According to a survey by Roy Morgan Research, Westpac Banking Corp (ASX: WBC) has overtaken key rival National Australia Bank Ltd (ASX: NAB) as the leader in the cross-sale of wealth management products.
The survey found that 12% of Westpac customers who have a wealth management product hold it within the Westpac group, compared to just 9.3% in February 2011. In contrast, NAB is sitting in second place boasting a cross-sell rate of 11.1%, while Commonwealth Bank of Australia (ASX: CBA) has a rate of 9.8%. Although it has improved over the last three years, Australia and New Zealand Banking Group (ASX: ANZ) is still lagging behind with a rate of just 7.9%.
Cross-selling products is an important task for the banks to boost revenue. As competition levels across the sector continue to heighten in light of the low interest rate environment, cross-selling is a way to deepen customer relationships and improve their overall experience.
Westpac’s rate could certainly continue to improve as it revamps its branches to turn them into more welcoming and accessible venues for selling products. Just a fortnight ago, the bank revealed in an investor update that performances from its branches had already increased substantially with revenue from the branches growing 19% while sales per full time employee rose 40%. While 34 Westpac branches have been redesigned so far, a further 41 will be completed by the end of this year.
The survey revealed that Westpac’s success in cross-selling its superannuation and managed investment products has been particularly evident amongst younger and older age groups.
Although the big banks are still appealing to the dividend-hungry investors out there, each yielding between 4.9% and 5.6%, they are all currently overpriced following on from their strong rallies in 2013. While they all represent quality businesses, it may be worth remaining on the sidelines for a more attractive entry point.