Beginning in January 2007 the German insurance company ALLIANZ will send bank clerks (of the Dresdner Bank, which was acquired in 2001) as an experiment to 100 agent offices. Customers of the insurance company will be able to get banking accounts, credit cards, personal loans as well as saving and investment schemes. These future “banking agent offices” will be operated by self employed agents. Customer will have a single stop in order to get insurances, financial services or to use the ATM. At the beginning of this experiment the salary for the bank clerk will financed by the Dresdner Bank.

This experiment is part of certain measures to strengthen the integration of Dresdner Bank into the insurance company. According to some statements by the CEO of ALLIANZ, the insurance company was able to win 360.000 new customers for the Dresdner Bank within the customer base of the insurance company in 2006.

This is a very interesting strategy, but various factors will make or break this concept.

Positive aspects.

• In general we can see a small trend within retail banking business to extend the number of branches in order to serve customers more personally. (It is also possible to identify an alignment of the different business concepts, e.g. branch networks focus on direct banking activities and “Internet banks” invest in their sales force activities or even establish branches in very good locations.) But a large branch network means to accept fix cost. Integration retail banking services into existing agent offices would extend the network of Dresdner Bank while simultaneously keeping low fix costs.
• Since the personal consulting service should be a core competence of both branch retail banks and of financial sales organisations (e.g. ALLIANZ agents’ offices) this approach tries to leverage this competence factor.
• The presentation of both companies in the same place and the personal contact by a real bank clerk should increase the chances to transfer customers of the insurance company to the retail bank. In general cross-selling activities and a “cross-selling customer care”-approach should be easier.
• The ALLIANZ has got a strong brand; this approach make it a little bit more physical for potential customers and can demonstrate the acquisition benefits for customers, in particular for potential retail banking customers. (Remark: After its acquisition of the “Dresdner Bank” the insurance company “Allianz” had planned a brand changes (“Allianz Bank”) but then decided to keep the original brand. However the known slogan “with the green bond of sympathy” was abolished.)

Before looking at potential success factors we have to consider that this attempt is a reaction to existing barriers, too. It is said that Allianz Agents did not sell banking products or did sell them just hesitantly. Only certain measures (someone would could those “force”) could convince the agents to sell credit cards and current accounts. That can be described as a bad indicator for the future management of these “banking agent offices”.
Key success factors – Focus on standardized products and services: Only products that require less explanations and which allow a standardized consulting phase in a certain time frame are appropriate for this kind of banking agent offices. But: Particularly so called standardized products (e.g. housing financing of an owner-occupied apartment) cannot be differentiated in terms of function in the long run. Through this the customer gets the possibility of comparing the product range of different banks. Hence other factors will have an impact, too: Reliability, reachability, returns and (of course!) qualification.

Reliability focus: Banking services still have to fulfill this criterion. It is banking! There is a small, but important difference between selling insurances and selling current accounts. In terms of insurance contracts the sales agent knows a specific PART of customer’s life. Running your current account and operating your saving scheme means to know nearly everything about your financial status. We know from various studies that reliability plays a major role for customers, not matter whether customers bank online or via a branch network. Therefore I have small doubts about this concept. The other way around, which we can find in so called “universal banks”, works: Bank clerks sell insurance contracts. Of course, this ALLINANZ-concept will increase the reachability of banking services to customers. Hence it should attract new customers, which focus on personal contact / customer consulting with “their” bank clerk. Hence the human capital in general and the qualification profile in particular will have a huge impact. Other retail banks (e.g. savings banks and credit co-operatives), which have less employee turnover in their branches, have shown how a good customer-bank relationship can be established.

But the return situation of these “banking agent offices” will finally decide about the success of this concept. It has to be considered that routine jobs within retail banking are also transfers, customer demands and cash transactions….and not just receiving/selling a new business contract, which is better for the agent in terms of provisions. That business problem indicates, why savings banks and credit co-operatives reduced the number of their branches in the last decade.