Shopping for St George

A look at the online activity of the bank shows whether or not it is a worthy acquisition

By Sandra Hanchard 

The culture of strong customer service at St George Bank has been cited as a positive factor in the takeover bid by Westpac. But how does St George Bank shape up online and what does it offer in terms of visitor demographics in an acquisition? Westpac CEO Gail Kelly says that the merger will create ‘’a springboard for growth with strong brands, leading products and an extensive distribution network’’.  Hitwise data offers insights into the brand strengths of Westpac and St George, as well as their online services and customer acquisition strategies.

Competitive landscape

Commentator fears about competition after the merger could be justified. The dominance of the big four banks is clearly reflected online. The corporate and Internet banking websites of Commonwealth Bank, Westpac, ANZ and National Australia Bank collectively accounted for 60 per cent market share of visits in the Hitwise banks and financial institutions industry in April 2008.

St George Bank was the next institution of choice online. St George Bank’s corporate website ranked at ninth position with 2.46 per cent share of visits; its Internet banking website ranked at tenth position with 2.18 per cent share.

Other major players online included Suncorp, Bendigo, Bank of Queensland, ING Direct and BankWest whose Internet properties together accounted for just over 10 per cent share of visits in April 2008. The remaining share of the category was widely dispersed amongst second-tier institutions, credit unions and brokers.

Brand strength indicators
One of the questions of a potential merger is whether the St George Bank brand will be retained. Hitwise data indicates that St George Bank has a very strong online brand presence, with searches for ‘st george bank’ ranked seventh in driving visits to the Hitwise banks and financial institutions industry, for the four weeks ending 31 May 2008.

Consumer search for ‘st george bank’ was however eclipsed by ‘westpac’. The Westpac brand topped the category and accounted significantly for 4.25 per cent volume of searches in the same time period. Search variations on ‘westpac’ - providing an indication of the number of products, services and general news items associated with the brand - were also 6.5 times higher than ‘st george bank’ for the week ending 31 May 2008.

Awareness of the St George Bank brand was bolstered by acquisition talks; searches for ‘st george bank shares price’ appeared amongst the bank’s top search variations. It is interesting also to note that searches for ‘st george bank Internet banking’ ranked fifth, ahead of searches for ‘st george bank branches’ at ninth, highlighting the importance of the online channel in St George Bank’s distribution strategy.

Some of the significant product search terms driving traffic to St George Bank included, ‘home loan calculator’, ‘car loan calculator’ and ‘no fee credit card’.

Traffic lead sources
A comparison between the key traffic drivers to Westpac and St George Bank indicates similar online acquisition strategies. Search engines were responsible for about one in five visits to each website in April 2008. Traffic from email services and social networking and forums was virtually identical; each industry accounting for over six per cent of visits to both Westpac and St George Bank. One differentiator in traffic was from portal frontpages, which accounted for 15.6 per cent of Westpac’s traffic, compared to 12.9 per cent for St George Bank in April 2008.

Westpac and St George Bank attracted similar rates of new visitors to websites. The Hitwise new and returning visitor report indicates that Westpac attracted 16 per cent of its traffic from new visitors in a 30-day window in April 2008, compared to 15 per cent to St George Bank. Differences in lead sources to each bank were identified amongst third-party websites. Property aggregator realestate.com.au was a significant referrer of new traffic to St George Bank, while automotive classifieds website drive.com.au was a source of new visitor leads to Westpac.

St George Bank audience profile
One commentator on the acquisition noted that, it’s like a land grab - a one-off chance to buy a whole pile of customers. Visitors to the St George Bank website are certainly from an attractive demographic. Households from Hitwise lifestyle mosaic group “young ambition” – educated and high-earning young singles in the inner suburbs, were 86 per cent more likely than the population average to visit the St George Bank corporate website. Given their high disposable income and low credit risk, they can potentially be upsold into lending and wealth management products.

The audience profile and brand profile of St George Bank make it an obvious acquisition target. Preserving the online strengths of St George Bank will be another factor to consider in a merger.

Sandra Hanchard is a research analyst with Hitwise Asia Pacific