French retail bank LCL, a subsidiary
of Crédit Agricole, has rolled out an innovative ‘build it
yourself’ retail banking product that is being marketed as a way
for consumers to save money. Rodrigo Amaral spoke to Sébastien
Mahieux, head of client marketing at LCL.
French bank Le Crédit Lyonnais, referred to as LCL,
has launched a service that allows its clients to have control over
the products and services they use and pay for. The goal is to
challenge the practice of packaging products as well as to meet the
new aspirations of better informed retail banking clients.
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The service, called ‘LCL à la Carte’, is being
positioned as a way for the bank’s customers to save money by only
selecting and paying for products that they actually need. It has
been launched at the same time that new consumer laws have
implemented higher transparency requirements regarding banking
fees.“The idea behind LCL à la Carte is that the client will not
pay for things he does not need,” Sébastien Mahieux, the head of
client marketing at LCL, told RBI. “On the other hand, he
or she will be able to take advantage of cumulative discounts.
Global fees will, therefore, be more to clients’ advantage than
those of packages offered by other banks.”
LCL says that savings achieved by the à la
carte service can reach as much as 20 percent of the combined cost
of the products purchased by the client. A further 10 percent
discount off total fees charged to the client at the end of one
year is also promised.
In the case of account holders who are younger
than 30, discounts can amount to up to 37 percent of total fees as
LCL à la Carte can be combined with other promotions aimed at
attracting young customers.
Clients can choose the products they want
either online or with the help of an adviser in an LCL branch.
There is an online calculator for customers to work out how much
they can save with each combination of products. The variables
include:
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By GlobalData• Means of payment (debit cards, chequebooks
and others);
• Internet banking;
• Banking by SMS;
• Online or print statements;
• Saving accounts (Livret A, sustainable
accounts and others);
• Overdrafts;
• Short term loans; and
• Insurance (payment protection, overdraft
protection, life insurance).
The only mandatory product for account holders
is a debit card, according to Mahieux. From that basis, clients can
build up their own packages of products of services.
“We believe clients will chose an average of
four payable products,” he said. “The most popular will certainly
be the debit card, payment protection insurance, the online
brokerage and a free savings account.”
Cost estimates based on the four products
mentioned by Mahieux, if purchased by a single, over-30 account
holder who is not a student, would cost €5.69 ($7.31) in monthly
fees, including a 10 percent discount that applies when two payable
products are chosen in addition to the debit card. Services like a
daily statement sent by SMS cost €4.50 a month, and chequebooks are
a further €3.50. Premium products like a Visa Premier card can add
€10.50 a month to the fees charged to the client.
The online simulator offers explanations when
required, and the help of an adviser can be requested online if
necessary. Some of the products, when presented to the user, are
accompanied by videos where LCL staff members explain their
advantages. Pop-up pages also aim to explain why products like
payment protection and online money transfers could prove to be
good choices.
LCL claims that the new service reflects
changes that have already begun to take place in the retail banking
market in France.
“The demands of French clients have evolved,”
Mahieux said. “LCL à la Carte is a better match to what clients
expect today: autonomy, the ability to compare products,
transparency and not to pay for things they don’t use.”
The point that French clients do not always
benefit from packages of products and services offered by their
banks has been broadly vindicated by a survey made by CLCV, the
French consumer association. The researchers concluded that, in
most French banks, clients pay more for packages than they would do
if they could pay only for those products they actually use.
Worse for poorer clients
According to the survey, the
situation is particularly unfair for poorer clients: they pay on
average €111.62 a year in account fees when they have to go with
set packages. If they could pay for only the things they use, the
cost would be €73.14. In some banks, the difference reached more
than 120 percent, according to CLCV.
More sophisticated account holders, who tend
to make use of a higher number of banking services, also often fare
badly when they cannot pick and chose banking services. CLCV
examined the banking habits of wealthier banking segments and
concluded that at half of the banks analysed these customers would
pay more for ‘off the shelf’ packaged services than if they could
select products individually.
New consumer legislation in France, however,
could help bank customers to become better informed and help them
put pressure on banks to have more say over what they pay for
banking services, according to the head of CLCV, Reine-Claude Mader
Saussaye.
Since January, French banks have been obliged
by law to provide annual statements of fees charged to their
clients. Mader said she welcomed the new legislation as a major
development that will finally allow clients to properly compare
their bank with the competition.
