Marketing and Communication Strategies developed by
the Savings Banks for Consumers, Private Customers and SMEs


A. Alvarez, L. Dufays



The 152 participants from 30 countries including some from Africa, Asia and Central and Eastern Europe ensured the recent success of the ESBG Euro Conference of 17 and 18 June held in Brussels. The subject of the conference, the communication and marketing strategies towards retail and SME customers of savings banks proved to be a rich territory for an exchange of ideas and experiences. As the three different panels unfolded, it became clear that the ESBG members of euroland have met with the challenges of the preparations for the initial phase of EMU, and have put in place a varying degree of strategies to communicate effectively with their traditional customers.

The European Savings Banks Group organised this conference in order to exchange experiences and best practices developed by each member - even those not in the first wave of "in" countries - to address the issue of adequate communication related to the introduction of the euro. More specifically, the conference presented the strategies and policies developed by the Savings Banks to inform their customers and increase their confidence in the euro as well as to integrate the new currency into everyday life. The conference also provided Savings Banks the opportunity to commonly assess the extent of their euro preparations, and relate the efforts made so far to their social commitment, their regional roots, and their status in the future enlarged Europe.

As a general conclusion, it can be confirmed that the euro-framework is firmly established: the macro-economic indicators show a growing degree of convergence between the 11 participating Member States; the legal framework both at Community as well as at national level has provided the necessary certainty; the political decisions, especially of the May European Council summit, as well as the appointment of the members of the European Central Bank, have pointed the way forward. The national changeover plans have also contributed to the steps that needed to be taken for the financial sector as a whole, and public administrations, retail and other business sectors now need to turn their full attention to preparing for the euro.

The importance of the role to be played by savings banks in this process was confirmed by the conclusion of the Director General of the European Commissionís DG II, Mr. Giovanni Ravasio in his closing address at the end of the conference. The savings banks were praised for their local and regional commitment and for their traditional proximity to a very large part of European citizens. In the process of familiarising the citizens to the new currency, the special role of the savings banks will be to provide adequate information that will help build confidence in the euro.

The euro will surely result in increased competition that will revolutionise financial markets across Europe, both for the "in", the "pre-in" and for the "out" countries. Therefore, savings banks will have to capitalise on their advantages thanks to their large networks, maintaining their traditional role as providers of financial services in their regions. The real challenge will be the capacity of savings banks to face increased competition, without altering their essential nature, while maintaining high levels of efficiency and preserving their commitment of social and regional involvement.

The results of the conference, with the two special panels on individual retail customers and on SMEís were very positive, although it is clear that a great number of SMEs in Europe are only just starting to prepare for the euro. In this aspect especially, the savings banks need to be ready to provide advice and information, not only to ensure the best possible service to their customers, but to avoid credit risks in segments of their SMEs clients that start preparing too late. A multiplier effect is expected from the preparations of large companies, that will encourage the early switch to euro in SMEís as well.


The conference was opened by Mr. Chris De Noose, President of the Management Committee of the ESBG/WSBI. Mr. Chris De Noose introduced the European Savings Banks Group and emphasised its traditional customer oriented policy and extensive network. Then, he analysed the main impacts of EMU on the banking sector such as the increased competition, the rationalisation of banking structures, the elimination of most EU foreign exchange trading, the completion of a Single Market with free movement of capital, products and services.

Moreover, the European savings banks have agreed that their basic policy response to any increased competition arising from EMU will be increased cooperation between each other. Clearly, this cooperation must increasingly take advantage of the new information and communication technologies available as well as financial innovations. If savings banks can achieve successful cross-border cooperation, they can gain significant advantages given that they operate a large branch network throughout ĎEurolandí founded on close local ties.

Finally, Mr. De Noose noted the importance to be timely and effectively prepared for the euro in order to maximise the potential benefits of EMU. This is the aim of the marketing and communication strategies prepared by the savings banks for the euro.

Mr. Patrick Evrard, Member of the Board of Directors of the ASLK-CGER Bank, recalled the special responsibility of savings banks in ensuring that their customers are well informed about the euro and feel confident about the new currency. The increased competition brought by the euro can be faced by savings banks mainly through excellent and transparent communication; the traditional local approach of savings banks and their proximity to the consumers, their customers could be an advantage in order to provide them with the most "personal" changeover scenario.

Mr. Guy Quaden, Director of the Belgian National Bank and European Commissioner for the introduction of the euro, recalled the great convergence achieved by the Euro Countries and the positive macroeconomics figures; however, he said, a lot of work still needs to be done in the area of public deficit (i.e. he cited the Belgian case), and in that of communication to the public. The challenge of savings banks is to inform the public and the private customers, including the most fragile part of the society and the SMEs.


The first panel was moderated by Prof. Paul De Grauwe of the Katholieke Universiteit van Leuven. The introduction given by Prof. De Grauwe pointed to the more general challenge at macro economic level that will create areas of potential risks within the EU, due to the possibility of asymmetric shocks. The role of the European Central Bank (ECB) will prove to be crucial in maintaining stability among countries where the economic cycles start to differ. Prof. De Grauwe sees the "boom at the periphery" effect (the countries around the Mediterranean) as one of the potential challenges for the new ECB to face. Furthermore, the loss of national monetary instruments imposing the constraints of the Stability and Growth Pact on the participating Member States, will certainly influence the EMU process. Prof. De Grauwe pointed out that the future of the structure of financial markets will change drastically. This, in combination with the need to identify new regulatory structures that will combine prudential control with improved information flows, will certainly influence the development and behaviour of Savings Banks in the new euroland.

The members of the panel highlighted on one hand, the necessity for Savings Banks to strengthen their identity as retail banks which includes being geographically close to their customers, building personal relationships, participating in the economic welfare of their region and on the other hand, to open windows to co-operation with international establishments in order to be part of the globalisation trends. The panel showed clearly that the main challenge in the Euroland is building the confidence of customers in the new currency by providing them active personal guidance and real personal communication. Thus savings banks have the possibility to face the competitive euro markets without altering their essential nature, but on the contrary, maintaining high levels of efficiency, and preserving their founding principles such as their strong social commitment and local/regional approach. Furthermore, it was underlined the necessity for savings banks to capitalise on the special advantages they have in euroland, such as their customer base, the long-standing nature of their bank-client relationship, their branch presence.

The conclusions pointed to some of the strategic issues that will emerge, if they have not already done so: losses in areas of treasury dealing; challenges in the area of mortgage lending; retail savings will most likely be in high demand for a wider ranges of products, and increasingly cross-border; the concentration of financial institutions that offer a number of services will be able to operate cost-efficiently and need for highly trained and motivated staff. Finally, Prof. De Grauwe stressed that trends towards shareholder value and corporate governance will result in increased demands for efficiency. Besides the obvious advantages of Savings Banks, it was pointed out that the winner in the new euroland will offer low cost, high value products, following new delivery channels that will give new "euro" products a greater accessibility and appeal. However, new packaging into "euro" products can only success if they have a European appeal, and develop sufficient critical mass to be able to survive in an increasingly competitive market.


The second panel was introduced and chaired by Mr. John Wyles, Managing Partner, ECO-European Communications and adviser to the European Commission. This panelís task was to examine the communications challenge to Savings Banks in addressing their traditional customers. Mr. John Wyles pointed to the obvious opportunities offered by the euro as a facilitator to "re-brand" and "re-bond" with the customers. While the Savings Banks undoubtedly have their set ideas about communicating with their customers, Mr. John Wyles reminded the audience that we are also competing with the official campaigns from Member Statesí governments, and that these are not always offering necessarily the right level of information, indeed: even misinformation sometimes. Mr. John Wyles encouraged the Savings Banks to watch out for gaps and vagueness in the broader communications strategy, and to continuously assess customer attitudes. He identified three types of customers: there is one group that is pro-euro or relatively neutral about the euro; the second group is branded as "rejectionist" and the third is the "confused" group. These all need to be carefully addressed, and for this task, Mr. John Wyles pointed to the importance of adequate staff training. In order to reach as many customers as possible, the Savings Banks have implemented programs to "train the trainers", which allows a multiplying effect within the entire network. Besides targeting the state of mind of customers, Savings Banks also need to distinguish between the different needs of the different audiences: for example, suppliers need to know when they should be invoicing in euro, employees need to be informed of the general impact of the euro on the business of their customers, etc.

The members of this panel stressed the need for internal and external communication on the euro as well as the importance of transparency of the information on products and services. Savings Banks need to inform and guide their customers, but they have also an opportunity to transform this need into a competitive advantage. The speakers stressed the importance to simplifying and demythologising the euro in order to include it in the daily life of customers. While one member of the panel felt that the euro changeover will in fact change very little in the life of the "normal" customers, another pointed that a huge change in customersí behaviour (especially in their investment) is to be expected as products and services will lose their strict domestic identity. In this context, staff as well as customers should be trained in order to identify new needs. As far as strategy is concerned, the most adequate one should be a mix of management expertise, transparent and coherent information and good financial planning. The "make or buy" policy was mentioned twice by members of the panel stressing the importance and the need for Savings Banks to focus on core businesses and outsource some others activities. "If you are not able to do it though management expertise, buy it". Finally, again in the interest of focusing on customers' preferences, savings banks should target their market products and cooperate with other financial providers, in order to offer their customers, efficient, convenient, fast and cheap banking services.

Last but not least, even after 2000, financial institutions should continue providing careful attendance and counselling to their clients concerning the euro. Indeed, there is a risk to have too many products and services on the market and the transition period may be long and chaotic towards what will inevitably lead to increased globalisation of financial markets.


The General Secretary of the "Fédération des Experts Comptables Européens" (FEE), John Hegarty chaired the third panel. In his introduction, Mr. John Hegarty made allusion to the poor preparation of SMEs to face up to the challenges of a new single currency: most still do not see the need to be prepared early to the introduction of the euro and this is due to a lack of information and a lack of products specifically targeted to SMEs. Here, Savings Banks need to act and indeed must point out to their SME clients the advantages of preparing now. The investments in euro preparations must be made now, if savings are to be reaped tomorrow, and it must be made clear that the investments to be made are not just of a technical nature, but are actually of strategic importance for survival in the future.

It appeared from this panel that the banking staff in charge of commercial relationships with SMEs has been carefully trained to enable them to offer advisory services. As in the first panel, the speakers pointed that so called new "euro" products could be old ones with new names. They also insisted on the necessity to turn to more international activities and more professional staff to face new needs in international products and services. The moderator emphasised that savings banks have the obligation to alert SMEs taking advantage also of the support of other governmental and/or international bodies.

It was also pointed out that the guiding role of savings banks is to collect and provide adequate information: it is necessary to develop communication materials that respond to the demands: these are not going to be the same questions at the beginning of 1999 as they were two years ago; nor is it expected that during the transitional period the information requirements will remain static. In this respect, savings banks have offered many seminars and materials to help their SME customers to first of all identify their problems and challenges and then to solve them. Some of these realisations have been accomplished with international bodies such as the European Institutions, the FEE, etc.

In the expected increased trends towards internationalisation, the mentality of the staff must change and become more internationally oriented as the financial markets will provide more international business opportunities and customers will seek more professional and value added counselling and advice.

If the success of the Savings Banks depends on the success of its customers, the role they must play in the euro changeover is to identify and acknowledge the need for information. To do so, it is important not only to give information, but to listen carefully to the needs of SMEs and thereby identify the targeted areas that need special attention.

In conclusion, it was pointed out that the success of the savings banks is closely linked to SMEs: if SMEs lose in the euro market, this will bring a credit risk also to savings banks.


The closing remarks of the conference were spoken by Mr Giovanni Ravasio, Director General of DG II "Economic and Monetary affairs" who welcomed the role that the Savings Banks play as local and regional providers of financial services with a history of closeness (proximity) to the citizens. Mr. Ravasio encouraged the Savings Banks to also help the local authorities in their changeover process to the euro. Mr. Ravasio emphasised in particular the positive macroeconomic indicators, which will guarantee the start of the euro in a favourable climate. However, he also added that some gaps need to be filled in the euro framework such as the suppression of tax and fiscal barriers, the differing performance of the various countries in meeting the Maastricht criteria, the lack of information of Public Administrations and general public. Savings banks with their personal message will be a fundamental factor to ensure the credibility of the euro process and help in building the confidence of customers by helping them to familiarise themselves with the new currency.

Mr. Ravasio spoke of the "shock of transparency" that will increase competition between regions and localities, by enducing them to attract a maximum of investments. Here is where the local authorities, supported by the European Savings Banks, have an important and stimulating role to play in developing the local and regional potential.

23-06 1998