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BANKING TECHNOLOGY | Contributed Content, Singapore
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Martin Smith

Why strong 'mind share' is important in Asian transaction banking

BY MARTIN SMITH

Asian banking success is traditionally measured by Market Share, Wallet Share and Customer Satisfaction rankings. Yet an oft-overlooked metric is ‘Mind Share’. How can banks that are operating in highly competitive and increasingly interconnected Asian markets garner greater support and advocacy of their products and services? This strategic and commonly misunderstood challenge is a clear differentiator between some of the key banks in Asia, and their competitive position against rivals. The concept also offers a valuable opportunity for growth and overall competitive positioning fulfilment.

What does ‘Share of Mind’ really entail from an Asian Transaction Banking perspective, and why is it suggested as an integral driver of improved Market Share and Wallet Share? Mind Share in this case encompasses the perception businesses have of which bank is ‘the’ bank for transaction banking services in Asia. The same concept applies from a marketing perspective in other industries, for example when someone asks for a ‘Kleenex’ instead of a tissue, ‘Google’s’ an online internet search or orders a ‘Coke’ instead of Cola - this typifies the strong Mind Share Kleenex, Google and Coke hold within their respective markets. The concept is much more than a marketing principle, and bears a strong influence on associated performance measures for transaction bankers.

In the most recent East & Partners Asian Institutional Transaction Banking report, 931 businesses were surveyed across ten countries on “Which institution did they think of first for transaction banking services”. These results showed that dominance by Market Share was also backed up by Mind Share in almost every case. The top three banks control over half the transaction banking market ahead of the next three banks that together total less than a quarter of all primary banking relationships.

Average wallet share is higher among banks that have secured strong Mind Share with their own primary and secondary customers. Businesses conduct 66.3 percent of their transaction banking requirements with the largest three banks on average compared to only 50.7 percent average wallet share amongst the next three.

This is not always the case, however, and there are exceptions to this trend. Mind Share for one of Asia’s most trusted institutions is curiously low, and yet it achieves a higher Wallet Share than any of its rivals. Perhaps there are advantages to being a “part of the furniture” which transcend modern theories of Mind Share.

With that notable exception, East & Partners analysis across both Asian and Australasian markets continually demonstrates how Mind Share is a dependable leading indicator of Market Share performance and Wallet Share advantages. These strengths translate directly into additional cross sell opportunities and higher customer satisfaction by demonstrating how the bank’s relationship managers offer a unique service proposition and strong knowledge of the customers’ business. The value lies in outlining quantifiable, objective goals that staff and management can absorb and apply to the transaction banking requirements of both small and large businesses.

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Asian Banking & Finance. The author was not remunerated for this article.

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Martin Smith

Martin Smith

Martin Smith is a Senior Markets Analyst for East & Partners, based in Sydney. He provides in-depth research and analysis to Asian and Australian banks across institutional, corporate and business banking markets in addition to formulating and implementing thought leadership initiatives.

 

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