AMP and Industry Funds as major providers of superannuation for both consumer and businesses have had very little success at selling banking products to their customers. This is shown by the fact that only 1.6% of Industry Fund personal members deal with ME Bank and only 2.7% of personal AMP Superannuation Fund members deal with AMP bank. For business customers the position is just the same with only 4.0% of AMP superannuation customers dealing with AMP bank and 0.7% of Industry Fund customers dealing with ME Bank. These figures are based on the latest findings from the Roy Morgan Consumer and Business Finance Single Source Survey.
In the 12 months to July 2013, 60.3% of Westpac personal superannuation customers had a banking product with the Westpac Group*, followed by the CBA Group* at 59.6%. The figures for ANZ and NAB are lower at 45.3% and 34.9% respectively. AMP Group, which has over 1 million personal superannuation customers but only 2.7% of these customers have a banking product with the group. Industry Funds with over 6 million personal superannuation members have only 1.6% with an account at ME Bank.
Over the last few years, the big 4 banks have capitalised on cross selling to their superannuation customers, with Westpac reporting the largest increase, followed by NAB, ANZ and CBA. For other institutions that are keen to expand their footprint in traditional banking, this can be a good opportunity to explore. More importantly for AMP Group and Industry Super this can be a great starting point to attract new banking customers.
Among business superannuation customers during the most recent survey period (12 months to July 2013), Westpac reports the highest proportion with 59.3% of its superannuation customers having a banking product with them, followed by CBA Group at 49.4%, ANZ Group at 41.5% and NAB Group at 38.6%. The selling of traditional banking products to its business superannuation customers is slightly better for AMP Group at 4.0% compared to its consumer counterpart. The opposite is seen for Industry Funds, with only 0.7% of its business customers dealing with ME Bank for their banking needs.
Over the last year, ANZ Group is the only institution to report a strong growth (up 9.1% points) in the proportion of its business superannuation customers who have a banking product with them. Both, CBA and Westpac report a modest growth and NAB experienced a decline (down 5.3% points). The AMP Group and Industry Funds remained steady over the period.
Source: Chart 1: Roy Morgan Research Consumer Single Source, August 2012-July 2013, n=33,914. Chart 2: Roy Morgan Research Consumer Single Source, August 2012-July 2013, n=10,321. *Banking products held at ME Bank
Norman Morris, Industry Communications Director, Roy Morgan Research says:
“Cross-sell of financial products is an increasingly important target of all the major financial service providers to try and increase their share in the current competitive market. Over two thirds of the consumer and business population (13.4 million consumer’s aged 14+ and 1.4 million businesses) in Australia have a superannuation account and it would be beneficial to capitalise on their existing relationship with the institution by cross selling banking products as has been recognised by Industry Funds with ME Bank and AMP with AMP Bank.
"In the past, the superannuation industry has not been building on the significant relationship they have with their members by selling them additional products, however, we are seeing a change in recent years but there is still a long way to go.
"The superannuation specialists are obviously up against tough competition from the big four banks when it comes to banking products because their members already have relationships with these banks. Giving superannuation customers a reason to change banks from the major’s to the bank aligned or owned by the Superannuation Fund is the challenge.”
* Westpac Group includes St. George, Bank of Melbourne and Bank SA
* CBA Group includes Bankwest
Roy Morgan - B2B
Australia’s leading B2B market research These findings are from the Roy Morgan Business Single Source survey, the most comprehensive B2B research in Australia which interviews over 30,000 business decision makers p.a. The research covers business confidence, telecommunications, banking & finance and business media use which can be analysed by number of employees, annual turnover, head office and operating locations, sources of revenue and financial performance and expectations. Ready Made Research reports include Business Confidence and Business Banking Satisfaction.
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