Abstract
Finaccord' s report titled Affinity and Partnership Marketing in UK Credit
Cards and Personal Loans represents the most detailed research ever undertaken
on this sector and is one of seven studies in a new series of publications.
Drawing on the results of a survey of 2,500 organisations, the report analyses
the penetration, operating models and partner market shares of affinity and
partnership marketing schemes for credit cards and personal loans across a
range of distributor categories.
These include airlines, automotive manufacturers, charities, educational
institutions, football clubs, Internet, media and telecoms entities, on-line
aggregators and brokers, professional associations, retailers and trade
unions. Moreover, the PartnerBASE™ database that accompanies the report
provides the granular detail behind the analysis, detailing each of the more
than 650 affinity and partnership marketing initiatives traced by Finaccord in
this sector.
You may be able to use this report and associated PartnerBASE™ database
in one or more of the following ways:
- drill down into the detail lying behind affinity and partnership marketing
schemes for credit cards and personal loans in the UK;
- gain access to research that chronicles the vast majority of affinity
marketing opportunities in credit cards and personal loans;
- benchmark the competitive position of your own organisation in affinity and
partnership marketing of credit cards and personal loans and spot
opportunities for displacing rivals;
- gain a wider perspective from learning about recent innovations in
partnership marketing of banking products in continental Europe and Ireland;
- plan your future affinity and partnership marketing strategy for credit
cards and personal loans armed with the best market and competitor
intelligence available on this subject.
Table of Contents
0.0 EXECUTIVE SUMMARY
- Research background and structure
- A wide range of partner organisations are involved in schemes for affinity
or co-branded cards
- The majority of issuers active in this area are focusing on a small number
of major partnerships
- … although MBNA' s approach is oriented towards managing a large
number of small programs
- The comp. to promote personal loans through affinity and other partners is
highly fragmented
- … with Lloyds TSB, mainly thanks to Black Horse Finance,
identifiable as the leading partner
- Both Barclaycard and GE Money have adapted well to the changing market for
co-branded cards
- The agg. and price comparison channel offers a major challenge to
providers of affinity loans
- There is scope for banking institutions in the UK to draw inspiration from
continental Europe
1.0 INTRODUCTION
- Finaccord
- UK affinity and partnership marketing publications
- Other UK consumer research publications
- PartnerBASE™
- Definitions
- Rationale
- The channels used to distribute financial products and services in the UK
continue to proliferate
- … with on-line affinity and partnership marketing having growing
rapidly in importance of late
- Methodology
2.0 MARKET OVERVIEW
- Affinities and partnerships in UK credit cards and personal loans
- Finaccord' s research identifies 400 current affinity schemes for promoting
credit cards
- … with MBNA' s operating model oriented towards managing a large
number of card programs
- … while other issuers are preferring to focus on a relatively small
number of major partnerships
- Personal loans are marketed by at least a proportion of 24 affinity and
partner sub-categories
- … with the competition for partnerships fragmenting among a variety
of types of provider
3.0 NOT-FOR-PROFIT AFFINITY GROUPS
- 3.1 Charities
- Introduction
- Analysis of partnerships
- The competitive structure of the UK charity card market has changed
substantially
- Few charities have organised formal affinity lending propositions for
their supporters
- intune' s main target market is the affluent over-50 age group served by
Saga
- … and the company is interested in working with suppliers that
fulfil a variety of criteria
- intune is employing a multi-channel distribution strategy including the
charity' s high street outlets
- … as it seeks to reach an operating profit of £15 million
per annum by 2012
- 3.2 Educational institutions
- Introduction
- Analysis of partnerships
- Affinity and partnership marketing through educational institutions
focuses on three main areas
- A significant number of educational institutions have discontinued
affinity cards in recent times
- 3.3 Professional associations
- Introduction
- Over 50 professional associations possess in excess of 5,000 individual
members
- Analysis of partnerships
- American Express has cherry-picked the affinity card offered by the
British Medical Association
- In many cases, brokers can unlock the door for lenders targeting
professional associations
- … with Parliament Hill having expanded its roster of member
benefits clients to 11 associations
- A further five entities each claim to more than one deal in the
professional association segment
- FIRSTPLUS Financial provides loans to the members of the Navy, Army and
Air Force Institutes
- 3.4 Sports organisations
- Introduction
- Analysis of partnerships
- MBNA accounts for the majority of affinity cards issued in partnership
with sports organisations
- 3.5 Trade associations
- Introduction
- Analysis of partnerships
- Trade associations play virtually no part in the distribution of
personal loans and credit cards
- 3.6 Trade unions
- Introduction
- Analysis of partnerships
- HBOS controls the majority of relationships primarily by virtue of its
central deal with the TUC
- … while LV= is the leading supplier of personal loans to the
members of trade unions
- 3.7 Other not-for-profit affinity groups
- Introduction
- Lifestyle organisations
- Four lifestyle organisations continue to promote an affinity card to
members
- Political parties
- … with a similar number of political parties offering affinity
cards or loans
4.0 FINANCIAL PARTNERS
- 4.1 Banks
- Introduction
- Analysis of partnerships
- Abbey has reverted to managing its own credit card business having
previously used MBNA
- Customers who fail to qualify for a standard loan are often referred to
credit broking partners
- 4.2 Building societies
- Introduction
- Analysis of partnerships
- Four entities are active in the market for affinity credit cards issued
through building societies
- The Britannia promotes both its own loans and also car finance products
sourced from Freeway
- 4.3 Credit unions
- Introduction
- At least two credit unions are distributing the pre-paid Argos Acard to
their members
- 4.4 Friendly societies
- Introduction
- Analysis of partnerships
- LV= has switched management of its credit card from its own banking
division to Goldfish Bank
- 4.5 Insurance companies
- Introduction
- Analysis of partnerships
- Among insurance companies, only NFU Mutual and Norwich Union offer
white-labelled loans
- 4.6 On-line aggregators and brokers
- Introduction
- Analysis of partnerships
- Moneysupermarket.com and The Motley Fool have each established
significant partnerships
- … for the provision of searching facilities for both credit cards
and personal loans
- 4.7 Specialised lenders
5.0 COMMERCIAL ENTITIES
- 5.1 Airlines
- Introduction
- Analysis of partnerships
- Ryanair drops MBNA in favour of GE Capital Bank while flybe chooses
LaSer UK
- 5.2 Automotive associations
- Introduction
- Analysis of partnerships
- Morgan Stanley' s Goldfish issues affinity cards on behalf of both the
Caravan Club and csma
- 5.3 Automotive dealers, repair shops and supermarkets
- Introduction
- Analysis of partnerships
- Many automotive dealerships owe their survival to revenues derived from
financial services
- … and a majority of firms in this category have created
group-wide finance and leasing deals
- 5.4 Automotive manufacturers
- Introduction
- Analysis of partnerships
- The card developed by American Express and BMW is a significant new move
in this sector
- The new products are designed to re-enforce customer loyalty to the BMW
brand
- BMW' s affinity marketing partners were selected for three main reasons
- All but a small number of niche or motor cycle brands have established
official finance schemes
- Fiat Auto Financial Services and GMAC are now classifiable as joint
venture companies
- 5.5 Cricket and rugby clubs
- Introduction
- Analysis of partnerships
- Only Bank of Ireland disturbs MBNA' s dominance in the cricket and rugby
club affinity card sector
- Through its Black and White Connections concept, Hull R.F.C. offers
consumer finance options
- 5.6 Football clubs
- Introduction
- Analysis of partnerships
- MBNA continues to be the dominant force in the market for football club
affinity cards
- … although Barclaycard plays a trump card by means of its
successful Premiership Card
- Few football clubs have elected to endorse a specific provider in the
field of personal loans
- … although Zebra Finance claims to be ‘recognised and
endorsed’ by around 30 clubs in total
- 5.7 Internet, media and telecoms entities
- Introduction
- Analysis of partnerships
- The market segments between traditional affinity cards and credit card
searching facilities
- Five providers have established more than one on-line credit card
searching deal each
- A number of factors motivated the launch of the SkyCard by Barclaycard
and BSkyB
- … and the program fits well with the issuer' s wider strategy of
focusing on ‘blockbuster’ deals
- The two partners are aiming for 20% penetration within the relevant
customer base by 2010
- Moneysupermarket.com and Moneyexpert.com account for a majority of media
affinities
- … although AWD Moneyextra is one of a number of players that is
also exploring this arena
- 5.8 On-line price comparison providers
- Introduction
- Analysis of partnerships
- A number of on-line price comparison providers offer own-brand credit
card searching facilities
- … with a similar number also having initiated activities in the
field of personal loans
- 5.9 Retailers
- Introduction
- Analysis of partnerships
- Over a third of major retailers in the UK have introduced their own
co-branded or store cards
- GE Capital Bank is the leading specialist issuer of retailer cards in
the UK market
- HSBC has significantly strengthened its competitive position in the
retailer card market
- … and the card issuing divisions of several other banks also lay
claim to notable relationships
- Citibank entered the sector in 2007 by means of a co-branded card
developed with Shell
- GE Capital Bank has engineered an impressive re-positioning of the ASDA
co-branded card
- … with the result that the majority of the card' s key metrics
have improved dramatically
- The majority of retailers that offer point-of-sale finance work with a
single, external partner
- Lloyds TSB' s Black Horse Finance lays claim to the highest number of
exclusive relationships
- … although competition for retailer mandates is offered by a
further six main finance providers
- A single, exclusive retailer partnership can be attributed to each of
four lending institutions
- 5.10 Travel companies
- Introduction
- Analysis of partnerships
- Excluding airlines, very few travel companies have developed co-branded
credit cards
- … although the launch of the OnePulse Card in July 2007 adds up
to an innovative development
- 5.11 Other commercial entities
- Introduction
- Branded conglomerates
- Saga and Virgin leverage their brands across the full consumer financial
services spectrum
- … with Saga having switched its co-branded credit card to AIB
towards the end of 2007
- Loyalty schemes
- The loyalty schemes category extends to a range of diverse travel and
other reward programs
- … with several offering members the chance to earn points through
taking out personal loans
- … and with six schemes having developed or re-launched
fully-fledged co-branded credit cards
- AIRMILES reconfigures its affinity strategy by forging a new link with
Lloyds TSB
- Delivering memorable experiences continues to be key to the AIRMILES
proposition
- Lloyds TSB hopes to leverage the relationship across a range of
financial services
- AIRMILES has bolstered its range of family-oriented redemption options
- … and is also in the process of rolling out a policy asserting
its ‘green’ credentials
- The Post Office
- The Post Office has extended its financial services joint venture with
Bank of Ireland to 2020
6.0 EUROPEAN INNOVATIONS
- Introduction
- Events in affinity and partnership marketing in Europe, 2006 and 2007
- Winter 2006
- Citibank unveils new affinity marketing ventures in Belgium and the Czech
Republic
- UBS launches Swiss charity card with Optimus Foundation
- Banque Accord' s Oney.fr links with on-line hi-tech retailing specialist in
France
- Bank of Ireland ties with La Caixa for Irish consumers buying property in
Spain
- BPU Banca launches InItaly immigrant financial services proposition
- CreditPlus Bank signs distribution deal with Bertelsmann book club in
Germany
- Deutsche Postbank targets lawyers through legal publishing affinity card
- American Express unveils new bank partnerships in Romania and Russia
- Cetelem forms consumer finance joint venture with French building firm
- San Paolo IMI and Veneto Banca tie up commercial affinity group deals in
Italy
- Spring 2006
- CC Bank and Lidl tie for credit card with petrol discount offer in Germany
- ABN AMRO creates partnership with Dorpspunt to grow rural penetration
- Fiditalia and leading technology distributor tie for consumer finance and
card proposition
- Banque Accord and Norauto extend collaboration to private label card
- American Express enters Bosnia-Herzegovina through card issuing deal with
CFU
- Grupo Santander initiates affinity banking link with parliamentary
association
- Through AUTOSCOUT24, Volkswagen secures on-line partner for financial
services
- Banca Intesa and eBay collaborate to target over 500,000 Italian SMEs
- LaSer introduces new affinity cards with automotive repair centre and
football club
- Millennium BCP seals affinity link with economists' institute in Portugal
- CIC establishes tie with OSEO for start-up and small business loans in
France
- Juventus and Banca Popolare Italiana launch pre-paid Kalibra card
- Summer 2006
- Citibank rolls out new airline co-branded credit cards in the Czech
Republic and Hungary
- American Express expands network of banking partners to Serbia and Slovakia
- CGD creates affinity banking deal with Portuguese economists
- Finaref introduces private label card in association with
Téléshopping
- Banca Intesa works with local authority for mortgage designed for
temporary workers
- GE Money Bank ties for on-line finance deal with German arm of Fujitsu
Siemens
- Crédit Agricole links for European automotive finance joint venture
with Fiat
- Groupe Caisse d' Epargne and Carige forge Italian consumer credit joint
venture
- Autumn 2006
- Citibank rolls out new co-branded cards in Greece and Sweden
- Commerzbank launches co-branded card with Steigenberger Hotel Group
- Through GCE Fidélisation, Caisses d' Epargne signs up to S' Miles
loyalty scheme
- HSBC ties with Banco Sabadell unit to serve UK nationals residing in Spain
- Fortis and An Post finalise details of Irish financial services joint
venture
- Rabobank and WNF unveil green affinity credit card in the Netherlands
- MLP forges affinity financial services link with association of dental
students in Germany
- Winter 2007
- Citibank launches new co-branded credit cards in Greece and Hungary
- Landesbank Berlin links with Amazon for co-branded card in Germany
- BBVA' s Barceló Viajes Visa credit card amasses 60,000 clients since
launch
- Santander rolls out affinity banking strategy for affluent foreign
nationals
- Banco Sygma forges loan distribution link with Spanish insurer
- Spring 2007
- LaSer Group initiates a trio of new affinity ventures in France and the
Netherlands
- GE Money Bank and Kia partner for automotive finance joint venture in
Germany
- Citibank and Shell introduce co-branded card in Denmark
- Deutsche Bank ties with pharmacy chain for German consumer credit venture
- Landesbank Berlin introduces two new co-branded cards with media affinities
- UEFA EURO 2008 MasterCard launched by UBS in Switzerland
- Crédit Agricole and OSEO strengthen partnership to serve French SMEs
- Summer 2007
- CGD introduces co-branded card in association with MTV for Portuguese youth
- … inspired by Caja Madrid' s successful program with the same
partner in Spain
- Caja Madrid launches Aquí-Allá debit card for immigrant
market in Spain
- Finaref introduces Madelios private label card with single outlet retailer
in France
- BNP Paribas ties with nine regional mutual insurers serving students
- Citibank launches Russian travel co-branded card through link with Kuda.ru
travel agency
- … and ties with EKO Natural Gas for affinity loans in Greece
- Monte dei Paschi di Siena renews link with Enel to encourage solar power
systems
- Agos and Piaggio form relationship for branded motor cycle finance in Italy
- Banesto concludes affinity financial services partnership with UNICEF in
Spain
- CreditPlus Bank links with T-Online for Internet lending initiative in
Germany
- Commerzbank creates on-line marketing tie with German arm of eBay
- Landesbank Berlin introduces new co-branding schemes with media affinities
- GE Money Bank launches new credit card with leading German technology
retailer
- MLP and Interhyp establish mortgage joint venture in Germany
- Autumn 2007
- LaSer reinforces co-branding activity in France through launch of flagship
card
- BNP Paribas and Orange combine for co-branded card in deregulated French
market
- Go Sport France selects Finaref as partner for financial services
development
- American Express secures Kazakh and Lithuanian bank partnerships
- Citibank introduces new co-branded card with prominent Belgian electricals
retailer
- BNL and Intesa Sanpaolo enter into affinity lending deals for Italian
pensioners
- Santander ties with Portuguese SME trade association for affinity banking
package
- Nordea acquires Stockmann financial services business and targets
international expansion
- Bankinter assumes control of Capital One joint venture with 290,000
customers
- Fiditalia and Zurich launch new revolving co-branded credit card in Italy
- Hypovereinsbank' s FC Bayern SparKarte exceeds 150,000 cards in circulation
- BAWAG PSK injects new momentum into post office bank through a raft of
innovations
GRAPHICS / TABLES
- The affinity and partnership marketing universe
- Entities contacted for the research, segmented by broad category
- Affinity and partnership marketing schemes for accident insurance in the
UK: penetration by type of partner
- Affinity and partnership marketing schemes for accident ins. in the UK:
segmentation by op. model and comp
- Affinity and partnership marketing schemes for health insurance in the UK:
penetration by type of partner
- Affinity and partnership marketing schemes for health ins. in the UK:
segment. by op. model and competitor
- Charities offering credit cards: penetration, operating models and partner
market shares
- Charities offering personal loans through partnerships
- Educational institutions offering credit cards: penetration, operating
models and partner market shares
- Ranking of professional associations in the UK by actual or approximate
number of members
- Ranking of professional associations in the UK by actual or approximate
number of members (continued)
- Professional associations offering credit cards: penetration, operating
models and partner market shares
- Sports organisations offering credit cards: penetration, operating models
and partner market shares
- Sports organisations offering personal loans through partnerships
- Ranking of the top 50 trade associations in the UK by actual or
approximate number of members
- Trade associations offering credit cards through partnerships
- Ranking of trade unions in the UK by actual or approximate number of
members
- Trade unions offering credit cards: penetration, operating models and
partner market shares
- Trade unions offering personal loans: penetration, operating models and
partner market shares
- Lifestyle organisations offering credit cards and personal loans through
partnerships
- Political parties offering credit cards and personal loans through
partnerships
- Banks offering credit cards: penetration, operating models and partner
market shares
- Banks offering personal loans through partnerships
- Building societies offering credit cards: penetration, operating models
and partner market shares
- Friendly societies offering credit cards through partnerships
- Insurance companies offering personal loans through partnerships
- On-line aggregators and brokers offering credit cards: penetration,
operating models and partner market shares
- On-line aggregators and brokers offering personal loans: penetration, op.
models and partner market shares
- Specialised lenders offering personal loans through partnerships
- Airlines offering credit cards: penetration, operating models and partner
market shares
- Automotive associations offering credit cards and personal loans through
partnerships
- Auto. dealers, repair shops and supermarkets offering personal loans:
pen., op. models and partner mkt. shares
- Automotive manufacturers offering credit cards: penetration, operating
models and partner market shares
- Automotive manufacturers offering personal loans: penetration, operating
models and partner market shares
- Cricket and rugby clubs offering credit cards: penetration, operating
models and partner market shares
- Cricket and rugby clubs offering personal loans through partnerships
- Football clubs offering credit cards: penetration, operating models and
partner market shares
- Football clubs offering personal loans: penetration, operating models and
partner market shares
- Internet, media and telecoms entities offering credit cards: penetration,
op. models and partner market shares
- Internet, media and telecoms ents. offering personal loans: penetration,
op. models and partner market shares
- On-line price comparison providers offering credit cards: penetration, op.
models and partner market shares
- On-line price comparison providers offering personal loans: penetration,
op. models and partner market shares
- Retailers offering credit / store cards: penetration, operating models and
partner market shares
- Retailers offering personal loans / consumer finance: penetration,
operating models and partner market shares
- Travel companies offering credit cards through partnerships
- Branded conglomerates offering credit cards and personal loans through
partnerships
- Loyalty schemes offering credit cards and personal loans through
partnerships
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