At least four major super funds including AustralianSuper, Cbus, HESTA and HOSTPLUS have joined bank ME in launching co-branded banking cards and a mobile bank app.
The banking app has been specifically designed to enable data to be aggregated, which will facilitate “data triggered” engagement with members. One of the cards, named Frank, has a competitive interest rate (9.99 per cent) charge and the other is a transaction account, which allows free ATM withdrawals from any ATM nationwide, and is called Buck.
Rebecca James, chief marketing officer at bank ME, said; “The amount of data triggers, what would work for industry super funds, and what would work for us, would be huge. For example if someone opens their first bank account with us, what an amazing opportunity to cross-sell an industry super fund to that particular person. When they have their first child, we’ll see it – they’ll be using Frank, they’ll be using Buck – and you can have conversations with them around increasing their insurance cover.
“Paying off the loan in six months? You could go out to them with a message around increasing their contributions to super through salary sacrifice,” James told delegates at the ‘Building a Brand on Technology’ seminar.
She added that a customers thirsts for experience over static transactions, and businesses are transforming themselves using data insights and digital capability in order to meet this new demand.
“The information age is dead and gone. It’s been replaced by the information economy, where computing power paired with data and communications is making amazing connections with consumers,” James proclaimed. “We have been very, very busy over the last four years dramatically transforming our business from a technology point of view. In fact the final phase of this technology revolution goes in this weekend.”
James said that one of the biggest threats, according to what funds had told her in conversation, was the BT Super for Life account.
“I’ve heard varying stats about members who are leaving industry funds. 15 per cent to 25 per cent of members who are leaving are shifting their superannuation to BT Super for Life. These are pretty staggering numbers,” she said.
When BT Super for Life was launched its proposition was that banking and super would sit side-by-side and customers would see that every single day. This would put superannuation top of mind each time customers logged into online or mobile banking.
“That simple side-by-side comparison was quite a revolution for us,” she said.
Another crucial aspect was that data triggers have allowed banks to message customers at junctures when they were most receptive, for instance when they changed jobs or had six months left to pay off their home loan. At these points relevant products could be targeted to the customer, including encouraging them to change their super fund.
“We know they are eating our lunch. What are we going to do? Are we going to sit here and cry about it? What’s the solution? What can we do together to solve that problem?”
James believes innovations that make the members experience easy and pain free is key, saying the thirst for applications and convenience consumers have was so strong even legislative barriers are not stopping starts up.
She cited several examples, such as the taxi booking service Uber, where start-ups had cut the “pain points” from the business model and as a result taken a significant market share, adding that PayPal has 52 million active users because the banks “couldn’t get their act together” and remove the “pain points” in online purchases.
She said that in a members view the four main barriers in superannuation were: being out of sight and out of mind; complex to set up; a nightmare to consolidate; and having little relevance to daily life.
“If your members are also banking with bank ME, we want to have discussions with you about how, when they log into their accounts they can see their superannuation balance. So we can start to get that relevance.”
She added the way to get those data triggers, which Westpac and BT Super for Life seem to be sharing every single day, was by members using co-branded product, and also creating a third party entity that industry funds and bank ME shared.
“We need to create a third party entity that contains data. We will put all the transactional data that, as a group, is relevant for us in the way we do business. If your members are carrying these cards with your brand on them, we will be able to get that data. So we will know all the stuff that Westpac knows about its customers so it can promote its BT Super for Life product to them.”
Over the past twelve weeks fourteen other funds have expressed an interest in joining the innovative scheme, which is to be launched in May.