Banks outside the four major lenders are holding their own and are well positioned to win an intensifying war for bank customers based on service and satisfaction.
ING Direct head of delivery Lisa Claes has said non-major lenders were beginning to slowly claw back the ground they lost in the fallout following the global financial crisis.
“I think in the last 12 months we have seen a slight kick-up in our share of new business but the sector certainly hasn't regained the ground or the place it had pre the GFC,” she said.
However, Claes said the drastic increase in concentration among major lenders had stopped increasing, and the market was now seeing other banks and non-banks increase share.
The result is an intense ‘war for the customer’, amid conditions that include a slowing credit market, a growing reliance on deposit funding and pressure on net interest margins.
“The category outside the majors is a healthy one but you need to be fit to play, because it is a highly competitive one. Of course, the majors aren't sitting back saying we have got the scale so we are happy; they are fighting just as hard and they are big engines.”
Claes said in such an environment, the focus on service and satisfaction by all lenders will continue, and some non-major lenders had a distinct advantage. For example, ING Direct can demonstrate among the highest bank customer net promoter scores and satisfaction ratings.
“We need to leverage our agility, the fact we are smaller scale and can turn things around more quickly, and our ability to have a more forensic approach with our customers and third parties, in addition to our global background and heritage,” Claes said.
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