Bank cross-selling is a strategy where a bank offers a range of services to existing customers, building on the pre-existing relationship. Customers benefit from the convenience of getting all their financial services from one trusted partner. Examples include car loans, savings accounts, and credit cards. Banks must comply with sales and business regulations to protect both parties.
Bank cross-selling is a strategy that allows the institution to offer a broader range of banking services and products to its customers. The general idea is that if a client goes to the bank for a service, the ability to satisfy other needs at some future time is established thanks to that pre-existing relationship. When the bank’s cross-selling is at its best, the bank has to work less to sell those additional services, thanks to the relationship established with existing customers. Customers benefit because they can get what they need from a partner they already know and trust.
One of the most typical examples of bank cross-selling involves the decision of a customer with a checking or savings account choosing to approach the bank for another desirable financial service. For example, instead of using dealer financing to buy a new car, the customer can approach the bank to apply for a car loan. Under the best of circumstances, the bank can accommodate the customer and offer a higher interest rate than dealer financing. The customer benefits by securing financing at a lower personal cost, while the bank benefits from that customer’s additional business.
Other financial services may also be obtained as a result of the bank’s cross-selling efforts. Customers can seek the bank’s help in setting up children’s savings accounts, setting up trust accounts, or even obtaining a credit card offered through the bank’s auspices. Ancillary services, such as electronic funds transfers, letters of credit, and a variety of other options, are also often extended to customers who already have a relationship with the bank. In each scenario, the basis for the activity is the positive relationship that already exists between the customer and the bank, and the willingness of both parties to expand the scope of that relationship.
Bank cross-selling must be done in accordance with sales and business regulations that apply to the jurisdiction in which the bank resides. Complying with those regulations is in the best interests of both the client and the bank, since the rights and responsibilities of each party are clearly defined and the best interests of both parties are protected by those regulations. In practical terms, this means that banks cannot use sales tactics to encourage consumers to use services that do not fit their current financial circumstances, and banks are not required to extend certain services to customers who present a number of unacceptable risk.
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