Affinity and Partnership Marketing Strategies in Credit Cards and Banking in Europe

Finaccord's report entitled Affinity and Partnership Marketing Strategies in Credit Cards and Banking in Europe is a unique research publication dedicated to a broad investigation of affinity financial services in Europe with the focus on credit cards and banking services. It draws on the findings of around 100 interviews carried out over a 24-month period from September 2003 to August 2005 in order to assess the development of affinity and partnership marketing strategies in European credit cards and banking and to highlight examples of both banking institutions and partner organisations that embody best practice in this field. It covers credit cards and other consumer banking sectors in equal measure and represents the most comprehensive source of intelligence on this important topic. In an increasingly mature market for credit cards and retail banking in Europe, initiatives in affinity and partnership marketing represent some of the best opportunities for business growth in both domestic and international markets. Indeed, ultimately, affinity and partnership marketing strategy is a fundamental issue for all card issuers and banking institutions given its potential to deliver superior revenue growth. As such, Affinity and Partnership Marketing Strategies in Credit Cards and Banking in Europe delivers mission-critical insights allowing you to identify viable opportunities, learn from best demonstrated practice and to influence your own organisation's partnering strategy accordingly.

• 0.0 EXECUTIVE SUMMARY
  • Affinity and partnership marketing represents a viable alternative to organic growth
  • with significant volumes of activity in this field being visible in recent months
  • indicating that it is a key issue for all financial services organisations
  • Affinity and co-branded credit cards continue to outgrow the wider market
  • and are increasingly core to the strategies of card issuers in many European countries
  • Card issuers show greater innovation in their approach to affinity and co-branding programs
  • although wise partner selection remains a key issue
  • Viable partner categories for affinity mktg. programs extend to a range of different organisations
  • The UK's AA sets a precedent for the financial services potential of automotive associations
  • Barclaycard's English FA Premiership credit card is the world's largest football-related aff. card
  • Loyalty schemes can be leveraged as a distribution channel by financial services institutions
  • Media and Internet entities constitute a relatively new class of partner for banks and insurers
  • Over 25% of professional assocs. in Europe offer three or more financial services to members
  • Tesco is Europe's leader in retailer financial services, generating profits of 202m in 2004
  • Financial services firms are interacting with telecoms companies in a variety of ways
  • Many trade unions are seeking to broaden the financial benefits provided to members
  • The revolution in consumer travel gives rise to a new breed of affinity marketing opportunities
  • Affinity financial services can boost customer loyalty for utilities companies
  • Affinity partners offering access to grey' market customers are of increasing value
  • Worksite marketing is at different stages of development in different territories in Europe
  • although it can be expected to grow as employers improve staff benefits provision
• 1.0 INTRODUCTION
  • Finaccord
  • What is this report about?
  • The concept of affinity financial services is broad yet relevant to many financial insts
  • What is the rationale?
  • Five key factors underpin the rationale for a report about affinity financial services in Europe
  • How is the report structured?
  • What is the methodology?
  • Finaccord has completed over 100 primary interviews for this report
  • Errors, omissions and limit of liability
• 2.0 EVENTS AND IMPLICATIONS: TWO YEARS REVIEWED
  • Introduction
  • Affinity and partnership strategies in credit cards and banking
  • August 2003
  • Hypovereinsbank kicks off relationship with Bayern Munich
  • Lloyds TSB launches electricity, gas and telephone services
  • Caja de Madrid signs on-line auction deal with eBay
  • Citibank delight at Turkish Post Office deal
  • September 2003
  • AIB wise to establish small business link with Sage
  • La Poste plans threaten to shake up French banking
  • Visa establishes partnership with International Paralympic Committee
  • October 2003
  • Bank of Ireland puts seal on UK Post Office joint venture
  • Amex goes Dutch with KLM cards strategic alliance
  • AIB rolls out new education sector affinity card deal
  • Lloyds TSB extends utility offering to broadband service
  • November 2003
  • BBVA forges Italian consumer credit joint venture with BNL
  • GE Capital in Spanish lending pact with Banco Sabadell
  • Cofidis firms up lending tie with Crdit Mutuel unit
  • ASN Bank and Body Shop launch Dutch ethical alliance
  • Amex, Club Med and Finaref in three-way payment card deal
  • Gonzlez: banks to diversify into non-financial services
  • La Caixa creates dedicated micro-lending company
  • December 2003
  • Banca Intesa and TIM form mobile banking partnership
  • Spain's Santander in link with aeronautical engineers
  • La Caixa scores hole in one with golf association deal
  • Socit Gnrale sets up Russian consumer finance venture
  • January 2004
  • Amex announces three major new partnerships
  • HSBC / international currency cards
  • MBNA / Amex branded cards
  • SN Brussels Airlines / Alpha Card link
  • Bipielle bets on card deal with Italian gambling network
  • Agos Itafinco and CESVI partner in charity card deal
  • February 2004
  • Cofinoga ties up joint venture with Quelle SAS in France
  • Caja de Madrid creates healthcare finance initiative
  • ABN AMRO and MasterCard strike up global alliance
  • Visa International confirms Olympic sponsorship deal
  • Crdit Agricole forges link with Danish electricals retailer
  • La Caixa and FC Barcelona in new affinity card launch
  • March 2004
  • John Lewis and HSBC introduce retailer credit card in UK
  • AIB creates affinity card tie with Dublin City University
  • HBOS launches partnership with housing association
  • Co-Op Bank reaches ground-breaking agreement with FSB
  • April 2004
  • Banca Intesa extends student loan deals to two new partners
  • Banco Sabadell and GE Consumer Finance cement joint venture
  • Deutsche Postbank launches football-related payment card
  • Virgin Money creates lastminute.com affinity credit card
  • La Caixa in affinity card deal with chamber of commerce
  • May 2004
  • Caja de Madrid creates credit card discount with Galp
  • La Caixa kicks off two new micro-lending partnerships
  • June 2004
  • Comfort Card launches consumer loan for Tchibo
  • Fiditalia gains two new personal finance partnerships
  • AEGON and Albert Heijn halt savings account initiative
  • Santander Central Hispano initiates new affinity deals
  • Visa International expands Delta Air Lines alliance
  • July 2004
  • Cetelem takes 50% stake in Russian consumer credit firm
  • HSBC acquires Marks & Spencer financial services arm
  • August 2004
  • CreditPlus Bank links with designer furniture specialist
  • ABN AMRO extends sponsorship contract with Ajax
  • GECF to acquire Russian consumer lending specialist
  • September 2004
  • Postbank launches new consumer credit distribution deals
  • BBVA's Diez brand doubles bank's credit card growth rate
  • GE Capital ties up Irish consumer credit deal with Hibernian
  • BNP Paribas teams up with HP for Micro-Portables tudiant
  • Volkswagen Bank launches dealer account in France
  • October 2004
  • CreditPlus Bank ties up computer finance link with Sony
  • MBNA discloses latest affinity card developments
  • Tesco Personal Finance launches retailer mortgages
  • Globus tests retailer card with Cetelem Bank in Germany
  • Banque Accord unit launches MasterCard retailer card in Italy
  • Nordea, RBoS and Socit Gnrale in three-way alliance
  • November 2004
  • SocGen buy yields 30-year finance deal with Otto Group
  • Banca Intesa links with Vodafone for mobile banking
  • Spanish banks unite to launch money transmission service
  • Dresdner Bank and Cetelem tighten German finance link
  • Comfort Card and SNS Bank unite for cash access solution
  • December 2004
  • Deutsche Postbank ties up loan deal with Wstenrot
  • HBOS charity cards surge ahead during 2004
  • La Caixa and Microsoft agree to promote Cybertarjeta
  • Caja de Madrid deal with Mapfre allows low-cost expansion
  • Bankinter works with Fundacin CNSE on behalf of deaf clients
  • Grupo Santander finalises three new university accords
  • January 2005
  • Bankinter and Vodafone collaborate for mobile broking
  • AXA links with BHW to offer home loan products in Germany
  • February 2005
  • Barclays launches multi-tied financial planning service
  • Barclaycard and BSkyB launch interactive credit card in the UK
  • March 2005
  • Santander Consumer Hispamer ties with car dealer federation
  • Postbank and T-Mobile innovate in mobile banking
  • SocGen expands Russian consumer finance activity
  • MasterCard expand affinity offers for premium cardholders
  • BBVA establishes two new affinity marketing deals
  • BHW and MLP strike up mortgage distribution initiative
  • Reale Mutua and Fiditalia link for affinity credit card
  • April 2005
  • Amex initiates UK cards relationship with Lloyds TSB
  • May 2005
  • BBVA initiates three new affinity ventures in Spain
  • with SCH replying with a trio of affinity deals of its own
  • BHW and Bild T-Online collaborate for mortgage savings
  • American Express reveals card issuing deal with OTP Bank
  • Peoplevalue expands into worksite sales of mortgages
  • ZAO Citibank ties with Russian mobile operator for co-brand
  • New Bankinter initiatives seek to grow mobile banking
  • Alliance & Leicester commercial affinity completes first year
  • ABN AMRO begins Internet banking trial with MSN
  • GECF ties up with CAM for consumer finance joint venture
  • Fiditalia acquisition provides worksite lending access
  • Barclays launches Select Choice planning service
  • June 2005
  • BBVA forges affinity distribution tie with First Choice Holidays
  • Barclays increases non-life insurance sales by over 100%
  • Hypovereinsbank introduces Golf Card to Germany
  • July 2005
  • Raiffeisen Bank creates Romanian finance joint venture
  • Citibank launches first charity affinity card in Portugal
• 3.0 MARKET PROFILES
  • Introduction
  • Benelux
  • Affinity and co-branding activity is set to become more important in both Belgium
  • and the Netherlands
  • The small size of many affinity partners can be a problem in Belgium
  • although program profitability ultimately depends upon its structure
  • Affinity cards involving not-for-profit partners are infrequent in the Netherlands
  • However, a broad variety of schemes have achieved success in both countries
  • Encouragement of a credit card culture will pave the way for affinity programs
  • although new entrants would find the going tough in both markets
  • France
  • Retailers drive the development of private label card schemes in France
  • with other categories of partner generally assuming secondary importance
  • although Crdit Cooperatif is an important protagonist in the not-for-profit sector
  • Nonetheless, the concept of partnership remains central to future development
  • even if France remains a sticky wicket' for new entrants
  • CASE STUDY - Banque Sofinco: developing international expertise
  • A multi-channel consumer credit expert with an increasingly international profile
  • developing rapidly through domestic consolidation and new partnerships
  • some with the potential to assume pan-European dimensions
  • Banque Sofinco classifies its expertise in five distinct segments
  • CASE STUDY - Cetelem: lending specialist conquers new markets
  • International new business over 50% of the 2003 total
  • Overseas companies are charged with tough profitability targets
  • Partnership strategy is key to international growth
  • Relationships with Carrefour and Dell stand out as a result of multi-country status
  • An adaptable approach to consumer finance characterises Cetelem's proposition
  • CASE STUDY - Cofinoga: prolific partnering spurs international growth
  • Leveraging expertise in CRM, direct marketing and credit risk management
  • through a series of commercial partnerships
  • Cofinoga also seeks partnerships with other financial institutions
  • CASE STUDY - Crdit Social des Fonctionnaires: partnerships pay
  • The company distributes through a growing universe of partner organisations
  • Partnership-based distribution is a key driver of the company's growth
  • which is underpinned by three differentiating characteristics
  • The company will continue to develop both its product range and partnerships
  • CASE STUDY - Socit Gnrale: banking on pan-European expansion
  • The Division has followed its clients' increasingly pan-European dimensions
  • to develop an array of specialised financial services activities
  • which are growing at a particularly fast rate in Central and Eastern Europe
  • and have been buoyed by two notable recent joint ventures
  • Germany
  • Affinity / co-branding schemes are central to credit card development in Germany
  • with major retailers playing a particularly important role as partners
  • although enthusiasm for not-for-profit and sports club partners is more muted
  • Insurance companies can also be viable co-branding partners
  • New entrants are likely to be attracted to the German affinity / co-branded market
  • CASE STUDY - BDK: combating the status quo in German car finance
  • BDK initiates partnerships with Pssl and Ssangyong in 2004
  • BDK is seeking to challenge the dominance of the captives and CC Bank
  • by means of innovative product development and marketing approaches
  • in the domain of insurance as well as finance and leasing schemes
  • CASE STUDY - BHW: building durable distribution relationships
  • BHW has undertaken substantial diversification over the last two decades
  • and today possesses 4.7 million customers in Germany and overseas
  • In Germany, BHW benefits from both established and new distribution partnerships
  • processing mortgage lending for third parties through the BHW KreditCenter
  • and building a strong link with AXA's German insurance business
  • helping the group to achieve record growth and profitability targets
  • CASE STUDY - PAYBACK: lessons in loyalty from German pioneer
  • PAYBACK is the largest loyalty scheme in Europe
  • as a consequence of its multi-sector, multi-media profile
  • including the participation of as many as 12 partners
  • PAYBACK partners need to rank among the top three in their respective markets
  • The PAYBACK Visa card has reached 200,000 cards in issue
  • CASE STUDY - Deutsche Postbank: profiting from partnerships
  • Expansion into retail lending is a strategic priority for Postbank
  • Partnerships are central to the bank's on-going distribution strategy
  • Early results hint at the success of Deutsche Postbank's football-related credit card
  • although transactional usage of the mobile banking service is limited thus far
  • DSL Bank's business model is totally geared up to partnership-based distribution
  • Deutsche Postbank increases its market share across all retail lending categories
  • Italy
  • Both indigenous banks and overseas entrants drive the credit card market
  • Performance of affinity and co-branded cards varies significantly
  • High potential for co-branded cards exists in sectors other than retailing
  • Selective affinity and co-branding initiatives will continue in future
  • While a growth market, Italy does not necessarily represent fertile territory for new entrants
  • CASE STUDY - IntesaBridge: helping students to mind the gap
  • Provision of credit to students is something of a rarity in Italy
  • although Banca Intesa is challenging the status quo through Progetto Universit
  • IntesaBridge is valued by both students and universities
  • and provides an innovative driver of growth for Banca Intesa itself
  • CASE STUDY - Bipielle Group: placing a bet on Sisal network
  • Alliance with Sisal provides access to new groups of customers
  • The Kalibra card is available in both disposable and re-loadable formats
  • Sisal's Estrema network is being used to guarantee security and transparency
  • The Bipielle - Sisal relationship began with the purchase of an equity stake
  • The Sisal network can be used to distribute standardised financial products
  • CASE STUDY - Fiditalia / I Granai: leveraging strength in numbers
  • The card should be of benefit to all retailers within the I Granai shopping centre
  • and is clearly more practical than individual point-of-sale finance facilities
  • The card paves the way for the development of retailer-specific loyalty programs
  • and is without precedent in the Italian market
  • albeit there are several difficulties associated with the program's development
  • The scheme's success is being measured by criteria other than number of cards issued
  • Scandinavia
  • Denmark: affinity and co-branding deals held back by DanCard's dominance
  • Finland: loyalty initiatives to boost affinity and co-branding above the 10% level?
  • Norway: potential remains for niche products in an otherwise saturated market
  • Sweden: future co-branding programs may possess international characteristics
  • CASE STUDY - Nordea Finans / SAS Corporate Card: simplifying business travel
  • An initiative to increase customer loyalty and reduce sales and distribution costs
  • helping Nordic companies to simplify their business travel requirements
  • The card is characterised by a number of revolutionary features
  • and has performed strongly since launch in spite of the tough Nordic business travel mkt
  • Spain
  • Co-branded programs, in particular, stimulate the payment card market in Spain
  • with the distributors often providing much of the marketing impetus
  • Successful affinity and co-branding partners tend to share common characteristics
  • although scheme profitability tends to vary from program to program
  • IKEA, RENFE and Unin Fenosa rank among the most successful partners
  • Affinity and co-branded card programs in Spain face a mixed future
  • with incumbents presenting barriers to aspiring new entrants
  • CASE STUDY - Iberia: cards generate double the national average in activity rates
  • The co-branded card tightens the link between the airline and its card-carrying passengers
  • with issuance having reached 20% of Iberia's loyalty program customer base
  • CASE STUDY - La Caixa: micro-credits marginalise sub-prime lenders
  • The micro-credit program focuses on individuals aspiring to self-employment
  • using social assistance entities as the distribution conduit
  • Exclusion from the banking system is less common in Spain than in the UK
  • although the fast-growing immigrant population is vulnerable in this respect
  • Excessive indebtedness is more likely to be a problem than outright exclusion
  • although a residual market for sub-prime finance continues to exist
  • UK
  • Excluding motor finance captives and joint ventures, over 80 orgs.are active in this sector
  • Not-for-profit affinity groups: affinity credit cards are more widespread than personal loans
  • Financial institutions: third party distribution remains a key issue for banks and building socs
  • Commercial entities: dynamics in credit cards and personal loans vary from sector to sector
  • Card issuers will focus increasingly on the top 10% of affinity and co-branding programs
  • a trend liable to be replicated for affinity and partner. marketing schemes for personal loans
  • CASE STUDY - Co-operative Financial Services: developing new affinity models
  • An integrated financial services organisation since April 2002
  • seeking to take advantage of cross-selling activities
  • A shareholding in Unity Trust Bank also offers a useful outlet for development
  • The bank is active in affinity credit cards and white-labelled lending
  • and remains on the look-out for new relationships, especially for direct lending
  • CASE STUDY - the GM Card: an enduring automotive affinity card
  • The GM Card remains among the richest credit card reward schemes in the UK
  • having passed its tenth anniversary in 2004
  • The long-term nature of the reward scheme is key to the GM Card's success
  • as are the multi-media marketing and communications program
  • and increasing use of customer relationship management and data mining techniques
  • The GM Card plays a role in 20% of Vauxhall's private car purchases in the UK
  • CASE STUDIES - Oxfam and WWF: successful affinity credit card strategies
  • Both charities have benefited from affinity cards for over ten years
  • with 40,000 and 100,000 cards issued by Oxfam and the WWF, respectively
  • MBNA complies with the WWF's strict ethical criteria
  • For Oxfam, the affinity card provides a flexible source of income
  • The WWF, too, allocates funds across a range of its environmental initiatives
  • CASE STUDY - The Funding Corporation: expertise in affinity lending
  • A business plan envisaging the creation of a portfolio of 32 lending businesses
  • with affinity lending currently the largest single activity
  • Growth is being achieved as a consequence of a variety of factors
  • although this will be restricted to the UK market for the foreseeable future
  • CASE STUDY - Morgan Stanley / buyandfly!: re-invigorating loyalty
  • The partnership between Morgan Stanley and Landround met mutual needs
  • with the co-branded card subject to a three-pronged launch since May 2004
  • The card is focused on a clearly identifiable customer group
  • and has achieved initial results ahead of the original expectations
  • with the result that the program will be subject to further enhancement in future
  • Central & Eastern Europe
  • Affinity and co-branding programs boost growth in Central and Eastern Europe
  • with region-specific obstacles becoming increasingly less relevant
  • Insurance companies can make for particularly effective co-branding partners
  • as can mobile operators as exemplified by the Citibank / Westel program
  • and Bank Austria Creditanstalt's deals in the Czech Republic and Hungary
  • RZB Group is rolling out a regional initiative across the entire region
  • Affinity and co-branding represents an enduring strategy for the region's issuers
• 4.0 TRENDS AND OPPORTUNITIES IN MAJOR PARTNER CATEGORIES
  • Introduction
  • Automotive associations
  • Local automotive associations compete against the international organisations
  • many of which are expanding into broader financial services
  • following the successful lead established by the UK's Automobile Association
  • The RAC, too, is seeking to grow its share of financial services intermediation
  • an objective shared by Germany's ADAC although legal impediments remain
  • Portugal's ACP has partnered with Banco BPI for growth in the banking market
  • The RAC is seeking to triple its portfolio of insurance customers
  • CASE STUDY - Autoclub Repsol: a revolution in Spanish motoring
  • The launch of Autoclub Repsol was assisted by a substantial existing infrastructure
  • and underpinned by three fundamental customer propositions
  • Autoclub Repsol utilises three main types of distribution channel
  • helping it to reach over 1.8 million customers as at May 2005
  • Affinity marketing will support double digit growth for the foreseeable future
  • Football clubs
  • Credit cards are the most commonly marketed football-related financial product
  • Savings and lending products enjoy greater popularity than insurance
  • Five UK clubs stand out for their major involvement in affinity financial services
  • Many European clubs are interested in branding out into affinity finance
  • Bayern Munich's activities may pave the way for affinity development in Germany
  • Barclaycard is using the Manchester United brand in international markets
  • Manchester United seeks to convert fans to customers
  • Southampton FC takes a hands-on approach to affinity financial services
  • with the result that affinity insurance policies are set to overtake affinity cards
  • Intelligent Finance adopts an alternative approach to affinity financial services
  • European football clubs set to increase affinity finance activity
  • CASE STUDY - Manchester United: reaching goals in global markets
  • Man. United has the most active involvement in marketing financial services to supporters
  • Rapid growth has been achieved in the number of affinity cards issued overseas
  • by means of the link with Barclaycard and suitable local partners
  • The club has exceeded expectations from marketing mortgages in the UK
  • Further development of affinity finance can be anticipated in both the UK and abroad
  • Loyalty schemes
  • Germany plays host to Europe's largest multi-partner loyalty schemes
  • The HappyDigits program has added several important partners since launch
  • and has now accumulated 24 million cards in the market
  • PAYBACK cardholders redeem around 6 million in points each month
  • HappyDigits constitutes MasterCard's largest co-branded program in Germany
  • although most card expenditure remains within the KarstadtQuelle Group
  • In future, PAYBACK expects to add new partners in selected sectors
  • CASE STUDY - ipoints: a pioneer in Internet-based loyalty in the UK
  • ipoints has amassed over 60 partners and 15 reward categories since its launch in 2000
  • and laid claim to over one million membs. by mid-2005 generating 1.5 million in revenues
  • ipoints wishes to expand its activity in affinity financial services beyond its co-branded card
  • believing that the relatively youthful profile of its members is an attractive feature
  • CASE STUDY - Maximiles: beating off the competition in the French market
  • Maximiles lays claim to slightly more than one million members
  • and is interested in expanding its roster of partners drawn from the financial services sector
  • Funds raised from an IPO will help it to exploit rapid growth in the French on-line market
  • with opportunities for expansion also being visible in Italy and Spain
  • Media / Internet entities
  • Media and Internet partners demonstrate increasing interest in financial services
  • Affinity marketing through media entities is motivated by multiple factors
  • depending upon the type of media entity in question
  • The Telegraph Group affinity proposition has grown significantly in recent years
  • and financial services constitute the core element of the over50s.com concept
  • and outbound telesales is increasingly important to Candis
  • Media and Internet entities are endowed with a number of key advantages
  • including a brand inspiring a high degree of trust in the case of the Telegraph
  • although there are also several drawbacks specific to this affinity category
  • Personal non-life policies have proved most successful for Candis and over50s.com
  • while the Telegraph's retirement services proposition is its greatest revenue earner
  • The Telegraph Group secures around 10% of its net profit from affinity finance
  • over50s.com will seek to add value to its financial services proposition
  • Candis will work to combat the negative effects of a new regulatory environment
  • Professional associations
  • Finaccord's research covers 440 professional associations in 10 countries
  • Associations in the UK are most likely to have developed affinity programs
  • with the most popular product, Europe-wide, being professional liability insurance
  • More than 50% of professional associations offer no financial services whatsoever
  • Austria
  • Belgium
  • France
  • Germany
  • Ireland
  • Italy
  • Netherlands
  • Spain
  • Switzerland
  • UK
  • Over a quarter of associations will seek to expand the financial benefits offered
  • CASE STUDY - Association of Secondary Teachers in Ireland: future expansion likely
  • Five main factors motivate the provision of affinity financial services
  • with teachers sharing two particular circumstances that makes the concept particularly apt
  • CASE STUDY - BMA Services: financial prescriptions for doctors
  • The British Medical Association cedes ownership to Wesleyan in 2002
  • allowing the insurer to build on its earlier purchase of Medical Sickness
  • Depolarisation is a key issue for the future direction of BMA Services
  • as Wesleyan seeks to raise its exposure to suitable affinity relationships
  • CASE STUDY - Hartmannbund: financial benefits driven by three main motivators
  • The association is active across the full spectrum of affinity financial services
  • and has also established a medical equipment and car leasing service for members
  • The partnership with Deutscher rzteversicherung is proving to be especially successful
  • CASE STUDY - Irish Nursing Organisation: increasingly aware of own value to partners
  • The INO seeks to leverage the collective buying power of its 30,000 members
  • and is particularly keen on developing a more competitive mortgage proposition
  • Affinity marketing partners need to be well-established with strong market visibility
  • and are expected to take responsibility for all aspects of the marketing program
  • Financial and other benefits will become an increasingly integral aspect of membership
  • CASE STUDY - MLP: gradually graduating overseas
  • Profiting from the provision of high quality advice-led services
  • MLP should capitalise on crises in retirement savings and healthcare in Germany
  • Its unique partnership-based business model is fundamental to its success
  • MLP's focus on the graduate affinity group should pay long-term dividends
  • Staffing policy envisages graduates serving the needs of other graduates
  • MLP's goals include the transferral of its business model into international markets
  • MLP is planning for prudent growth in 2003 and beyond
  • CASE STUDY - Nederlandse Orde van Advocaten: organising collect. bargain. power
  • Balie Plus was created in 1997 to serve the 85% of members who are small businesses
  • and is achieving take-up rates in the region of 30% for non-compulsory financial products
  • CASE STUDY - Organizacin de Profes. y Autnomos: take-up rates approach 70%
  • The OPA has entered into affinity partnerships with a variety of financial institutions
  • as it seeks to source better quality financial products and services for its members
  • It is particularly focused on organising finance on behalf of self-employed entrepreneurs
  • and take-up rates can reach as high as 70% for the most popular services
  • CASE STUDY - Parliament Hill: targeting affluent affinity group customers
  • Focused on providing broad affinity programs for professional associations
  • as epitomised by the CIMA Privileges proposition
  • Professional associations need to add value for their members
  • Simple marketing messages for no-brain' propositions most likely to succeed
  • Retailers
  • Multiple factors encourage retailer involvement in financial services
  • resulting in both threats and opportunities to mainstream financial entities
  • with retailer participation falling into five main categories
  • Carrefour: active in retailer financial services since 1981
  • M&S Money: snapped up by HSBC in July 2004
  • Tesco: a portfolio of 1.5m motor insurance policies in force
  • ASDA: Wal-Mart's UK unit seeks to replicate Tesco's success in general insurance
  • Sainsbury's: personal lending balances reach 1bn by October 2003
  • WM Morrison: Safeway takeover paves way for broader financial services proposition
  • Continental European retailers are also making an impact in financial services
  • El Corte Ingls: leveraging loyalty to its brand to promote financial services
  • Eroski: diversification into life and non-life insurance
  • ICA and IKEA: leading the retailer finance charge in Sweden
  • Vroom & Dreesman: pioneering personal insurance sales in the Netherlands
  • Auchan: Banque Accord cards in issue advance to 3.4m worldwide in 2003
  • Casino: creates banking joint venture in partnership with Cofinoga
  • 3 Suisses, Co-Op (UK), Galeries Lafayette, Karstadt Quelle, Migros, Otto Versand
  • Some retailers use in-house models for store card and loan finance provision
  • Complementary opportunities exist for retailers of healthcare and beauty products
  • Tchibo, Coop Italia, Royal Ahold: experimental financial services
  • Financial services will be increasingly central to retailers' strategic development
  • CASE STUDIES - ASDA, Marks & Spencer and Sainsbury's in general insurance
  • Wal-Mart, through ASDA in the UK, makes financial services a strategic priority
  • Sainsbury's aims to provide quality insurance at competitive prices
  • increasingly benefiting from its close relationship with HBOS
  • Marks & Spencer seeks to leverage customers' trust in its brand
  • CASE STUDY - Banque Accord: pursuing international opportunities
  • Customer numbers worldwide increase by 14% to 4 million in 2004
  • aided by the joint ventures that the bank has set up in many international markets
  • Partnerships are fundamental to Banque Accord's growth aspirations
  • as it seeks to perpetuate its rapid growth rate through a variety of initiatives
  • CASE STUDY - IKEA: building a pan-European financial presence
  • IKANO counts as many as 3,500 employees Europe-wide
  • IKANO Banken tackles mainstream banks head on in the Swedish market
  • In the UK, IKANO Financial Services works with third party retailers
  • IKANO is active in product warranties as well as household and travel insurance
  • IKEA's expanding retail operations pave the way for further financial services growth
  • CASE STUDY - Tchibo: pioneering retailer finance in Germany
  • Tchibo is now active in both the lending and insurance arenas
  • leveraging its strong brand, its position of trust and its innovative reputation
  • Tchibo's physical outlets are used primarily for promotional purposes
  • with customers having responded positively to the initiative thus far
  • CASE STUDY - Tesco Personal Finance: eyeing international growth
  • Tesco has been the UK's leading retailer for nearly a decade
  • and is now active across the full consumer financial services spectrum
  • Tesco applies a retailing philosophy to selling financial services
  • and benefits from the customer intelligence provided by its Clubcard
  • 35% of financial services sales are now procured on-line
  • and Tesco is actively seeking to expand its financial proposition overseas
  • having achieved 86m of profits from personal finance in the first half of 2004
  • Telecoms companies
  • Increasing functionality of handsets drives m-commerce opportunities
  • as epitomised by Vodafone's activities in several countries
  • Belgacom Mobile adds value to its loyalty program through its co-branded card
  • while T-Mobile has established a strategic co-operation with Postbank
  • Simpay seeks to encourage wider adoption of m-commerce across Europe
  • and MobiPay Espaa is a national initiative to develop mobile payments
  • TeliaSonera's participation in financial services is driven by several objectives
  • Trade unions
  • Finaccord's research covers 175 trade unions in 10 countries
  • Motor and household insurance are the products most commonly endorsed by unions
  • Unions in the Netherlands and UK are most likely to intermediate financial services
  • Several considerations drive trade union involvement in affinity marketing
  • CASE STUDIES - AMICUS / T&GWU: new approaches to member benefits
  • Trade unions seek genuine value from affinity finance deals
  • Financial partners must meet increasingly tough selection criteria
  • Take-up rates vary according to the specific product or service in question
  • Amicus is considering the future introduction of automatic member benefits
  • CASE STUDY - LO: broadening involvement in affinity marketing
  • LO is active in affinity marketing of both banking and insurance services
  • and has collaborated with Folksam, the insurer, for many years
  • LO perceives three main benefits in developing affinity deals for members
  • and has also established pension and long-term disability plans for members
  • LO will seek to broaden its financial services proposition in future
  • although sets tough selection criteria for aspiring partners
  • CASE STUDY - UNISON: emphasising affinity marketing ethics
  • Two main reasons drive UNISON's provision of affinity benefits to its members
  • The union is only interested in long-term and enduring affinity partnerships
  • and insists that suppliers are compliant with its ethical trading policy
  • Take-up rates for the most successful schemes reach as high as 15%
  • with the emphasis for 2005 being on consolidating the existing propositions
  • Travel and leisure companies
  • A trend for more frequent and lower cost travel characterises the market
  • Ryanair and Easyjet are growing passenger numbers in the 30-40% range
  • attracting a host of imitators to this increasing crowded market