Italian Banks Discover Marketing to Tap New Potential
As domestic competition intensifies, Italian banks say they are reinforcing their marketing strategies.
Large efforts are being devoted to market research projects, sounding out customers' needs and developing new products to fit them. Banco Ambrosiano Veneto says it is even beginning to test market products before launching them nationally.
Italian banks are beginning to offer their own mutual funds, insurance products, and leasing and factoring services. And they are beginning to advertise them.
There has been a race to launch new credit and debit cards and to get automated teller machine networks and electronic home banking on line.
Some previously costly services, such as check books, are being offered free to try to build customer loyalty. Banco di Sicilia said it has started offering free cash management as part of its strategy to be more competitive in customer services.
And waiting lines are being monitored.
"Italian banks are not used to having to compete for customers or sell their services," said an official at the Bank of Italy. "Everything had been very standardized, but this is all changing.
"Italian banks have been used to furnishing only the most antique of assistance ... credit," said the central bank official, adding that an enormous potential for growth exists in new products and services.
In the absence of a real pension fund market, alliances are being made with insurance companies to offer policies designed to fill gaps in the Italian state pension system. This is proving to be fertile ground.
A new joint venture among Cariplo, the TSB Trust Company of the United Kingdom, and Caisse Nationale de Prevoyance, called Caravita, became operative this month, offering insurance and pension policies. Cariplo, which holds 60% of the joint venture, said the company will integrate Cariplo Group products with life insurance products.
Banco di Sicilia has formed a joint venture with the insurance group Riunione Adriatica di Sicurta, called Basiras Vita, to offer insurance and savings services.
Credito Italiano has strengthened its position in the insurance sector by creating a joint venture with the Italian insurance company Gestione Polizze d'Assicurazione, and by taking a 30% stake in Commercial Union Vita, part of the British insurance group Commercial Union PLC.
Other financial-services initiatives include creation of stock market intermediaries, societas di intermediazione mobiliare, called SIMs, in line with the new law governing stock broking companies. Here, banks are often allying themselves with specialists, too.
"Cariplo's marketing strategy is moving principally along three lines: product innovation, product diversification, and renewal of our domestic sales network," said Antonio Ghio, its head of research and product development.
Mr. Ghio said that Cariplo is developing more specifically targeted products - for example, aimed at young people, the retired, or professional groups - as demand tends to become increasingly differentiated.
Flanking the new marketing strategies are corporate image considerations. Banks have hired public relations experts and are increasingly sponsoring cultural events and community projects to raise their profiles.
"Yesterday, banks did not communicate because they didn't feel the need to," said Patrizia Rizzotti, director of Milan's market research academy. "Today, the boisterous market is pushing banks to communicate and to do so efficiently."
While the advertising budget of Italian banks is still very low - $54 million, or just 1% of total Italian advertising - it is steadily increasing.
Banco Nazionale del Lavoro launched its first institutional campaign this month. The television ad campaign, estimated to cost $5 million, was handled by the creative independent Italian agency Armando Testa. It uses the slogan: "BNL: The new group moves with you."
Mergers and acquisitions also mean institutional advertising campaigns to present the newly formed banking group, and often, banks find they must change their name and company logo.
"We are still working hard to digest our mergers," said Gigliola Zecchi of Banco Ambrosiano Veneto. In 1990, when Banco Ambrosiano completed its merger with Banca Cattolica del Veneto, it changed its name and logo and launched a national institutional advertising campaign. BAV also began a regional reassurance campaign in the Veneto region.
BAV said it considered it vital that - with the merger - clients, businessmen, politicians, and opinion leaders in the Veneto not feel they were being "taken over." The regional campaign, handled by Canard, used slogans like, "To understand the people of Friuli, you have to be born there."
Next year, BAV will launch an institutional campaign announcing the incorporation of Citibank Italia.