Australia’s largest companies consume 60% more financial products from their primary bank if they bank with a global giant instead of the more locally focused CBA and NAB.
New research from analyst firm East & Partners reveals that global giants like Citi and HSBC have become much better at cross-selling products to institutional customers since the GFC, providing an average of 13 products per customer now, compared to just over 10 in 2008.
Commonwealth Bank has significantly improved its cross-selling capabilities, but still provides fewer than 9 products to each institutional customer, while cross-selling at ANZ, NAB and Westpac has remained fairly stable since the GFC.
East studied the uptake of 19 products from each bank by the 500 largest ASX-listed companies.
East’s head of markets analysis Lachlan Colquhoun said the findings came despite Australian banks having talked up cross-selling opportunities in recent years.
“In a low-growth environment, banks are trying to sell as many products to customers as they can,” he said.
“They’ve been talking about investing in cross-sell opportunities, but as they’ve done that, demand has started to dry up.
“[Cross-selling is] more important now than just prior to the GFC.”
Colquhoun suggested that Mike Smith’s “Super Regional” ANZ could have an advantage over its more locally-focussed competitors because it could better address foreign exchange and cross-border payment requirements.
Colquhoun said he was planning follow-up research after intense interest from East’s big four banking clients and others in the industry.
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