Report: Non-traditional Players in the Retail Banking Market TOC

CHAPTER 1 INTRODUCTION
- What is this report about?
- Scope of the report
- Who is the target reader?
- How to use this report
CHAPTER 2 NON-TRADITIONAL PLAYERS IN CONTEXT
- Introduction
- Non-traditional providers are now commonplace within the retail banking marketplace
  - Non-traditional providers from a range of sectors are present in retail banking markets around the globe
  - Many entered off the back of the direct banking revolution, although others have been around for much longer
    - The majority entered after the direct banking revolution
    - However, others have been in the market for many years
- Each country' s retail banking market is at a different point of development in terms of penetration by non-traditional providers
  - Australia is still new to non-traditional retail banking services
  - French retailers have entered into financial services wholeheartedly, but other providers have been more reticent
  - The German postal office is a highly developed FSI, but most retailers do not offer financial services
  - Non-traditional FSIs in Italy remain relatively undeveloped
  - Japan has a range of non-traditional providers from all types of backgrounds
  - Spanish non-traditional FSIs are gaining ground from a low base
  - The UK has a large number of different non-traditional FSIs
  - The US market is a mix of highly and barely developed non-traditional FSIs
- Entry strategies have varied, although many have entered in partnership with traditional FSIs
  - Most have entered in partnership with a traditional FSI
    - Affinity marketing does not actually mean entry into the financial services industry
    - Co-branding is a popular method that can take advantage of both brands
    - White labeling leverages the non-traditional player' s brand exclusively
    - Joint ventures offer each partner ownership
  - Yet, some have entered the market independently
  - Whether alone or in partnership, most opted for a simple product offering before launching complex products
- Non-traditional players can have a number of distinct advantages over traditional FSIs
  - Some non-traditional FSIs can use comparatively inexpensive and effective distribution
  - Non-traditional FSIs can leverage their brand
  - Offering good customer service can be an effective acquisition tool
- Yet there are weaknesses that they have not as of yet overcome
  - Many financial services products are complex to sell
  - The cost of development into a financial service provider can be high
  - In some markets, regulation still impedes non-traditional providers from penetrating the market
- Conclusions
CHAPTER 3 CASE STUDIES OF NON-TRADITIONAL PLAYERS IN THE RETAIL BANKING MARKET
- Introduction
- Post offices are potentially the greatest threat to traditional FSIs
  - Deutsche Postbank AG: a leading example of the extent to which post offices could dominate
    - A brief background to Deutsche Postbank AG
    - Postbank is a full financial services provider for private clients
    - Postbank competes on price
    - Postbank is strong in distribution and product processing
    - With BHW, Postbank has to deliver its first major integration process
    - In fact, the BHW acquisition is opening various opportunities for Postbank...
    - ... but the dominance of the Sparkassen Group remains unbroken
  - La Banque Postale: attempting diversification into new product areas
    - A brief background to La Banque Postale
    - La Banque Postale relies on its huge savings volume linked to the Livret A
    - La Banque Postale is now concentrating on building up its lending business
    - The immense savings side of La Banque Postale could support the development of its lending division
    - Becoming an effective mortgage lender will not be easy
  - The UK Post Office: the potential to have a radical impact on the UK banking market
    - A brief background to the UK Post Office
    - The Post Office has been involved in the financial services market for many years now
    - However, because of financial difficulties, the Post Office has more recently pushed further into the financial services market
    - The Post Office offers a diverse range of financial services products
    - The Post Office relies on a number of characteristics to sell financial services products
    - Moreover, the Post Office is now bringing innovation to its financial services products
    - However, while there have been successes, there is a way to go before the Post Office exerts a significant command on the UK banking market
  - Japan Post Office: sink or swim for the world' s largest deposit taker?
    - A brief background to Japan Post
    - Japan Post is a huge provider of retail financial services
    - In a radical move, Japan Post is to undergo privatization
    - But will it be successful?
- Retailers are fast expanding their provision of financial services
  - Auchan: continued improvement via low pricing and pervasive distribution
    - A brief background to Auchan
    - Auchan is one of the largest retailers in the financial services arena in Europe
    - Banque Accord is the group' s financial services subsiduary
    - Auchan has a strong product portfolio
    - Auchan follows a strategy of mass market distribution and low pricing
    - Future direction: continued expansion
  - Tesco Personal Finance: utilizing an aggressive approach to continue expansion
    - A brief background to Tesco
    - Tesco Personal Finance has used partnerships to enter the market
    - One of TPF' s main strategies is to build up customer loyalty by linking up some of its products to Tesco' s Clubcard loyalty scheme
    - In addition, a number of other strategies have contributed to its success
    - Future direction: more of the same but with greater reach
  - ICA Banken: succeeding by going down the independent route
    - A brief background to ICA
    - ICA Banken established itself independently, without a partnership with a traditional FSI
    - A card loyalty scheme is the cornerstone of its strategy
    - However, ICA Banken also relies on its cost effective distribution outlets
    - Future direction: continued expansion of services and location
  - Wal-Mart: a potential giant on the horizon?
    - A brief background to Wal-Mart
    - At present, Wal-Mart offers a limited number of financial services...
    - ...but it plans to open Wal-Mart Bank
    - At present it is unsure whether Wal-Mart will receive a banking license
    - However, if given the go-ahead on a banking license, Wal-Mart could have a large impact on the banking industry
    - Other providers besides Wal-Mart would also change the banking market in the US
- Automotive companies are gradually becoming more involved
  - BWM Financial Services: using its strong brand to acquire and retain customers
    - A brief background to BMW Financial Services
    - BMW Financial Services product and service range differs widely from market to market
    - BMW Financial Services is attempting to intensify the relationship between BMW and its customers
    - But BMW Financial Services differs somewhat from other non-traditional providers in that its main aim is to assist the core business of selling cars
  - The American Automobile Association: benefiting from its sheer size and customers' trust
    - A brief background to AAA
    - The AAA Financial Services Department was created in 1982
    - Its available product range differs from club to club
    - AAAs success can partly be attributed to its desire to add value to members
    - It also benefits from its non-profit status and customers´goodwill towards the organization
    - Yet AAAs main focus is not on financial services
- Others have also made a mark
  - Virgin Money: leveraging its group' s brand successfully
    - A brief background to Virgin
    - Virgin Money is the group' s personal finance provider
    - Virgin Money has used its group' s brand to become well-recognized and respected in the financial services marketplace
    - It has also followed the group' s main values to build up a successful business
    - Future direction: continued international growth
- Conclusions
CHAPTER 4 THE FUTURE ROLE OF NON-TRADTIONAL RETAIL BANKING PLAYERS
- Non-traditional players are gaining in importance
  - Those non-traditional providers that have penetrated their retail banking markets share common success factors
  - Moreover, it is such factors that traditional FSIs will have to face in years to come
- However, there is a long way to go
  - Indeed, there remain many businesses that have yet to get involved in the retail banking industry
- Yet, ultimately, non-traditional providers will become part and parcel of the financial services landscape
CHAPTER 5 APPENDIX
- Supplementary data
  - Data table relating to the UK Post Office profile
  - Data tables relating to the Tesco Personal Finance profile
- Definitions
  - Balances outstanding
  - CAGR
  - Captive finance house
  - FSI
  - Gross advances
  - Motor finance
  - Non-traditional FSI
- Research methodology
- Relevant readings
- Datamonitor' s custom research capabilities
- Retail Banking Team contact details
- How to contact experts in your industry
- List of Tables
  - Table 1: Key figures for Postbank, 2000-2006
  - Table 2: Key figures for La Banque Postale, 2004-2005
  - Table 3: Total assets and operating income of the major banks in Sweden and ICA Banken, 2004
  - Table 4: Key markets for BMW Financial Services, 2006 (1 of 2)
  - Table 5: Key markets for BMW Financial Services, 2006 (2 of 2))
  - Table 6: Large UK banks by the number of UK branches, 2004
  - Table 7: Tesco Personal Finance financials, 2001-2005
  - Table 8: Advertising spend on financial services by a number of traditional and non-traditional FSIs, 2005
- List of Figures
  - Figure 1: Many different types of non-traditional players are now involved in the retail banking market, but their extent of penetration in the market differs across countries, 2006
  - Figure 2: Postbank offers an extensive range of products and services, 2006
  - Figure 3: La Banque Postale' s products and services, 2006
  - Figure 4: The Post Office is now pushing its financial services, as well as other retail services, July 2006
  - Figure 5: The number of Post Office branches dwarfs all of the largest banks in the UK, 2004
  - Figure 6: Tesco Personal Finance has generated profits since 2001, 2001-2005
  - Figure 7: Part of Tesco Personal Finance' s success is due to its competitive pricing, which helps to place its products consistently in the Best Buy tables, July 2006
  - Figure 8: Tesco Personal Finance is one of the largest non-traditional financial services providers in terms of advertising spend in the UK, 2005
  - Figure 9: Tesco Personal Finance has gone for a more "fun" approach to its online platform, July 2006
  - Figure 10: ICA offers four different type of loyalty cards, three of which have debit and or credit functions, July 2006
  - Figure 11: BMW Financial Services has 26 subsidiaries worldwide, 2006
  - Figure 12: AAA Financial Services´ products and services, 2006
  - Figure 13: Datamonitor' s core consulting capabilities

Non-traditional Players in the Retail Banking Market

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