Commerzbank added 50,000
net current account customers in the third quarter. To help it
achieve a target of attracting 100,000 new accounts in the fourth
quarter, it is offering an account switching incentive of €50 and
has kicked off a major advertising campaign; its biggest for two
years. Duygu Tavan reports.
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Having completed
the rebadging and integration of Dresdner’s retail branches into
its own network, Commerzbank is targeting an increase in current
account market share in a market dominated by the country’s
Sparkassen and Landesbanken.
And to judge from the upbeat
tone of its ad creative – the song accompanying the campaign rings
out the message: ‘We are the ones, we will make it, we will take
it’ – Commerzbank is confident of success.
Commerzbank added 50,000 net
new current account customers in the third quarter and has targeted
another 100,000 net new customers by the end of the
year.
In addition to an integrated
advertising campaign across TV, print, online and radio,
Commerzbank has added an account switching incentive of €50 ($67)
to new current account customers switching from another
bank.
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By GlobalDataCommerzbank is also offering
a competitive interest rate of 2% on credit balances of up to
€25,000 until 31 March 2011.
The account is being targeted
at all segments of the market – “whether customers are 70- or
20-years-old” – as long as they deposit a minimum direct credit of
€1,200 per month. If that condition is not met, Commerzbank will
charge a monthly fee of €8.90.
Commerzbank’s account
switching initiative is the latest salvo this year in the battle to
grow current account customer numbers in Germany. Deutsche Postbank
reduced the minimum monthly credit required for a free current
account from €1,250 to €1,000 at the start of the second
quarter.
While it is early days,
Postbank’s current account numbers have not risen since it cut the
minimum monthly credit and remain flat for the year at
4.93m.
By contrast, Deutsche Bank
refuses to get into a price war. Germany’s largest bank by assets
told RBI that it will continue charging current account
customers a monthly fee of between €4.99 and €9.99.
Although Commerzbank is
confident it can achieve its fourth quarter target, analysts in
Germany are sceptical.
Andreas Plaesier, an
analyst at investment bank Warburg said that the €50 incentive
“will not create a pull-effect.”
Plaesier told RBI:
“Other banks are not sleeping. There would have to be a high number
of unsatisfied current account holders [for Commerzbank to meet its
target].
“When Commerzbank’s online
subsidiary ComDirect initiated a similar campaign – and even
offered an additional €50 incentive if after 12 months the customer
was dissatisfied with its service – the bank’s deposits hardly
changed: in fact, total deposits remained flat at
€1.42bn.
“ComDirect had very few
deposits. There was no pull effect. Customers did not seize such
incentives just to grab some cash,” Plaesier said.
“People have automated
services such as direct debits – which Commerzbank could set up as
well of course – but generally, people shy away from switching
their bank. With Christmas so near, it is going to be difficult to
attract new customers. People have other priorities in December
other than switching their current accounts and changing account
details.
“I doubt the campaign is
going to be an immense success.”
However, Plaesier said the
campaign could appeal to a younger, “more flexible” generation who
do not need to use branch banking.
This is where the Sparkassen
and Landesbanken have a disadvantage, Plaesier said.
“The Sparkassen and
Landesbanken have a completely different market penetration. They
dominate the retail sector. For the past 50 years and more, they
have successfully relied on their branch network, which consists of
a de-centralised structure.
“The German Savings Bank
Association alone has 477 legal entities across Germany, each with
its own branch network. But they were slow to invest in alternative
distribution channels, such as telephone and online banking, so
their online channels are not as good as that of smaller
banks.
“They are also different in
terms of revenue structure – they generate most of their revenues
from charging account fees. If they dropped these fees, they would
lose a large part of their income.”
Commerzbank can “surely expect” to attract new, younger,
customers who do not rely on in-branch banking and want a better
online service.
