Affinity and Partnership Marketing in UK Mortgages and Savings Accounts

Table of Contents

0.0 EXECUTIVE SUMMARY

• Research background and structure
• Examples of partnership marketing of mortgages exist across many affinity sub-categories
• … with the vast majority of initiatives identified adhering to a brokerage operating model
• … and with only the Britannia, among actual mort. lenders, holding a significant number of ties
• Although fewer in number, affinity savings accounts are also offered by a variety of partner types
• … with successful examples extending beyond the trad. territory of charities and football clubs
• The rising use of on-line aggregation and price comparison services presents a major challenge
• … and there is scope for comparing developments in the UK with those in continental Europe

1.0 INTRODUCTION

• Finaccord
• UK affinity and partnership marketing publications
• Other UK consumer research publications
• PartnerBASE™
• Definitions
• Rationale
• The channels used to distribute financial products and services in the UK continue to proliferate
• … with on-line affinity and partnership marketing having growing rapidly in importance of late
• Methodology

2.0 MARKET OVERVIEW

• Affinities and partnerships in UK mortgages and savings accounts
• Finaccord' s research identifies almost 200 current affinity schemes for promoting mortgages
• … with most intermediated by an aggregator or broker rather than placed with an actual lender
• The research also extends to 135 partnership marketing initiatives for savings accounts
• … over 60 of which are attributable to the football club sub-category

3.0 NOT-FOR-PROFIT AFFINITY GROUPS

• 3.1 Charities
  • Introduction
  • Analysis of partnerships
  • Just two charities have any involvement in the provision of mortgages to their supporters
  • … although affinity savings accounts are widespread among both local and national charities
  • intune' s main target market is the affluent over-50 age group served by Saga
  • … and the company is interested in working with suppliers that fulfil a variety of criteria
  • intune is employing a multi-channel distribution strategy including the charity' s high street outlets
  • … as it seeks to reach an operating profit of £15 million per annum by 2012
• 3.2 Professional associations
  • Introduction
  • Over 50 professional associations possess in excess of 5,000 individual members
  • Analysis of partnerships
  • The vast majority of professional associations offering motor insurance do so through a broker
  • … with Parliament Hill having expanded its roster of member benefits clients to 11 associations
  • A further seven brokers are active in organising mortgages on an affinity basis to this audience
  • Very few professional associations have chosen an accredited provider of savings accounts
• 3.3 Trade unions
  • Introduction
  • Analysis of partnerships
  • The Britannia has secured three exclusive mortgage distribution deals with trade unions
  • … although a majority of unions collaborate with brokers rather than the lenders themselves
  • Several trade unions hold well-established links with a dedicated provider of savings accounts
• 3.4 Other not-for-profit affinity groups
  • Introduction
  • Lifestyle organisations
  • The Listed Property Owners Club is affiliated to Professional Mortgage Services for mortgages
  • Political parties
  • Members of Plaid Cymru benefit from being able to access a dedicated credit union

4.0 FINANCIAL PARTNERS

• 4.1 Banks
  • Introduction
  • Analysis of partnerships
  • Citibank, through its partnership with Charcol, is unique in adopting a mortgage broking model
• 4.2 Building societies
  • Introduction
  • Analysis of partnerships
  • The Hanley Economic remains the only building society to have shifted to a brokerage model
• 4.3 Credit unions
  • Introduction
  • Three Scottish credit unions offer mortgages to their members, one through a brokerage unit
• 4.4 Friendly societies
  • Introduction
  • Analysis of partnerships
  • Friendly society involvement in mortgage lending is currently restricted to a handful of initiatives
  • Police Mutual' s Premier Cash Account is offered in conjunction with Anglo Irish Bank
• 4.5 Insurance companies
  • Introduction
  • Analysis of partnerships
  • Four insurance companies intermediate mortgages through their own mortgage broking unit
• 4.6 On-line aggregators and brokers
  • Introduction
  • Analysis of partnerships
  • Charcol and Moneysupermarket.com each lay claim to a brace of external relationships
  • … although a clutch of other entities are also active in providing searching facilities to this sector
  • For savings, only Moneysupermarket.com and The Motley Fool act as external partners
• 4.7 Specialised lenders
  • Introduction

5.0 COMMERCIAL ENTITIES

• 5.1 Automotive associations
  • Introduction
  • Analysis of partnerships
  • The partnership between the csma and LV= has been in place for over 80 years
• 5.2 Automotive dealers, repair shops and supermarkets
  • Introduction
  • Analysis of partnerships
  • Many automotive dealerships owe their survival to revenues derived from financial services
  • … although with one significant exception, mortgages do not enter the equation
• 5.3 Automotive manufacturers
  • Introduction
  • Analysis of partnerships
  • The savings products launched by BMW with the Newcastle add up to a significant development
  • The new products are designed to re-enforce customer loyalty to the BMW brand
  • BMW' s affinity marketing partners were selected for three main reasons
• 5.4 Cricket and rugby clubs
  • Introduction
  • Analysis of partnerships
  • Affinity savings accounts marketed through cricket and rugby clubs are relatively few
  • … albeit both cricket and rugby attract sponsors from the financial services sector
• 5.5 Estate agents
  • Introduction
  • Analysis of partnerships
  • Charcol has signed up the largest number of exclusive estate agency partnerships
  • Brokers linked to Legal & General Partnership Services and Openwork are also numerous
  • Most on-line estate agency portals prefer to carry adverts rather than acting as affinity partners
• 5.6 Football clubs
  • Introduction
  • Analysis of partnerships
  • The number of clubs promoting mortgages on an affinity basis has grown in recent years
  • … with the Britannia having emerged as the main protagonist by means of links with five clubs
  • Almost two thirds of football clubs offer affinity savings accounts to their supporters
• 5.7 Internet, media and telecoms entities
  • Introduction
  • Analysis of partnerships
  • All entities distributing mortgages in this category have opted for a brokerage model
  • … with five providers having established more than one mortgage searching deal each
  • over50s.com is unique in linking with a bank rather than an aggregator for its savings account
• 5.8 On-line price comparison providers
  • Introduction
  • Analysis of partnerships
  • A number of on-line price comparison providers offer own-brand mortgage searching facilities
  • … although only three are involved in this activity in the context of savings accounts
• 5.9 Retailers
  • Introduction
  • Analysis of partnerships
  • A number of the UK' s major retailing brands are being leveraged to promote mortgages
  • … although many more remain reluctant to participate in this fiercely competitive market
  • National Savings & Investments is seeking to diversify into the retailing distribution channel
  • Greenbee will allow the John Lewis Partnership to expand its share of total client expenditure
  • Fit with the values of the John Lewis Partnership has been key to selection of affinity partners
• 5.10 Other commercial entities
  • Introduction
  • Branded conglomerates
  • Saga and Virgin leverage their brands across the full consumer financial services spectrum
  • Loyalty schemes
  • The loyalty schemes category extends to a range of diverse travel and other reward programs
  • … with several offering the chance to earn points through taking out mortgage loans
  • The Post Office
  • The Post Office has extended its financial services joint venture with Bank of Ireland to 2020

6.0 EUROPEAN INNOVATIONS

• Introduction
• Events in affinity and partnership marketing in Europe, 2006 and 2007
• Winter 2006
• Citibank unveils new affinity marketing ventures in Belgium and the Czech Republic
• UBS launches Swiss charity card with Optimus Foundation
• Banque Accord' s Oney.fr links with on-line hi-tech retailing specialist in France
• Bank of Ireland ties with La Caixa for Irish consumers buying property in Spain
• BPU Banca launches InItaly immigrant financial services proposition
• CreditPlus Bank signs distribution deal with Bertelsmann book club in Germany
• Deutsche Postbank targets lawyers through legal publishing affinity card
• American Express unveils new bank partnerships in Romania and Russia
• Cetelem forms consumer finance joint venture with French building firm
• San Paolo IMI and Veneto Banca tie up commercial affinity group deals in Italy
• Spring 2006
• CC Bank and Lidl tie for credit card with petrol discount offer in Germany
• ABN AMRO creates partnership with Dorpspunt to grow rural penetration
• Fiditalia and leading technology distributor tie for consumer finance and card proposition
• Banque Accord and Norauto extend collaboration to private label card
• American Express enters Bosnia-Herzegovina through card issuing deal with CFU
• Grupo Santander initiates affinity banking link with parliamentary association
• Through AUTOSCOUT24, Volkswagen secures on-line partner for financial services
• Banca Intesa and eBay collaborate to target over 500,000 Italian SMEs
• LaSer introduces new affinity cards with automotive repair centre and football club
• Millennium BCP seals affinity link with economists' institute in Portugal
• CIC establishes tie with OSEO for start-up and small business loans in France
• Juventus and Banca Popolare Italiana launch pre-paid Kalibra card
• Summer 2006
• Citibank rolls out new airline co-branded credit cards in the Czech Republic and Hungary
• American Express expands network of banking partners to Serbia and Slovakia
• CGD creates affinity banking deal with Portuguese economists
• Finaref introduces private label card in association with Téléshopping
• Banca Intesa works with local authority for mortgage designed for temporary workers
• GE Money Bank ties for on-line finance deal with German arm of Fujitsu Siemens
• Crédit Agricole links for European automotive finance joint venture with Fiat
• Groupe Caisse d' Epargne and Carige forge Italian consumer credit joint venture
• Autumn 2006
• Citibank rolls out new co-branded cards in Greece and Sweden
• Commerzbank launches co-branded card with Steigenberger Hotel Group
• Through GCE Fidélisation, Caisses d' Epargne signs up to S' Miles loyalty scheme
• HSBC ties with Banco Sabadell unit to serve UK nationals residing in Spain
• Fortis and An Post finalise details of Irish financial services joint venture
• Rabobank and WNF unveil green affinity credit card in the Netherlands
• MLP forges affinity financial services link with association of dental students in Germany
• Winter 2007
• Citibank launches new co-branded credit cards in Greece and Hungary
• Landesbank Berlin links with Amazon for co-branded card in Germany
• BBVA' s Barceló Viajes Visa credit card amasses 60,000 clients since launch
• Santander rolls out affinity banking strategy for affluent foreign nationals
• Banco Sygma forges loan distribution link with Spanish insurer
• Spring 2007
• LaSer Group initiates a trio of new affinity ventures in France and the Netherlands
• GE Money Bank and Kia partner for automotive finance joint venture in Germany
• Citibank and Shell introduce co-branded card in Denmark
• Deutsche Bank ties with pharmacy chain for German consumer credit venture
• Landesbank Berlin introduces two new co-branded cards with media affinities
• UEFA EURO 2008 MasterCard launched by UBS in Switzerland
• Crédit Agricole and OSEO strengthen partnership to serve French SMEs
• Summer 2007
• CGD introduces co-branded card in association with MTV for Portuguese youth
• … inspired by Caja Madrid' s successful program with the same partner in Spain
• Caja Madrid launches Aquí-Allá debit card for immigrant market in Spain
• Finaref introduces Madelios private label card with single outlet retailer in France
• BNP Paribas ties with nine regional mutual insurers serving students
• Citibank launches Russian travel co-branded card through link with Kuda.ru travel agency
• … and ties with EKO Natural Gas for affinity loans in Greece
• Monte dei Paschi di Siena renews link with Enel to encourage solar power systems
• Agos and Piaggio form relationship for branded motor cycle finance in Italy
• Banesto concludes affinity financial services partnership with UNICEF in Spain
• CreditPlus Bank links with T-Online for Internet lending initiative in Germany
• Commerzbank creates on-line marketing tie with German arm of eBay
• Landesbank Berlin introduces new co-branding schemes with media affinities
• GE Money Bank launches new credit card with leading German technology retailer
• MLP and Interhyp establish mortgage joint venture in Germany
• Autumn 2007
• LaSer reinforces co-branding activity in France through launch of flagship card
• BNP Paribas and Orange combine for co-branded card in deregulated French market
• Go Sport France selects Finaref as partner for financial services development
• American Express secures Kazakh and Lithuanian bank partnerships
• Citibank introduces new co-branded card with prominent Belgian electricals retailer
• BNL and Intesa Sanpaolo enter into affinity lending deals for Italian pensioners
• Santander ties with Portuguese SME trade association for affinity banking package
• Nordea acquires Stockmann financial services business and targets international expansion
• Bankinter assumes control of Capital One joint venture with 290,000 customers
• Fiditalia and Zurich launch new revolving co-branded credit card in Italy
• Hypovereinsbank' s FC Bayern SparKarte exceeds 150,000 cards in circulation
• BAWAG PSK injects new momentum into post office bank through a raft of innovations

GRAPHICS / TABLES

• The affinity and partnership marketing universe
• Entities contacted for the research, segmented by broad category
• Affinity and partnership marketing schemes for mortgages in the UK: penetration by type of partner
• Affinity and partnership marketing schemes for mortgages in the UK: segmentation by op. model and comp
• Affinity and partnership marketing schemes for savings accounts in the UK: penetration by type of partner
• Affinity and partnership marketing schemes for savings accs. in the UK: segment. by op. model and competitor
• Charities offering mortgages through partnerships
• Charities offering savings accounts: penetration, operating models and partner market shares
• Charities offering pet insurance: penetration, operating models and partner market shares
• Ranking of professional associations in the UK by actual or approximate number of members
• Ranking of professional associations in the UK by actual or approximate number of members (continued)
• Professional associations offering mortgages: penetration, operating models and partner market shares
• Professional associations offering savings accounts: penetration, operating models and partner market shares
• Ranking of trade unions in the UK by actual or approximate number of members
• Trade unions offering mortgages: penetration, operating models and partner market shares
• Trade unions offering savings accounts: penetration, operating models and partner market shares
• Lifestyle organisations offering mortgages through partnerships
• Political parties offering savings accounts through partnerships
• Building societies offering mortgages: penetration, operating models and partner market shares
• Friendly societies offering mortgages: penetration, operating models and partner market shares
• Friendly societies offering savings accounts through partnerships
• Insurance companies offering mortgages: penetration, operating models and partner market shares
• On-line aggregators and brokers offering mortgages: penetration, operating models and partner market shares
• On-line aggregators and brokers offering savings accs.: penetration, op. models and partner market shares
• Automotive associations offering savings accounts through partnerships
• Automotive dealers, repair shops and supermarkets offering mortgages through partnerships
• Automotive manufacturers offering savings accounts through partnerships
• Cricket and rugby clubs offering savings accounts: penetration, operating models and partner market shares
• Estate agents offering mortgages: penetration, operating models and partner market shares
• Football clubs offering mortgages: penetration, operating models and partner market shares
• Football clubs offering savings accounts: penetration, operating models and partner market shares
• Internet, media and telecoms entities offering mortgages: penetration, op. models and partner market shares
• Internet, media and telecoms entities offering savings accs.: penetration, op. models and partner market shares
• On-line price comparison providers offering mortgages penetration, op. models and partner market shares
• On-line price comparison providers offering savings accounts through partnerships
• Retailers offering mortgages: penetration, operating models and partner market shares
• Retailers offering savings accounts: penetration, operating models and partner market shares
• Branded conglomerates offering mortgages and savings accounts through partnerships
• Loyalty schemes offering mortgages and savings accounts through partnerships