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Survey Indicates U.K. Banks Could Increase Sales by Better Serving Female Customers

Women could represent the largest and most profitable market for the United Kingdom’s retail banks, but the institutions’ information technology (IT) systems are too archaic to allow effective tailoring and targeting of financial products, according to a study from Accenture (NYSE: ACN), one of the largest advisers to the UK’s banking sector.

The research, titled “Because They’re Worth It,” found that many women are not exclusively loyal to a single bank and are open to switching relationships. In a survey of more than 1,000 UK women consumers, one in five respondents said they had opened an account or bought a financial product with an institution other than their primary bank in the last year – and those with higher incomes were the most likely to shop around.

More than half of respondents (55 percent) have accounts and other products from at least two banks. More than half (52 percent) also said they are likely to switch providers “if a bank was proposing tailored financial products for a woman’s different life stages (e.g. get married, have children, get divorced, become retired, become widowed)”.

The report’s author, Natasha Miller, a senior executive in Accenture’s Banking Industry Practice, said: “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 the United States, indicates strong demand for bank offerings tailored to women.”

Miller cited women’s distinct financial needs during various life stages, such as when they have just married or divorced. Another example of a missed opportunity is the large number of women who become wealthier in retirement, having inherited from their parents and then their husband, and need financial advice and suitable investment products.

“But UK banks struggle to even identify which customers are at these stages,” she said. “Often banks do not hold the relevant information. But even when they do they are often unable to access their data in a way that allows them to create appropriate products and services.”

Miller said IT is the fundamental problem, because the typical bank’s IT 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 said. “This is a major stumbling block.

“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 said.

Other key points from the research included:

• Banks are more trusted by women than other professional sources of financial advice (see chart 2 in Appendix 2), but banks are failing to capitalise on this strong position. This is important because the core current-account business of banks is relatively unprofitable as most customers do not pay for banking if they remain in credit, Miller said. By building on this relationship to cross-sell other financial products a bank could dramatically improve the profitability of its core business.

There is ample opportunity to cross sell -- 87 percent of women have a current account and two-thirds use savings products and credit cards, women are far more likely to turn to another provider for credit cards, investments, pensions and mortgages. For those women running their own business, nearly two-thirds (63 percent) turn to their primary bank for a business account while one third look to another.

• Banks would increase their success in picking up more business from women by targeting them at critical life stages, but financial institutions lack the data and ability to do this. Obvious opportunities that banks cannot identify for marketing purposes, due to archaic IT, include:

• Marriage/cohabitation -- Many women take an active interest in their finances. The level of interest increases for one-third (32 percent) of women once married as a result of the additional responsibilities (children) and debt (mortgage pension,) that couples face. This makes women with partners both an important market and also a strong route for banks to sell higher-value products such as mortgages and pensions to couples.

• Motherhood -- Career breaks combined with lower income and extra costs as well as the increase in lone mothers make this an important phase where financial advice is wanted, particularly if excessive debt is to be avoided. There are also clear opportunities around accounts, investments and Child Trust Funds for young children.

• Divorce -- A dramatic change in income, savings and pension, along with one’s overall financial position, can accompany a divorce. This is an important phase where financial advice is needed, particularly to avoid excessive debt.

• Inheritance -- Customers who inherit wealth often desire and can benefit from professional advice. As women live on average five years longer than men, according to the Office for National Statistics, it is common for them to gain significant wealth late in life.

• Living longer -- Longevity for men and women is increasing, which requires more provision for retirement years. Life expectancy has increased four years to 81 for women and increased six years to 76 for men compared with the early 1980s, according to the Office for National Statistics.

Miller added: “Women are not being effectively targeted or imaginatively catered for by banks. Our survey found that U.K. women are not getting the attention and the valuable services they warrant given their spending power. The implications of this report are that men and other distinct social groups such as workers from Eastern Europe are also not being targeted effectively for the same reasons that prevent banks from targeting women more specifically.

“Rather than simply slapping on ‘pink branding,’ the key is delivering carefully crafted products supported by clear, targeted and timely advice utilising both the Internet and well-informed advisers, which is something very much within the ability of banks to deliver.”

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Shazia Ejaz
Accenture Media Relations
Tel: +44 207 844 0930

Tim Prizeman/Angelina Hunt
Kelso Consulting (PR advisers)
Tel: 020 7388 8886

Appendix 1 - other findings include:

Women are a good target group for banks

• Women trust banks more than other professional sources of financial advice– 24 percent of respondents ranked their main banking provider as their preferred source to “get advice on your own financial situation / management”, ahead of other financial services providers – see Appendix 2 chart 2 for more details.

• The proportion of wealthy women is rising –projected to own 60 percent of the nation’s personal wealth by 2025, up from 48% at present . This is due to a number of factors:

– 52 percent of the population are women ;
– women are living longer;
– almost a quarter of women earn at least as much as their partner ;
– 55 percent of undergraduates are women ;
– almost 25 percent of single women now have a mortgage (up from nearly 10 percent in 1983) ;
– one-third of women are financially independent (up 47 percent since 1985) ;
– there are now 25 percent more female millionaires aged 18-44 than male (47,335 versus 37,935) which is partially due to more inheritance now being passed on to daughters as well as sons

• Women are more likely than the national average to open a current account with a provider outside of the Big Four banks (Barclays, HSBC, Lloyds TSB and Royal Bank of Scotland). Fifty-five percent of survey respondents have their main banking relationship with the Big Four, versus 65 percent of the population in general .)

Women’s requirements

• Many women are very interested in their finances – and many want to maintain their financial independence into marriage/cohabitation. This is important because it shows a high propensity for women to continue to buy financial products to meet their changing circumstances (rather than leave these matters to their husband or as a joint decision).

• Most women are happy with the internet and branches; very few like to use the phone. For instance, 50 percent said they prefer internet banking for “quick queries” and large proportions prefer it for deciding on higher value products (see chart 5 in Appendix 2), while 27 percent of respondents prefer going to the branch for quick queries (rising to 61 percent preferring the branch for higher-value products).

• Women are overwhelmingly risk-averse in terms of financial products, with only 1 percent of respondents saying they want products that give a “higher risk with a potentially higher return”. One-third of respondents (35 percent) said they prefer “lower risk with potentially lower performance” while 64 percent said they prefer a “compromise between risk and performance”.

• Women are very price conscious – 74 percent of respondents said they see price as “very important” when considering a new account or financial product, with 24 percent seeing it as “somewhat important”. (The next highest factor was “product performance”, with 64% and 30% respectively.)

Women are often the best route to a couple’s finances

• Marriage and cohabitation presents a major trigger for sales opportunities, particularly because the majority of women see themselves as taking the most active interest in the family’s finances:
– Women in long-term relationships enjoy managing finances and/or want to continue to be financially independent. Nearly half of married/cohabiting respondents asked their reasons for owning financial products personally said they enjoyed managing their own finances, while 47 percent said they want to be financially independent, and only 7 percent said they did so because they didn’t trust their partner)
– At least two-thirds of respondents said they will retain products they owned before marriage/cohabitation.
– A third (32 percent) of respondents said they became more interested in finances after marriage against 10 percent saying they were less interested.

Britain lags developments overseas

• Britain and Europe lag behind other developed economies. In Britain efforts to target women have largely focused on the high-end wealth management sector. For instance Coutts and a few other private banks have recently started offering “divorce loans” for women (interest only to pay for the costs of a divorce, with the capital repaid from the settlement). Coutts also offers an account card designed by Stella McCartney, women’s networking events (such as fashion shows), and an online magazine “Coutts Woman”.

• The United States is without doubt the leader in offering products and services to women in terms of the wide array of its offerings, with various banks offering a range of separate services, marketing material, internet site areas, and even women-only advisers. In Asia, Japan’s banks and asset managers are rapidly developing offerings to cater for women’s needs and requirements with focus on mortgages and asset management

This press release was distributed by ResponseSource Press Release Wire on behalf of Kelso Consulting in the following categories: Personal Finance, Computing & Telecoms, for more information visit