With its new strategy for retail clients, Deutsche Postbank AG wants to extend its market position, establish new target groups and increase existing customer loyalty with simple and economical products. Speaking to journalists in Frankfurt am Main Prof. Dr. Wulf von Schimmelmann, Postbank CEO, stated “Earnings growth is the key to success at Postbank. Getting there is not only a question of achieving cost savings at the bank, but also reaching the client”. With its new retail clients strategy, the bank expects an additional contribution to earnings per year of Euro 100 million. In the short term, it anticipates additional revenues of some Euro 20 million as early as the 2002 financial year.

Postbank’s good starting position
Von Schimmelmann sees Postbank in a good starting position to meet the looming challenges currently facing all banks: The bank had improved its cost-income ratio considerably. But Postbank has also posted successes in terms of revenues, especially with its head office products: in the current accounts area alone it made a net gain in 2001 of over 100,000 new clients. It posted record growth with the DAX savings book, where total current volumes are over Euro 400 million. Every day there are savings deposit inflows of more than Euro 20 million. Von Schimmelmann states: “We do not want to rest on our laurels, but make a quantum leap forward.”

In view of the enormous changes on the market and the related potential, Postbank wants to “have a big slice of the cake”. According to the Postbank CEO, the chances here are good: “We not only have a base of ten million clients, but also the leverage to do something in this area.” In a market comparison, Postbank has attractive clients, with considerable investment and loan volumes.

60 percent considers bank business complicated
To address clients better, Postbank wants to sharpen its profile. Market research indicates that roughly 60 percent of the population feels that bank business is complicated. 49 percent is indifferent to various bank concepts, with some 20 identifying with concepts that promise individual and competent advice. But almost all banks are focussing on these clients, which means that there is very fierce competition in this sector.

“To be successful in this segment, Postbank needs to build up the necessary capacities. This would take years. But the client will not give us this time. Neither does the market. For this reason we will take another approach – quite consciously and rigorously”, stated Schimmelmann.

Simple products, low prices
"Simple and economical" will be the Postbank motto. This positioning directly addresses some 15 percent of clients, enabling a clear differentiation from the competition to be made. On a comparative basis these clients are very attractive. What Postbank wants to do is to gain a considerable share in that portion of undecided clients (49 percent). “We will further refine and highlight our previous low-price strategy. This then gives us a positioning which is attractive for Postbank and which can be presented credibly: Simple and economical money transactions", states Schimmelmann. Here the Postbank is proposing a limited number of easily understandable products customised to actual customer needs.

The bank wants to offer products at different prices via all distribution channels (branch, internet, telephone). And the products should be ready for immediate closing. The cost advantages the bank achieves should be passed on to the client.

Three particularly attractive client groups
Postbank wants to make advice understandable and the product recommendation comprehensible. “For us, it is very important that we can offer an uniformly high level of advice in all the branches”, underlines von Schimmelmann. “Those handing out advice must be in a position to provide the client with structured advice, with the same quality being provided throughout Germany, from northern Flensburg to southerly Garmisch-Partenkirchen. We do not want or intend to impress our client with offers in gobbledegook. Our clients neither know this language nor need it.” Advice must be given within a structured dialog on the basis of only a few questions, oriented around the previous knowledge of the client. The resulting recommendation must be clear and comprehensible.

With its new retail client strategy, Postbank wants to intensify its focus on three client groups, those that are particularly attractive in terms of needs and potential: affluent bank clients, clients over 50 and online clients. It also wants to pay particular attention to young people and business clients.

Postbank easytrade to become securities brand
Specifically for online clients, the bank wants to considerably broaden the product selection with funds offered to online clients. These are offered via the “Fund Supermarket” Postbank easytrade. At the same time, the Postbank subsidiary is to be re-positioned in order to gain better access to joint client potential. Postbank easytrade is to become the securities brand of the Group. With one-stop service, Postbank believes that it can appeal more to its clients. Under the motto “One client, one account, one securities account” it is targeting a considerable improvement of the cross-selling ratio.