A survey conducted by Accenture, one of the largest advisers to the UK’s banking sector, has revealed a few surprises that companies are yet to use to their advantage. The results indicate that although women trust their banks, they are rarely exclusively loyal to a single one, preferring instead, to keep their options open and are happy to switch if a better choice presents itself. Sounds a sensible move really.
And not surprisingly, women with the highest incomes are more likely to shop around in order to get the most from their money. Of the 1,000 women polled, one in five also said she had opened an account or purchased a financial product from another company rather than her primary bank.
No blind loyalty
Gone are the days when consumers stick with one bank for their entire lives. These days customers hold a lot more power than they realise and the competition for our money is fierce.
So, why are banks being so slow on the uptake? They are clearly missing out on chances to make money and vital cross-selling opportunities. And while this information may be new to us, surely it isn’t a surprise for those who hold on tight to the nation’s purse strings?
Well no, it’s probably not, but apparently the problem is down to technology. While we’ve all been guilty for occasionally blaming our oversights on the downfalls of technological wizardry – “No, I didn’t receive your email yesterday, sorry” – it seems that the banks may be genuinely hindered by their IT set-up.
You see, the report’s author, Natasha Miller, a senior executive in Accenture’s banking industry practice, believes the IT infrastructure is the fundamental problem. A typical bank’s system is based on a 1960s-era mainframe. “While these have had all sorts of extra systems added to them over the years, there is only so much you get from 40-year-old technology,” she says. “This inability to store and process customer data in useful ways is at the heart of the problem faced by many banks and building societies. They do not have the data in enough detail to identify profitable niches and market to them effectively.”
Miller believes banks are missing vital opportunities to tailor their products to the various life stages of a woman, due to not being able to capture and store customer information effectively. It’s true that we all, men and women, have different financial needs throughout our lives. But in the case of women, there are even more specific events that the banks could pick up on, such as marriage, motherhood or divorce. And women generally live longer, so as they get older they may find themselves in a more financially secure position and in need of advice, having possibly inherited money from their parents and then their husband.
But it seems that the banks are not doing too much about it because they can’t collect the data usefully. Miller says: “Our research found that UK banks could create sizeable sales opportunities with women if the institutions were better able to target this demographic with the right products, and advice at the right time.
“Lifestyles have changed dramatically in the past 20 years, leading to greater financial independence for women, but the financial services industry has not kept pace. Experience with overseas banks, particularly in the United States, indicates strong demand for bank offerings tailored to women.”
But the solution is not to demean women by offering them clothes or beauty products. Miller has more sensible advice. “Rather than simply slapping on ‘pink branding’, the key is delivering carefully crafted products supported by clear, targeted and timely advice, using both the internet and well-informed advisers, which is something very much within the ability of banks to deliver,” she says. Let’s hope we don’t see HSBC teaming up with L’Oreal anytime soon then.