Retail Banking in CEE: Exploiting the Potential of ... - Roland Berger

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18 MICRO STRATEGIES – ELABORATING SEGMENTATION AND SERVICE MODEL There are popular sub-segments targeted by most of the banks having micro segmentation – The medical sector is the dominant one Micros consist of small legal entities on the one hand and self-employed persons and independent professions on the other hand. In this study, the sectors commonly targeted by CEE banks were identified. Concerning legal entities (typically the larger micro business), the most attractive sector is import/export, followed by production and construction. Among self-employed persons/independent professions (typically smaller practices), the medical sector is top ranked by most of the banks and includes pharmacists, medical doctors, dentists and veterinary doctors. The top-ranked micro sub-segments comprise just two non-healthcare related professions: the lawyers/attorneys/ notaries group and agriculture. In reality, various micro sub-segment clients generate above-average profit for banks being categorized as private individual clients, however, in CEE, this habit is linked to tax morals and compliance behavior. The correlation between private and business needs and profitability will be analyzed in more detail in the cross-segment offering section of this study.
MICRO STRATEGIES – ELABORATING SEGMENTATION AND SERVICE MODEL 19 Beyond this general ranking, micro sub-segmentation shows some country specifics. For example in Russia and Ukraine, micro sub-segmentation is not yet applied, while certain low-ranked segments may have a particular emphasis in selected countries, such as tourism and HoReCa in Croatia. Micro segmentation can result in a multitude of sub-segment specific offers. Service level is the targeted differentiator while today sub-segment specific offers mainly utilize product and price The commonly used way of targeting are products tailored according to the perceived sub-segment specialties. As shown in figure 10, the service level is less customized to the targeted sub-segment although in positioning, it was by far the most important differentiator. All interviewed bank representatives stated that they did not want to start a price war. At the same time, their tailor-made products are often provided with highly attractive conditions. Segmentation of the heterogeneous micros is in use for three main reasons in most of the observed banks: for their 1. Different profit and volume potential, Micros are so heterogeneous that first the real target groups have to be selected carefully considering the bank's specialties 2. Different risk and 3. Potential to differentiate service level (and service cost).
Page 1: RETAIL BANKING IN CEE EXPLOITING OP
Page 5: PREFACE 3 PREFACE EFMA AND ROLAND B
Page 8 and 9: 6 SUMMARY OF KEY FINDINGS SUMMARY O
Page 11 and 12: 9 PART I IMPORTANCE OF MICRO BUSINE
Page 13 and 14: IMPORTANCE OF MICRO BUSINESS - HIGH
Page 15: IMPORTANCE OF MICRO BUSINESS - HIGH
Page 18 and 19: 16 MICRO STRATEGIES - ELABORATING S
Page 29 and 30: 27 PART III RISK MANAGEMENT - MANAG
Page 31: RISK MANAGEMENT - MANAGING RISK COS
Page 34 and 35: 32 CROSS-SEGMENT OFFERING - UTILIZI
Page 41 and 42: 39 PART V SUMMARY - RECOMMENDATIONS
Page 43 and 44: SUMMARY - RECOMMENDATIONS FOR "MICR
Page 45: METHODOLOGY AND SCOPE OF THE STUDY
Page 49: 47 Many thanks to the following per

Retail Banking in CEE: Exploiting the Potential of ... - Roland Berger

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