CEE banks prefer to rely on fees levied for account management and cash operations, while tariff gaps between players are quite wide.
Romanian banks are relying on fees for account management and cash operations, which generate together 67% of overall revenues derived from fees for basic products and services, shows a World Bank report devised together with Capgemini, ING and The European Management and Financial Marketing Association (EFMA).
Fees charged for account management alone generate 40% of overall sums collected in under the form of fees, the highest weight after that of Slovakia among EU members that have not switched to the euro, yet.
As compared with CEE banks, in the United Kingdom account management fees bring just 5% of revenues, in Norway 2%, in Denmark 10%, reads the World Retail Banking Report 2008.
The report takes into consideration the data collected from nine banks with domestic operations: BCR, BRD-SocGen, Raiffeisen Bank, UniCredit Tiriac Bank, Banca Transilvania, Bancpost, Alpha Bank, CEC and ING Bank. According to the report, the nine banks concentrate 79% of banking system deposits.
As a matter of fact, most bankers are speaking of the need to boost revenues from operations not involving taking on risks, and network and operation expansion should also allow for fee revenues related to such products to go up.
Cash operation fees bring domestic banks 27% of fee revenues, compared with 21% in Poland and 32% in the Czech Republic. Again, Denmark and UK stand at the other end, with weights of below 4%. Instead, revenues from fees charged for payments account for 32% in Romanian banks' revenues, compared to 44% in Poland or 75% in Denmark and Norway.
The report also notes a high gap between tariffs levied by the banks included in the survey. Thus, price differences go as high as 46% for Romanian banks, close to the level of Slovakia.
"The high differences between levied tariffs are usually associated with markets undergoing a rapid transition (...)," underlines the report.
Globally, banks have tried to secure customers' loyalty by slashing prices of products influencing the purchasing decision, the report also shows. On some markets, banks have also resorted to the sale of bundled products to reach these goals.
In the range of products that can influence the purchasing decision the report mentions current accounts and debit or credit cards. The report also notes the existence of another category of products and services that, through the price policy, can influence customers' behaviour.
In this case, too, domestic banks have embraced the international practice, trying to encourage, through their fee policy, the use of alternative channels for basic operations, thus trying to avoid branch congestion and allow employees to focus on the sale of high added-value products.
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