Roy Morgan research published yesterday by InvestorDaily showed retail banks, led by Westpac and CBA, have as much as 60 per cent of their personal super customers using the bank’s retail products, while for AMP it was around 2.7 per cent and just 1.6 per cent of six million industry fund members use ME Bank.
The research did not delve into the reasons behind the disparity but it is intuitive that major banks would be able to use their deep retail banking customer relationships to recommend super products, while it would be trickier to move customers’ entire finances to a new bank offering purely on the basis of holding their super.
It follows that businesses with larger super offerings and comparatively small retail banking offerings such as AMP and the industry fund sector would have a smaller proportion of customers crossing over.
“Australia’s banking landscape has for a long time been dominated by the big four, currently holding more than 80 per cent of the market, so it naturally follows a higher proportion of most super funds’ members will bank with one of them,” ME Bank chief executive Jamie McPhee said.
“However, that some of the big four have been able to cross sell super to their existing customers is of the biggest concern, specifically for the retirement plans of those customers.”
Mr McPhee said this was especially concerning given the long-term outperformance of industry fund super over retail super, according to Australian Prudential Regulation Authority data.
Mr McPhee added that ME Bank is actually getting much better at cross selling to its customers, 97 per cent of whom are industry fund members. The number of products per customer increased to 2.4 during the last financial year, according to ME Bank.
“We’re a challenger bank with a unique growth strategy that’s showing signs of success. Our customer numbers grew 12 per cent last financial year, while home loan sales were up 17 per cent and retail deposits were up 27 per cent,” he said.
