In 2008, the average price for active users of banking services has decreased by 2% to €70.3 globally, with price levels ranging from €54.3 in Asia-Pacific to €76.6 in Europe Non-Eurozone. However this global stability hides price variations between countries and regions. These are among the key findings from the sixth annual World Retail Banking Report*released by Capgemini, UniCredit and the European financial management and marketing association (EFMA).
Overall, prices decreased slightly in most regions, down 1.4% in North America, 2.3% in Asia-Pacific, and 6.1% in the European Eurozone (due to drastic declines in Ireland, down 33.3%, where packages were introduced, and in Spain, down 7.2%). In Europe Non-Eurozone, prices increased by 1.6% for local active users. Across all regions, payments continued to represent the largest part of the fee structure, but the spectrum varied from a high of 66% in North America to a low of 47% in Asia-Pacific.
Most of the countries surveyed in the report have now pricing strategies in which Internet services are less expensive than branch services. Certain Nordic countries established extremely attractive prices for online services to move clients towards the Internet whenever products were available. Frequencies of use indicate that this pricing strategy directly influences customer behavior.
Single Euro Payments Area (SEPA) continues to drive down prices in Europe EurozoneThe expectation was that SEPA’s standardized payments structure across the Eurozone would lead to tougher competition and lower prices-the price of payment means decreased annually by 3.6% in Europe Eurozone since 2006 and from €60.9 to €57 this year, while it remained relatively stable (down 0.7€) in the rest of the world.
Revenues are expected to decrease in the short-term, so successful banks will bear in mind that core banking activities are the backbone of their relationship with clients. Prices saw a 2% drop from last year, and a 1.2% annual decline from 2005, and because of the development of low-cost remote banks, clear pricing encouraged by regulators and associations, the impact of the Internet and geographic price convergence, this decrease may continue. Banks will therefore need to create value for customers in new ways by extending the scope of their services to non-financial products and they will also have to strengthen the added value they bring to clients by personalizing their customer approach and developing their advisory capabilities.
D.C.