New Market Analysis - Case Study

Market entry / product development

The director of an insurance company had been looking for ways of entering the banking industry, recognising that retail banks have more frequent contact with their clients and that banking products fitted perfectly with the current offerings of the company.

The opportunity presented itself with maturing life products. Thousands of policyholders had been saving money for over ten years, and these were about to mature. Rather than risk losing these customers altogether, the company wanted to retain them. The solution was to provide a direct access bank account so that whilst the policyholder decided where to invest their savings, it could be earning interest for them.

We examined the options open to the company. While the company could obtain a banking licence, there were no aspirations to become a bank. The preferred strategy was to work with a banking partner thereby creating the fast and low cost entry into the market necessary to exploit the new tax year. We undertook research into potential banking partners and recommended a large clearing bank which was keen to enhance their relationship with the company and which had a good reputation in the banking industry. Once an agreement was in place, we carried out consumer research amongst existing policyholders on the features and benefits of the proposed account, and facilitated a series of workshops to set up efficient and effective processes from initial contact to ongoing account management.

The account was operational within 4 months, and within a year over £10million was held on deposit. To our clients surprise and delight, the average balance was going up rather than down. Following the success of this venture, we supported the launch of a mini cash ISA with the same banking partner and subsequently other banking products.