wealth management company with A$105 billion ($76 billion) in
assets under management, has fired its latest salvo at the
country’s traditional Big Four banks by expanding its retail
banking activities with the launch of a direct banking unit, AMP
First reports Douglas Blakey
The roll out is being backed by AMP’s
biggest marketing campaign to date: a blanket advertising campaign
as AMP wades into an increasingly crowded Australian online savings
market.
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AMP’s banking arm doubled its earnings in
fiscal 2008, albeit from a low base, contributing A$21 million –
out of group underlying earnings of A$810 million – compared with
A$10 million in 2007.
Its deposits at the end of February amounted
to a share of the Australian market of just 0.29 percent.
“The campaign is AMP’s largest in terms of
both campaign spend and activity. AMP First is being promoted
across multiple channels, including search engine marketing and
optimisation, press inserts, local area marketing, across the
remainder of 2009,” said Robert Slocombe, AMP Banking head of
product, marketing and strategy, in an interview with
RBI.
The marketing punch is an indication of the
highly competitive nature of the local market. National Australia
Bank (NAB) and ANZ, both kicked off major direct banking
initiatives last year, for instance, while direct banking pioneer
ING saw its Australian retail deposits market share fall last year
by 115 basis points to 3.9 percent.
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By GlobalDataANZ launched an online savings account via its
own direct channel, One Direct, offering 7.5 percent with no
honeymoon period or fees; it also rolled out an innovative savings
account service with US social media group SmartyPig (see RBI
600).
NAB released a range of products from its new
direct banking brand UBank, including a three-month term deposit
product as well as six-month, nine-month and 12-month
offerings.
Undaunted, AMP believes market opportunities
exist due to industry consolidation, following Westpac’s
acquisition of St George and Commonwealth Bank of Australia
snapping up rival BankWest last year.
The launch also follows a recent refresh of
AMP’s online product line-up, including the introduction of
eASYTransact, a packaged account, and eASYCash Management, a cash
management account.
Slocombe remains adamant AMP can punch above
its weight and does not accept it may be at a disadvantage to the
direct banking operations offered by the traditional Big Four,
which all also boast extensive branch networks.
“The offers from our competitors are limited
in product range and features. AMP First allows customers to earn
an attractive interest rate on savings balances, 4.35 percent,
while still hawving unlimited fee-free access to their money,” he
says.
“Traditionally customers have to construct a
multiple-product arrangement, often with different providers to
access the type of functionality and interest rates that AMP First
delivers.”
|
Market share |
|
|
Australia – retail deposits, Feb |
|
|
Commonwealth Bank of Australia + BankWest |
135.9 |
|
Westpac + St George |
97 |
|
ANZ |
55.5 |
|
National Australia Bank |
54.7 |
|
ING |
16.5 |
|
Bendigo & Adelaide Bank |
15.5 |
|
Bank of Queensland |
13.8 |
|
Suncorp |
12.9 |
|
HSBC |
4.2 |
|
Citi |
4.1 |
|
Macquarie |
2.3 |
|
Elders Rural Bank |
1.3 |
|
AMP Bank |
1.2 |
|
Source: Australian Prudential Regulation |
|
