Affinity & Partnership Marketing in Credit Cards and Retail Lending in Italy

Content

• 1.0 Introduction
  • Finaccord
  • PartnerBASE
  • Rationale
  • Methodology
  • Errors, omissions and limit of liability
• 2.0 Strategies For Success
  • Introduction
  • Why consider affinity and partnership marketing?
  • Affinity and partnership marketing is not a new concept
  • Proprietary distribution channels present limited organic growth potential
  • Not all schemes work but some have been hugely successful
  • Transient relationships mean that incumbents can sometimes be unseated
  • What makes for a successful relationship?
  • Successful affinity and partnership marketing schemes must create three sets of winners
  • All parties need to benefit but the customer remains king
  • Judicious partner selection is a prerequisite for establishing effective schemes
  • Brand or ideological fit can be as important as more concrete selection criteria
  • Strategies for effective affinity and partnership marketing
  • Optimum results will be achievable only if all elements of the marketing mix are attended to
  • Affinity and partnership marketing: the way ahead
  • Financial institutions must emerge from their product silos to create more exciting packages
  • Injecting some fun into financial services will stimulate affinity marketing schemes
  • The future prospects for affinity and partnership marketing should be bright
• 3.0 Market Overview
  • Introduction
  • Overview of the credit card market in Italy
  • Credit and charge cards issued in the Italian market reach 21.8m in 2002
  • Overview of the mortgage and personal lending markets in Italy
  • All forms of consumer lending are advancing at double digit growth rates as a culture for consumer borrowing develops from a low base
  • Overview of affinity and partnership marketing in Italy
  • Affinity and partnership marketing schemes segmented by financial product
  • Over 2,200 affinity and partner. schemes break down relatively evenly by financial product
  • Affinity and partnership marketing schemes segmented by type of partner
  • Financial institutions dominate the distribution of consumer financial services in Italy
  • Affinity and partnership marketing in Italy: credit cards and retail lending
  • Schemes segmented by type of product
  • Credit card schemes account for almost 50% of those identified
  • Schemes segmented by type of partner
  • Credit cards dominate schemes targeted at the affinity segment
  • Schemes segmented by competitor
  • Competitive structure varies by product
  • UniCredito Italiano, through Abbey National Bank, and Banca Woolwich lead in mortgages
  • The market for loan finance partnerships is highly fragmented
  • Credit card partnerships segment between bank and non-bank relationships
• 4.0 Affinity Groups
  • 4.1 Charities
    • Introduction
    • Charity involvement in affinity marketing of financial services is currently limited
    • Credit cards
    • Concerns over low card usage impede growth of charity credit cards although ethical bank Banca Etica has established itself as a leader in the field
  • 4.2 Leisure organisations
    • Introduction
    • The CRAL are increasingly involved in arranging discounts for their members with several having established agreements for mortgages and consumer credit
    • Mortgages
    • 36% of leisure organisations surveyed offer mortgages to their members
    • Personal loans / consumer financ while consumer finance is offered by as many as 48% of leisure organisations
  • 4.3 Professional associations
    • Introduction
    • Professional services have limited involvement in affinity financial services
    • Credit cards
    • American Express leads the field in professional association credit cards
  • 4.4 Sports organisations
    • Introduction
    • Sports organisations offer limited prospects at present but could develop in future
    • Credit cards
    • Just 6.5% of sports organisations currently offer credit cards
  • 4.5 Trade unions
    • Introduction
    • CGIL and CISL dominate the trade union affinity marketing landscape in Italy which means that Unipol and Union Vita enjoy strong positions in this segment
    • Mortgages
    • Few partnerships are visible outside of the main CGIL and CISL deals either for mortgages
    • Personal loans / consumer financ or for personal loans / consumer finance
    • Credit card while affinity credit cards involving trade unions in Italy are virtually unknown
• 5.0 Financial Partners
  • 5.1 Banks
    • Introduction
    • Mortgages
    • Over 15% of banks offering residential mortgages do so through partnerships
    • Personal loans / consumer finance
    • A requirement for unsecured lending expertise results in personal lending partnerships
    • Credit cards
    • Over 75% of banks report offering American Express and Diners Club
  • 5.2 Casse di previdenza
    • Introduction
    • Casse di previdenza broaden their activity into new areas
    • Mortgages
    • Banca Popolare di Sondrio has focused on creating mortgage partnerships in this area
    • Personal loans / consumer finance
    • Few casse di previdenza offer personal loans to their professional groups
    • Credit card and fewer still credit cards
  • 5.3 Financial networks
    • Introduction
    • The SIM sector has been subject to substantial rationalisation in recent years
    • Mortgages
    • Most financial networks offering mortgages do so through their parent bank
    • Personal loans / consumer finance
    • Few financial networks offer personal lending facilities to their customers
    • Credit cards
    • CartaSi credit cards are most frequently distributed by financial networks
  • 5.4 Insurers
    • Introduction
    • Mortgages
    • Few insurers leverage their agency networks in order to distribute mortgages
    • Personal loans / consumer financ and insurer activity in personal loan distribution is similarly limited
    • Credit card although co-branded cards issued in conjunction with insurers are more in evidence
  • 5.5 Specialised lenders
    • Introduction
    • Specialised lenders are a diverse category
    • Mortgages
    • Some lenders specialising in 'cessione del quinto' loans offer morts. through partnerships
    • Personal loans / consumer financ and some require external sources of funding to operate in the personal lending market
    • Credit cards
    • Barclaycard establishes agreements with Forus Finanziaria and Kevios for card distribution
• 6.0 Non-Financial Partners
  • 6.1 Automotive dealers
    • Introduction
    • Italy's automotive dealer sector is highly fragmented
    • Provision of financial services is crucial to the profitability of automotive dealers
    • Consumer finance
    • Numerous lenders, captive and independent, compete for automotive dealer partnerships
  • 6.2 Automotive manufacturers
    • Introduction
    • Consumer finance
    • The majority of automotive manufacturer brands possess their own captive finance entities while Findomestic leads the market for partnerships among those that do not
    • Credit cards
    • Over one quarter of automotive brands surveyed issue an affinity credit card
  • 6.3 Estate agents
    • Introduction
    • All estate agents have established partnerships for mortgages, a majority with credit brokers
    • Mortgages
  • 6.4 Football clubs
    • Introduction
    • Football clubs become more adept in affinity financial services
    • Personal loans / consumer finance
    • The provision of consumer finance through football clubs is a primarily local phenomenon
    • Credit card although co-branded credit cards issued through football clubs are more prevalent
  • 6.5 Retailers
    • Introduction
    • Retailing markets in Italy are fragmented by European standards with the top four retailing groups collectively accounting for less than 10% of total sales although the Bersani legislation removed many licensing requirements and restrictions
    • Carrefour and Mulliez-Auchan lead the foreign conquest of Italy
    • Retailer involvement in fin. services is concentrated in consumer finance and credit cards
    • Personal loans / consumer finance
    • Nearly one third of retailers surveyed offer consumer finance to customers with Agos Itafinco accounting for the highest proportion of major relationships
    • Credit cards
    • Retailer provision rates for credit cards slightly lag those for consumer finance
    • Findomestic lays claim to the highest number partnerships with major retailers significant competition being provided by an array of other card issuing entities
  • 6.6 Travel companies
    • Introduction
    • Travel firms have significant involvement in both consumer finance and co-branded cards
    • Personal loans / consumer finance
    • Consumer finance is offered to consumers by nearly one quarter of travel companies
    • Credit cards
    • Clarima has established several notable partnerships with travel firms since its launch
  • 6.7 Utilities
    • Introduction
    • Involvement of Italian utilities in financial services is currently embryonic
  • 6.8 Other non-financial organisations
    • Introduction
• Graphics / Tables
  • The affinity and partnership marketing universe
  • Entities contacted for the research, segmented by type
  • The three winners in successful affinity and partnership marketing schemes
  • How to identify an effective partner in affinity and partnership marketing
  • The virtuous circle for effective affinity and partnership marketing
  • Most affinity and partnership marketing schemes conform to a 'product silo' approach
  • A new generation of affinity and partnership marketing schemes must deliver a more compelling proposition
  • Number of credit and charge cards in issue and per capita in Italy, 1998-2002
  • Size and growth of the retail lending market in Italy, 1998-2002
  • Affinity and partnership marketing schemes in cons. financial services in Italy: segmentation by type of product
  • Affinity and partnership marketing schemes in financial services in Italy: segmentation by type of partner
  • Affinity and partner. marketing schemes for credit cards and retail lending in Italy: segment. by type of product
  • Affinity and partner. marketing schemes for credit cards and retail lending in Italy: segment. by type of partner
  • Affinity and partner. marketing schemes for credit cards and retail lending in Italy: segmentation by competitor
  • Charities in Italy offering financial services other than credit cards
  • Charities offering credit cards in Italy: penetration, operating models and partner market shares
  • Leisure organisations offering mortgages in Italy: penetration, operating models and partner market shares
  • Leisure orgs. offering personal loans / cons. finance in Italy: penetration, op. models and partner market shares
  • Professional assoc. offering credit cards in Italy: penetration, operating models and partner market shares
  • Sports organisations offering credit cards in Italy: penetration, operating models and partner market shares
  • Trade unions offering mortgages in Italy: penetration, operating models and partner market shares
  • Trade unions offering personal loans / cons. finance in Italy: pen., op. models and partner market shares
  • Banks offering mortgages in Italy: penetration, operating models and partner market shares
  • Banks offering personal loans / cons. finance in Italy: penetration, op. models and partner market shares
  • Banks offering cards in Italy: rel. imp. of Am. Ex., Bankam., CartaSi, Diners Club and Findom. as partners
  • Casse di previdenza offering mortgages in Italy: penetration, operating models and partner market shares
  • Casse di preV. offering personal loans / cons. finance in Italy: pen., op. models and partner mark. shares
  • Casse di previdenza offering credit cards in Italy: penetration, operating models and partner market shares
  • Financial networks offering mortgages in Italy: penetration, operating models and partner market shares
  • Financial networks offering personal loans / consumer finance in Italy: penetration and operating models
  • Financial networks offering credit cards in Italy: penetration, operating models and partner market shares
  • Insurers offering mortgages in Italy: penetration, operating models and partner market shares
  • Insurers offering personal loans / cons. finance in Italy: penetration, op. models and partner market shares
  • Insurers offering credit cards in Italy: penetration, operating models and partner market shares
  • Specialised lenders offering mortgages in Italy: penetration, operating models and partner market shares
  • Specialised lenders offering pers. loans / cons. finance in Italy: pen. and op. models and partner market shares
  • Specialised lenders offering credit cards in Italy: penetration, operating models and partner market shares
  • Relationships between major automotive dealership groups and automotive manufacturers, autumn 2003
  • Automotive dealerships offering consumer finance in Italy: penetration and operating models
  • Automotive manufacturers offering consumer finance in Italy: penetration and operating models
  • Automotive manufacturers offering credit cards in Italy: penetration, op. models and partner market shares
  • Estate agents offering mortgages in Italy: penetration and operating models
  • Football clubs offering pers. loans / cons. finance in Italy: penetration, op. models and partner market shares
  • Football clubs offering credit cards in Italy: penetration, operating models and partner market shares
  • Retailers in Italy offering financial services other than consumer finance and credit cards
  • Retailers offering personal loans / cons. finance in Italy: penetration, op. models and partner market shares
  • Retailers offering credit cards in Italy: penetration, operating models and partner market shares
  • Travel cos.offering personal loans / cons. finance in Italy: penetration, op. models and partner market shares
  • Travel companies offering credit cards in Italy: penetration, operating models and partner market shares
  • Utilities in Italy offering financial services
  • Other non-financial organisations in Italy offering financial services