Choice magazine talks about their views on recent merger activity

From The Age:

"It's clear that competition in the banking sector is not working as well as it should. In fact, competition is getting worse, not better.

Indeed, what's not clear is how a merger between one of the Big Four and the fifth biggest bank in Australia (with a particularly strong position in NSW and South Australia) will increase competition. Even if the cost of funds decreases as promised, there is no guarantee that any benefit will be passed on to customers. This is precisely why competition needs to have priority over other considerations."

...

"How many bank customers who were thrown into a rage because of poor service or high fees have had to back down on their threats to leave the miscreant bank because it is just all too hard? While 25% to 40% of bank customers express dissatisfaction with their current institution, only 3% actually switch accounts.

As things stand, customers are not able to drive competition by easily choosing a better deal, and that means incentives to offer better products are undermined. A competitive market will encourage banks to innovate — to offer attractive differences in price or service to draw new customers — but this can't work where it's too difficult for consumers to switch."

Article continues...

Westpac & St George in merger talk

The Age this morning reveals Westpacs approach to St George for a merger, creating the largest bank in the country. The obvious link between the 2 is Gail Kelly, former StG CEO and current Westpac CEO, who revealed the plans with the following comments - ''It would create Australia's leading financial institution with regard to meeting customer needs, distribution, strong brands, scale, financial strength and the best products,'' Mrs Kelly said. ''For customers, it would make it more convenient to access customer touchpoints, including the largest distribution network with over 1,200 branches and in-stores as well as more than 2,700 ATMs. It would also provide greater diversity and choice of products from both organisations.'' Interesting times ahead, given the volatility of the financial sector in recent times - it shows the apparent strength in these 2 businesses to be talking merger - I guess Ms Kelly knows them better than most.

May 13 update - it seems its all go, with the 2 banks to make a joint announcement. Interesting analysis by Robert Gottliebson in BusinessSpectator on the new customer experience focus Gail Kelly is pushing:

"To bring out the change Kelly plans to implement at Westpac I have changed the order of some of her radical Westpac strategic aims:

• "Significantly improve the (Westpac) customer experience; Drive a strong customer culture; develop and implement compelling customer segment strategies, integrating banking and wealth;
• "Focus on being easier to deal with; transform service delivery, redesigning processes end to end"

Even her more conventional aims for Westpac are couched in customer terms. Remember that the whole focus of the Kelly strategy at St George bank was to build a better relationship with its customers than the big four banks and she attacked them with incredible vigour. Those aims show that Kelly has not changed her spots despite being in a different cage."

This renewed focus on the customer (when and why did it ever go away?) is great for our industry especially in the context of this merger - this merger must benefit customers to align with the strategic planning Kelly has brought on board.

Westpac Business IQ

Hot on the heels of the new NAB Business website, and ANZs refresh of their site including business, is Westpacs Business IQ site, which we were alerted to this week. Split into 3 main areas - Planning, Cash Flow, Women in Business - the site eludes to a new visual direction for Westpac - I hope it continues across the rest of the site! Also here is a listing of workshops, advice guides, etc but it all seems a bit light on ... look to this space for its future development.

Wikis may be working for Westpac

From TheSheet.com via Financial Standard:

"The arrival of Gail Kelly at the helm of Westpac may accelerate the bank's adoption of "Web 2.0" tools such as blogs, wikis and social networks, allowing staff to share information freely and collaborate online.

The bank already has around 1000 user generated wikis (that is, online collaboration tools), has used the virtual environment Second Life as a training venue and allows staff to access Facebook from their work computers. Westpac chief information officer Simon Macnamara meanwhile is a veteran bank blogger. Unfortunately, the blog is for internal readers only.

Westpac is acknowledged as the Web 2.0 leader among the big four banks, and chief technology officer David Backley believes it will prove a competitive advantage in terms of attracting and retaining key talent as well as opening new avenues for customer interactions."

Article continues...

Its time for all banks to make a decision on 2.0 - is it a must have or a nice to have? Do we need to make this a priority? Does it need visibility across our businesses?

Net Promoter Scores 2006 - guess the one bank in the black

This from MBS, the Net Promoter Scores for Australia 2006 across a variety of industries - auto, banks, health insurance, tourism, mobiles, computers, etc. Completed by Mark Ritson, a friend of TheBankChannel. Excellent and revealing reading! Read his media release here.

Bendigo, like their customer satisfaction, dominates with the only positive net promoter score at +7 in the banking industry. HSBC was next, which was interesting, at -8. ANZ -24, St G -30, Westpac -39, NAB -42, CommBank -54 .... heck.

NZ Banks Continue To Make Gains In Satisfaction, Bendigo wins in Aus again

Click on the image to see a bigger version.

New Zealand Bank Performance

Roy Morgan reports NZ banks are continuing to improve as a group, with the leader minor bank TSB with a staggering 93.2% of customers satisfied with their service.

Roy Morgan New Zealand found that in the 12 months to July 2007, satisfaction reported by customers of the five major banks improved 3.8 percentage points to 75.6%.

The biggest improver was Westpac, with those who have any relationship with Westpac increasing their satisfaction level by 6.1 percentage points to 71.1%. While this represents a steady and significant improvement over the past 12 months, Westpac still trails its competitors.

Another interesting point is the entrance of government/post office owned Kiwi Bank that started and remained at number 2, but looks to be coming back to the advancing pack.

Australian Bank Performance

Meanwhile Bendigo has again won the latest customer satisfaction round here in Oz. The Roy Morgan Research Consumer Banking Customer Satisfaction Report (August 2007) ranked Bendigo Bank as the highest of any Australian bank in terms of customer satisfaction. Bendigo Bank received a 90.6 percent customer satisfaction rating.

ANZ received a 75.6 percent rating; Commonwealth Bank a 68.1 percent rating; NAB a 68.9 percent rating and Westpac a 72 percent rating. St George and Suncorp both received a 79.3 percent rating. Adelaide Bank received a rating of 82.6 percent higher than Bank of Queensland and BankWest which received ratings of 82.1 percent and 72.4 percent respectively.

Normal service will now resume...

Phew... dont try and renovate (and I mean completely), house sit your in laws place, deal with family drama issues and organise a bucks day in the same month. It's not condusive to good work and good blogging. Apologies for the lack of activity, but back on deck...

Suppose you all saw the new Westpac site - I cant say much has improved or changed, but its good to see some activity there. Under the hood the site seems the same as before though, so some transition still to be made there.

And you may have read Barclays have rolled out the Oyster payments card:

"Barclaycard today launched its combined contactless Oyster travel and debit card, OnePulse, in London.

The card has a standard chip and PIN payment system, Oyster card functionality and Visa's 'wave and pay' contactless payment technology, which can be used for transactions of £10 or less and billed on the credit card account.

In December, Barclaycard won a deal with TranSys - the consortium which runs the Oyster card system - that gives it the exclusive rights to place Oyster on its Visa cards for the next three years."

From Westpac - Send Freddie Flying, and Wheres Your Head At

Its been a while since Westpac have made some real inroads into richer online experiences. A lot of their resources seem to pour into media placement - they're one of the countrys biggest online media buyers, I read in Adnews.

Nice promo and game from Westpac (specifically their Westpac Plus product) - Send Freddie Flying - to win ticketek prizes. Built by NetX.

Also, linking off this site - Wheres your head at? - a financial literacy and information site for (it seems) those customers new to banking products and certain life stage events. Reminds me a little of KnowYourMoney from CommBank - these sites are becoming popular ...