Banco Best has rolled out what it
describes as Europe’s first online investment community, offering
amateur stock market investors the chance to compete with each
other. The bank’s marketing director, Pedro de Sousa Cardoso, tells
Rodrigo Amaral the
marketing initiative is already reaching its key
sectors
It may be small, but Banco Best hopes to grow in the Portuguese
market by innovating and focusing on cutting-edge products. The
bank, which has just 12 branches, hopes that tools and products
such as an online auction for deposits, a new share dealing
service, investment-linked automatic savings accounts and an
m-banking service available on Apple’s iPhone, among others, can
distinguish it in the Portuguese market.
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Focusing its marketing efforts largely on the
mass affluent segment, Banco Best, an online brand established by
Banco Espirito Santo (BES) in 2001, has set up a virtual share
trading platform for stock market followers to compete with each
other.
According to BES’ marketing director, Pedro de
Sousa Cardoso, the bank’s ZIB website (the Portuguese acronym for
Investments in the Stock Market Zone), has attracted over 2,400
regular users out of its total customer base of 53,000 since going
live in June.
While such a figure is a drop in the ocean
compared to the 981,000 regular users of the main BES online
platform, BESNet, traffic growth on the ZIB platform outfit has,
said Cardoso, been “linear” since its launch. He told RBI the ZIB
online trading tool was just the bank’s latest marketing initiative
to strengthen its presence in the mass affluent market.
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By GlobalData“Banco Best has continually expanded its
product offerings and recently introduced in Portugal a range of 62
products managed by Nordea. It has also widened the range of
currencies in which clients can hold their savings, adding the
Swiss franc and the UK pound to the euro and dollar that were
previously on offer,” Cardoso said.
Banco Best’s online strategy of targeting
sophisticated investors is highlighted by the range of online tools
available on its site, in particular its auction facility for
depositors. The tool offers clients the ability to negotiate the
best available interest rate. Customers are able to deposit between
€1,000 ($1,490) and €10,000 in each auction and submit bids online
or by telephone.
“In the simplest auctions, the rage of
interest rates and amounts are defined by the bank, with clients
who bid for the lower rates having a higher chance of having a
deposit marched,” said Cardoso.
So called ‘flash’ auctions take place at
undetermined times, and the bank promises to offer enhanced rates
on such occasions. The concept has been designed to encourage
clients to compete with each other and has, said Cardoso, been well
received, with maturities at 30, 60 or 90 days.
Automatic iSavings
Other product innovations include the
bank’s iSavings offering which debuted last June. While automatic
savings accounts have become all the rage since the success of Bank
of America’s Keep the Change programme (see
product survey, RBI 613) – Banco Best’s offering comes with a
unique twist by linking its card range to investment products.
Holders of the top of the range iSaving Black
card have, for example, the option to round up their card purchases
with the difference between the actual price and the round-up
automatically deposited in a savings account, with interest
accruing at the Euribor interbank rate. Clients can then elect to
convert the amount saved into a portfolio of pre-selected mutual
funds.
The focus on innovation and technology has
extended to the mobile channel, with the launch last November of an
Apple iPhone application. The platform enables clients to access
their accounts, check balances, pay bills, and access credit card
history, via their iPhone or iPod Touch, while in May a stock
trading capability was added offering customers the ability to
trade in 1,250 stocks from eight stock markets around the
world.
In its first six months of operation, the
bank’s mobile channel attracted 1,300 regular users with Cardoso
confident of further growth. And while the bank’s distribution
focus has from day one been targeted at direct channels, it will,
said Cardoso, continue to maintain its 12 bricks-and-mortar
branches and seven investment advice centres, where the focus is on
selling its investment products.
A winning combination
As for results, Cardoso argues that
Banco Best’s belief in product and IT innovation is a winning
combination borne out by its performance.
In the first half of the year, Banco Best
posted a 45 percent growth in client investments in the 2,000 funds
on offer; even during the market turmoil of 2008 the bank grew
customer numbers by 11 percent while assets under management grew 4
percent to €1.16 billion.
The bank claims to lead the Portuguese market
in the selling of foreign-based investment funds, with a 23.9
percent share, and also leads the local market for futures and
derivatives.
