The success the big four banks have had in cross-selling their superannuation products to banking customers is concerning and might not be in the clients' best interest, according to ME Bank chief executive officer Jamie McPhee.
McPhee's comments come after Roy Morgan research found industry super funds and AMP Group have had very little success in cross-selling banking products to their superannuation customers.
According to the research report, only 1.6 per cent of industry super fund members bank with ME Bank, while 2.7 per cent of personal AMP super fund members deal with AMP Bank.
On the other hand, Westpac and CBA managed to cross-sell their banking products to 60 per cent of their super fund members, while this figure for ANZ and NAB is slightly lower at 45 per cent and 35 per cent respectively.
McPhee said these figures were largely unsurprising, highlighting the reverse trend which was much more concerning.
"Australia's banking landscape has for a long time been dominated by the big four, currently holding more than 80 per cent of the market, so it naturally follows that a higher proportion of most super funds' members will bank with one of them," McPhee said.
"However, that some of the big four have been able to cross-sell super to their existing customers is of biggest concern, specifically for the retirement plans of those customers."
McPhee said retail super funds were operated to benefit their shareholders, were typically more expensive and underperformed industry super funds over the long term.
Around 97 per cent of ME Bank's customers are industry super fund members. The bank is getting much better at cross-selling, with the number of products per customer increasing to 2.4 during the last financial year, McPhee said.
"We're a challenger bank with a unique growth strategy that's showing signs of success. Our customer numbers grew 12 per cent last Financial Year, while home loan sales were up 17 per cent and retail deposits were up 27 per cent."
