Mawenzi Partners releases Le Regard #1 - What are the new issues for marketing in the banking sector?
"What are the new issues for marketing in the banking sector ?
The summer of 2011 was a very eventful time for French banks. On 15 July, they passed the stress tests set by the European Banking Authority designed to test their resistance to crisis scenarios. Two months later however, Moody's downgraded the credit rating of Crédit Agricole and Société Générale considering them excessively exposed to Greek debt and the slowdown of the American economy, which led to a fall in bank stocks on the financial markets (Société Générale experienced a fall of almost 64%).
This paradox is a good illustration of the crisis and instability currently affecting the banking industry. First there is the liquidity crisis. A climate of suspicion and nervousness prevails on the markets and in relations among banks. Sceptical of others' ability to overcome the crisis, banks are reluctant to lend to each other. Therefore, on some days in August 2011, deposits at the ECB reached almost €200 billion matching their 2008 levels, since banks were opting to place their surplus there despite a low rate of return (0.75%).
This situation is directly affecting lending and the image of banks among consumers. It is leading inevitably to a second crisis, this time in terms of consumer trust. The banks' image has been seriously tarnished by the injection of public funds and the debunked myth of 'too big to fail', combined with a tightening of the credit market. Only 15% of French people would recommend their bank to friends and family and only 43% still trust the banks, one of the lowest rates in Europe.
This dual crisis comes at a time when the banking sector is faced with three major changes that are set to affect their customer relations in the long term.
The first is a regulatory upheaval with the implementation of the Basel III accord scheduled for 2019. By increasing the liquidity ratio imposed on banks and the risk of certain types of deposit, this will redefine the range of savings products offered by banks to their customers and change their commercial policy.
The second is a technological upheaval with the rise of EMIs (Electronic Money Institutions) which, benefiting from technological and legislative developments, are set to become key online and mobile payment operators, increasing banks' concerns of a new and harmful form of disintermediation.
The third is a social upheaval prompted by new user habits with social media and online sharing becoming an inescapable part of everyday life. As a result, customers expect a less formal relationship and products from their bank which should incorporate a community, dynamic and participatory dimension.
How can these changes be incorporated in banks' sales and marketing strategy? By anticipating and understanding the new issues facing the banking sector, it will be possible to create a blueprint for the 'bank of the future' while restoring customer and market confidence."
You can read more about it in Our Publications section or on our Linkedin page (only French version available)