Banks Need To Reassess Cross-Selling Efforts

For decades, cross-selling has been a strategic priority of banks and credit unions since earning more business from current customers is the most efficient way to achieve growth. Despite this focus, a new study indicates that many financial institutions may be far from realizing the full potential of cross-selling.

In fact, according to the study, only 19 percent of retail bank customers owned three or more products in addition to a checking account with their primary bank compared to 49 percent who have three or more products with other financial institutions.

A just released Deloitte report entitled, 'Kicking It Up a Notch: Taking Retail Bank Cross-Selling to the Next Level' supports the view that success in cross-selling targeting may need to move beyond traditional product ownership, satisfaction and tenure parameters to include a behavior segmentation approach that takes into account perceptions based on total account holdings. 

While the Deloitte survey shows that banks have generally achieved long tenure and a high degree of satisfaction with customers, this success has not translated into multiple product relationships. In fact, the study found that there is a positive correlation between the number of products a customer uses and their desire to use multiple institutions.

Source: Deloitte Center for Financial Services

According to the study, customers only turned to their primary financial institution for a savings account on a consistent basis. In fact, while 75 percent of respondents owned credit cards, only 33 percent had one that was issued by their primary bank. Obviously, this could be the result of an inferior offer, poor marketing and/or the absence of a primary bank offered credit card, but it still illustrates a major opportunity gap.

Some of the other 'opportunity gaps' may be caused by poor cross-selling at the time of account initiation, poor customer education on the benefits of relationship consolidation or even beliefs that a primary bank is not the best place to build a specific relationship (wealth management or insurance products).

Source: Deloitte Center for Financial Services

Moven: From Mobile Banking to Mobile Money

February is definitely a pivotal month for the start-up previously known as Movenbank, having changed it's name to Moven, winning the best of show honors at Finovate Europe and gearing up for a February 25 closed beta launch of its mobile-optimized financial services application. 

Founded by Bank 3.0 author Brett King, with $2.4 million in seed funding, Moven is the latest but not the last in a plethora of unique banking alternatives including Simple™, GoBank™ and Bluebird™.

So what sets Moven apart from not only traditional banking organizations, but also the less traditional financial intermediaries that are entering the banking battlefield? 

First of all, Moven is not a bank. Similar to Simple, while not having a banking charter, Moven provides a unique customer experience interface with a traditional banking organization working in the background (with banking licenses, FDIC insurance, etc.). The focus of Moven from the beginning of development has been to 'help customers spend, save and live smarter' using mobile technology.

According to Brett King, "With Moven, we're not talking about downsizing an Internet banking portal onto a mobile screen or downloading a debit card onto a mobile wallet. Instead, we are creating an entirely new way of thinking about a bank account, giving the customer mobile insight and control every time they make a decision that could impact their financial health."