Banking Review

Banks winning the PR war over rates

Charis — Fri, 18 May 2012 02:58:47 +0000

ANZ’s head of Australian banking, Phil Chronican, believes that the big banks are finally winning the public relations war over interest rates. The public backlash against banks’ interest rate policies is subsiding, he told The Australian this week.
“I feel we’ve moved the debate on and that the commentary over recent weeks is evidence that at least people are now thinking more seriously about what the real issues are.” Chronican may be right. This month, since the RBA cut rates by 0.50 per cent, ANZ and the other banks have enjoyed relatively mild commentary about their rate settings.

ANZ seems to have completely escaped media criticism for raising rates on all its’ credit card products by 0.15 per cent in the last week of April. Last week ANZ took the full 0.5 per cent from its online saver interest rate, moving it from 6 per cent to 5.5 per cent but only 0.37 per cent off the standard variable mortgage rate. And that was after raising its SVR by 0.06 per cent in April.
Westpac has cut its standard variable home loan rate by 0.37 per cent to 7.09 per cent and its eSaver account rate by 0.40 per cent to 5.2 per cent. Commonwealth Bank cut both savings and mortgage rates by 0.40 per cent according to Infochoice and left card rates untouched,.
Only National Australia Bank has passed on any of the RBA’s May rate cut of 0.50 per cent to credit card holders, with a cut to card rates of 0.25 per cent. Meanwhile NAB took 0.5 per cent off its iSaver account rate which is now 5 per cent and 0.32 per cent off its standard variable mortgage rate which is now 6.99 per cent.
The biggest cut to savings rates has been from Suncorp Bank which has slashed savings rates by 0.65 per cent on its eOptions High Interest Online Savings account to just 3.85 per cent.

Jason Bryce

Cardholders not so keen on PayPass and TapNGo

Charis — Fri, 18 May 2012 02:10:39 +0000

Only a third of consumers own a contactless card and those who do rarely use the contactless technology according to a report by RFi. A survey of 2000 consumers found that 48 per cent of those who have a contactless card never use it and 16 per cent use it less than once a month. Only three per cent use it daily.
The main barriers to uptake of payment innovations include uncertainty about the technology’s longevity, concern about security and limited merchant acceptance. Consumers registered almost no interest in such technologies as smartphone cases with memory cards, watches with SIM cards and key fobs with payment chips.
Banking Day

ASIC concerned about lenders use of comparison rates

Charis — Thu, 17 May 2012 00:10:21 +0000

ASIC said it had identified numerous areas of non-compliance with NCCP guidelines around comparison rates. The watchdog said many lenders are not advertising the rates correctly.

“ASIC wishes to ensure that advertising of the cost of credit and the use of comparison rates is not confusing or misleading, and that it assists consumers to make informed decisions when purchasing credit products,” the regulator said.

The problems ASIC identified were lenders failing to consistently advertise comparison rates along with annual percentage rates, not advertising the rates prominently enough, failing to include an NCCP prescribed disclaimer about the accuracy of comparison rates and failing to properly calculate comparison rates.

Australian Broker News

Business banking customer satisfaction falling

Charis — Thu, 17 May 2012 00:06:49 +0000

Business bank customer satisfaction has fallen in March by 0.7 percentage points to 65.6 per cent, compared to 66.3 per cent in February. This is the first decline since July 2011 when the satisfaction level was much lower at 61.9 per cent. With businesses feeling less like borrowing in these uncertain times and banks obviously more prudent in lending, a drop in satisfaction is likely to be one of the outcomes.
Not all businesses have such a pessimistic outlook with micro businesses (turnover less than $ 1 m PA) having the lowest level of confidence but they make up 89% of businesses. The most optimistic are the medium / large businesses (turnover $5m + PA). Between February and March, satisfaction with banks among micro customers fell by 0.8% points, small businesses fell by 0.7% points but medium / large businesses increased their satisfaction by 1.4% points.
Roy Morgan Research

CBA’s NetBank upgrade to be rolled out “in groups”

Charis — Wed, 16 May 2012 00:08:25 +0000

Changes to Commonwealth bank’s online banking service, Netbank are being rolled out “in groups over the next few months. This means that you might get all of the changes before your family or friends, or maybe a little while after,” said CBA in its regular blog this week. “We’re hoping that within a few months though, everyone will be enjoying everything the new-look NetBank has to offer.”
“The new design makes it easier to see other useful figures, like how much you can spend on your credit card and foreign exhange rates that can help you decide whether to be shopping online via the US or the UK. Plus to help you move around NetBank, we’ve simplified the menu bar at the top of the page and added quick access to some useful tools and help at the bottom of every page. Searching through your transactions is easier too.”
Commonwealth Bank Blog

ANZ believes it is winning the PR war over rates

Charis — Wed, 16 May 2012 00:01:18 +0000

ANZ Bank’s head of Australian banking, Phil Chronican, says he suspects the backlash against the big banks over interest rates is subsiding after the subdued response to ANZ’s decision last week to cut mortgage rates by only 37 basis points after the Reserve Bank’s 50-basis-point cut in the official cash rate.
“I feel we’ve moved the debate on and that the commentary over recent weeks is evidence that at least people are now thinking more seriously about what the real issues are.” Chronican described the monthly rates decision and surrounding media interest a ”dog and pony show”.
The Australian

Channel management is the new buzzword in retail banking

Charis — Tue, 15 May 2012 05:50:02 +0000

The banking industry may well be on the precipice of another global crisis caused by consumers deleveraging and fiscal weakness in many countries according to CapGemini’s World Retail Banking Report. The report surveyed 18,000 bank consumers globally. The latest ABS home loan data, released yesterday, shows that deleveraging continues apace in Australia
Channel management is today’s buzzword – To become more efficient distributors, banks need to improve channel integration and their ability to serve customers seamlessly between channels. Distributors specialize in channel management. While retail banks must maintain a much leaner operation, many banks are still seeking to be end-to-end operations that do everything.
Meanwhile three categories of retail banking specialists are emerging—product innovators, distributors, and utility/processors. Retail banks must identify where their strengths lie along this spectrum argues CapGemini.
For the big four banks, the authors suggest that they take note that ‘too big to fail’ means ‘too big’ to increasing numbers of politicians and consumers.

Jason Bryce

CommBank and ING Direct named as world leaders in mobile banking

Charis — Tue, 15 May 2012 05:39:55 +0000

ING Direct and Commonwealth Bank are named as leaders in mobile bank apps by CapGemini’s World Retail Banking Report. CBA was mentioned for “breaking down channel silos by allowing account applications started in one channel to be completed in another.” ING Direct’s smartphone app was mentioned for allowing bump transfers between phones.

49.6 per cent of customers have used mobile banking reports CapGemini. More than 60% of customers world wide will likely use mobile banking by 2015.

Jason Bryce

Half of bank customers are waiting for tick & flick switching reforms

Charis — Tue, 15 May 2012 00:38:28 +0000

Roy Morgan research found one in five Australians are likely to change financial institutions in the next year, rising to almost 50% of people if the paperwork and administrative effort was substantially reduced.

Abacus – Australian Mutuals today welcomed the research and pointed to Federal Government “tick and flick” account switching reforms starting in July that will mean Australians can dump their current financial institution more easily than ever before.
The Roy Morgan research commissioned by Abacus was a National web-based survey among 18-64 year olds and delivered the following key findings:
• 21% of people are likely to change their main financial institution in the next 12 months, with interest rates not being competitive (35%), and high or unfair fees (30%) listed as the main reasons for the change.
• 49% of people would be likely to change their main financial institution in the next 12 months if the administration process of moving finances, direct debits and scheduled payments could be handled automatically by their new financial institution.
From July 1, instead of requesting a list of regular debits and credits from their ‘old’ bank, Australians can let their ‘new’ bank do the work for them by signing authorisation forms to allow the establishment of regular debits and credits to the new transaction account.
The Roy Morgan research on account switching also found that:
• The most frequently cited factors considered important when considering changing banking provider were the costs of fees and charges (92%), competitiveness of interest rates (78%), and the convenience of branches and ATMs (75%).
• More work needs to be done to build on the considerable public and consumer sentiment for Mutual or Customer Owned Banks to increase awareness of our financial institutions, particularly among younger age groups.

CommBank’s InvestorVille game has 23,000 players

Charis — Sun, 13 May 2012 23:42:04 +0000

The Commonwealth Bank of Australia has deployed gamification to increase revenue in its home loans division. CBA’s Investorville app released in August 2011 encourages users to ‘invest’ in property using real data in a real-time situation. The aim of the app is to “demystify” property investment and, of course, to sign up for a home loan with the bank.
“We were familiar with using RP Data feeds, so a lot of the hard work and the complexity that sits in the back end of [Investorville] we were already used to dealing [with],” says Martin Whelan, general manager of consumer marketing at the Commonwealth Bank. Whelan says the key to Investorville’s success is that it employs both online tool elements and gaming functions. “If it was just a tool, it would have been quite dull and probably uninteresting. We probably wouldn’t have gotten a customer to give us that information in a tool, but they actually are doing it in a game,” he says. “If you have that engagement you get a much…better outcome.”
Investorville was initiated by CBA’s marketing department and a business case was not required for its development. Whelan says the team still had to ensure objectives were satisfied and revenue was positively impacted on. A little more than 23,000 users have registered for Investorville since August last year, with 12 per cent of players visiting the Commonwealth Bank home loans page.
ComputerWorld