Back to Banking - Capturing retail deposits

With banks and building societies in the UK scrambling to strengthen their balance sheets, Datamonitor assesses the attractiveness of the various funding options, and concludes that retail deposits represent the best source of new capital. Five key customer segments are particularly ripe for targeting, and Datamonitor's megatrends framework is used to devise strategies for these.

Report Highlights
In October this year, key banks and building societies in the UK agreed to strengthen their balance sheets, as part of the government-led effort to ensure the stability of the financial system. Among the funding alternatives, Datamonitor's analysis shows that accessing additional funds from depositors stands out as the most attractive option.

Datamonitor has identified five key lucrative segments for banks to target. These segments are home savers, independent professional services, milestoners (people whose lives and behaviors have been affected by trigger events like marriage or children), UK resident expats and accumulators (50 to 59 year olds saving for retirement).
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Table 1: The mortgage: deposit ratio is a useful indicator of financial health 8
Table 2: Foreign expats living in Britain, by investable assets 46
Figure 1: Key sources and characteristics of each type of retail bank funding options 10
Figure 2: Interbank lending continues to come at a high cost 11
Figure 3: ING Direct: When savings don't feel so good 16
Figure 4: The number of home loans being granted in the UK has dropped dramatically 18
Figure 5: UK house prices are sharply down 20
Figure 6: The workings of the Bauspar system 22
Figure 7: Commerzbank stresses flexibility in its offering 23
Figure 8: Showing how money accumulates to build a house 24
Figure 9: Lloyds TSB recognizes that not everyone will be looking to buy 25
Figure 10: BNZ tailors home loan and business packages to suit client needs 28
Figure 11: BNZ stresses the importance of community connectivity to those working in their own business 30
Figure 12: FNB reaches out to professionals running their own businesses by providing business support tools 31
Figure 13: HSBC adds value to its services for professionals by selling professional indemnity insurance 33
Figure 14: Westpac recognizes the difficulties those running their own businesses may face when it comes to meeting their superannuation payments 34
Figure 15: There are at least 1.5 million trigger events in the UK each year 36
Figure 16: Back to banking: building personal relationships within a technological age 37
Figure 17: BNZ uses free texts to connect with customers based on their individually-defined criteria 39
Figure 18: BNP Paribas connects with people when they are beginning life together... and when it comes to an end 41
Figure 19: ABSA connects child, family and community with its FuturePlan account 42
Figure 20: OCBC combines a trust savings account with insurance features in its 'School Plan' 43
Figure 21: India and Ireland are the most common expats resident in the UK 45
Figure 22: Passport is a banking product/service from HSBC specifically aimed at expats 48
Figure 23: HSBC offers useful resources and information for expats 50
Figure 24: Société Générale shows great awareness of the lifestage complexity megatrend 51
Figure 25: The accumulators are a significant part of the population in the UK 53
Figure 26: Harris promotes a personalized pre-retirement service 55
Figure 27: UBS offers its clients a pre-retirement service packed with reassurance 56
Figure 28: Barclays Premier offers 'nest-egg' savings to reward customers for keeping their money in the bank 57
Figure 29: ING Direct offers comfort and convenience 60
Figure 30: BNZ addresses lifestage complexity and connectivity with its 'TotalMoney' program 61
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