Capgemini News

The average price of basic banking services in the 2005 report is €78, with prices between countries ranging from €25 in the Netherlands to €137 in Switzerland, which is a 1:5.5 range.

Prices differ in terms of cost for consumers depending on the level of maturity of the banking environment and the banking environment pricing model.

Bertrand Lavayssière, managing director, Global Financial Services at Capgemini, comments: “The global retail banking market changes constantly. Prices in North America declined versus last year, by 6% in the US and 1% in Canada. In the Eurozone the average price of banking services increased by 3%, roughly in line with inflation. We expect thisconvergence to continue as the effects of the common currency take hold. Central initiatives, such as the Single Euro Payments Arena (SEPA) will also bring prices closer together.”

Level of maturity of banking environment explains banking costs for consumers in Slovakia and Czech Republic is approximately 1% of GDP/capita, 2% in Poland and 3% in China whereas it is < 0.6% in more mature banking environments.

Retail banks in mature markets will move away from cost cutting to concentrate on increasing their share of wallet with high potential/high value customers over the next three years. The 2005 World Retail Banking Report from Capgemini, ING and the European Financial Management and Marketing Association (EFMA) reveals that banks in mature markets recognise that 80% of their future growth revenue will come from existing clients and only 20% from new client acquisition.

Hans Verkoren, Global Head of ING Direct and Member of the Executive Board of ING Group said:”As a financial services company with a global banking presence, we are pleased to be once again supporting Capgemini’s World Retail Banking Report. ING’s involvement in the publication of this annual in-depth study of global retail banking reinforces our position as a global player in this field, and the report’s insight and recommendations will assist our employees all over the world in their day-to-day business in building relationships with our clients.”

Report interviews found that while over 80% of banks are currently developing a relationship strategy for high potential customers, less than 10% believe they have successfully implemented structured approaches covering the full scope of retail banking.

The report recommends that in addition to adapting pricing strategies for high potential/high value customers banks should adopt a structured relationship approach that moves all of its business components to a client perspective in an aligned manner, including:

1. Client understanding and segmentation

2. Product and service offerings

3. Organisational structure

4. Ways of working

5. IT and tools

6. Performance management

It also identifies the fact that banks need to take a mixed approach to providing channels to high value customers – and not assume that personal service is always preferred to selfservice.

For banks, the answer is to build a relationship approach with those clients, so that they buy as many relevant services from the bank as possible.  Bertrand Lavayssière continues: “Clients fit into different buying categories: price-focused; expert comparatists (who look at price but also at other product characteristics); loyal to a brand; and followers, who will do whatever the majority, friends, neighbours or family members do. A relationship approach only matters to clients who are either expert comparitists or loyal to a brand. But banks that have focused on this approach for high value/high potential customers have already secured excellent results.”

About the Capgemini Group

Capgemini, one of the world’s foremost providers of Consulting, Technology and Outsourcing services, reported 2004 global revenues of 6,291 million euros and employs approximately 60,000 people worldwide. For more information, please visit: www.capgemini.com