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ISCOVER
Staff Reporter
ING DIRECT’s executive director of distribution, Lisa Claes, believes brokers and planners who understand the potential impact of the Basel reforms will have a big advantage over those businesses that don’t.
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“The changes will see banks require “stickier” liabilities and customers with multiple products,” Ms Claes said.
Although the final details are yet to emerge in Australia, the Basel reforms will require banks to increasingly match assets with liabilities, like for like. The days of borrowing short and lending long are numbered.
Ms Claes said Basel III will force banks to bundle products or offer discounts for additional products which will lead to improvements in the onboarding processes, and the universal application form (one form/ process for multiple products ) may proliferate.
In addition, distribution models will converge, with intermediaries increasingly competing to broaden financial solutions for customers.
Banks, in an effort to attract distributors competent in this regard, will undoubtedly offer unique rewards for those with proven ability to attract the one customer for many products.
Finally, 'customer propensity models' which can predict at what stage of the customer’s life cycle or relationship with an institution they are most likely buy more products will become even more critical.
“The opportunities of Basel III for intermediaries are clear. The liquidity incentives afforded to bank manufacturers will ensure intermediaries have multiple products to sell,” Ms Claes said.
“While the Australian Prudential Regulatory Authority (APRA) is yet to finalise all the details for Basel III, the direction is clear. Those businesses that understand the implications have time to prepare and succeed.”
