cent of CBA Group's.
“While the Big Four Banks have made some small gains in product cross-sell since 2010, overall they have not performed well,” Roy Morgan Research industry communications director Norman Morris said.
“Reasons for this include lack of incentive for customers to consolidate, competition from specialists providers such as for superannuation and insurance, lack of product awareness, some concern regarding the spread of risk and staff that may not feel confident in a selling role.”
Despite the “vigorous competition waged between the major banks” the report found that numerically, the biggest competitors for each of the major banks for products were other financial institutions and the major insurance companies.
The report found that 19-21 per cent of products held by banking customers are from major insurance companies and between 24 and 27 per cent are from other institutions.
Roy Morgan noted that Industry Super Funds in particular is a major competitor with the banks in terms of value despite only holding 4 to 5 per cent of products held by customers in the major banks.
“It is clear from the analysis that there is plenty of scope for these banks to increase their business from their existing customers rather than chasing new ones,” Mr Morris added.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 16 Mar 2018CBA CEO pushed for FOFA extensionBy James Mitchell and Aleks Vickovich
- 16 Mar 2018CPA dealer group clashes with FASEA requirementsBy Katarina Taurian
- 16 Mar 2018NAB launches virtual assistant for superBy Staff Reporter
- 15 Mar 2018IFA-focused platforms open to new strategiesBy Staff Reporter
- 15 Mar 2018Deakin eyes advisers to fill staff demandBy Killian Plastow
- 15 Mar 2018Adviser Innovation Summit 2018 agenda announcedBy Staff Reporter
- view all