We asked ourselves how
a market challenger would
approach the market segment
of small and medium
ent erpris es, and opted for
a set of no-frills banking
services under a new lal?el
IDB
Gert Bouwman
bank," adds Greg McAweeney, who has just transferred from
Ireland (General Manager for RaboDirect) to Australia (General
Manager RaboPlus Australia). "Yet it is important to act as a
challenger and position ourselves as a no-frills bank that offers
its customers self-service, simplicity and freedom of choice.
We are the new kid on the block, but with a very solid parent."
International Direct Banking's business model is geared for hyper
competition. It is a perfect example of lean banking.
Most systems are maintained in shared service centres and IDB
outsources processes when suppliers are more cost effective
than in-house departments. New ventures, such as RaboDirect
in Ireland and RaboPlus in New
Zealand, rely on the same
backbone, while adjustments for
the local market and marketing are
coordinated by local management.
This enables each branch to embed
its online banking services in the
local culture, taking into account
that attitudes towards savings,
investments and loans differ from
country to country.
The first foreign test market for
this no-frills model was Belgium.
Rabobank looked at Belgium
as a potential second home
market, since many Belgians
already know the bank partly due to its sponsorship of
popular road cycling races, such as the Tour de France.
Rabobank assumed there were similarities between the
Dutch and Belgium markets for fïnancial services, which is
why the new online bank was presented as Rabobank.be.
The Belgian online bank now has more than 150,000
customers bank and contributed its first profits to the
company's results five years after its launch.
loans, while in Belgium there are few synergies between the
two services. A test with online loans was not successful,
so now Rabobank.be is adding investment products and
business saving accounts.
In the longer run, Vermeiren would like to add payment services
and maybe even credit cards to his online portfolio, as most
major Belgium banks are now reducing their retail networks.
Customers who lose their trusted bank branch around the
corner and are invited to move online will be more receptive
to competing offers, he argues. 'The credit crisis is now forcing
all the major banks to rethink their retail network and shift
their customers to self-service.
Rabobank could make Belgium
a real second home base by
expanding its online services to
make it a complete online bank.
That, however, is a strategie issue."
Gert Bouwman,
Global Head of International Direct Banking at Rabobank.
The Belgium pilot was a great test case. One of the lessons
learned was that even between two neighbouring countries
there can be remarkable differences in consumer behaviour,
legislation and product features. Stephane Vermeiren, General
Manager Rabobank.be: 'To develop Rabobank.be further, we
have to take Belgium preferences into consideration. There are
certainly opportunities in this market, but they may differ from
those in other countries."
One clear example is credit accounts, he says. For many Dutch
customers it is common to combine saving accounts with
Adding new services in existing
markets or entering new markets is a
serious challenge for International
Direct Banking. Until last year it
seemed an online savings bank
that could offer a high interest
rate due to its low-cost business
model was a sure winner. It gave
Rabobank the chance to gain a
foothold in smaller countries and
establish a brand name for limited budgets. But the credit
crunch changed the rules of the game. Established banks were
already starting to react to online challengers by offering
Global Head of International Direct Banking at Rabobank):
ISSUE 17
THE WORD
