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Case Study

Rabobank – building on domestic and business banking relationships in the Dutch market

Rabobank is an AAA rated co-operative bank with 5 million retail customers and a very strong local presence evidenced by approximately 1500 branches. In 1995 Rabobank was the first to introduce Internet banking, and today holds the largest number of Internet bank accounts in Europe. The Dutch banking market has learned that customers are usually unwilling to change from a trusted brand to a new bank, and this places certain limitations on the strategic choices that are available to banking institutions. In practice, this means that a large number of financial institutions opt for a customer penetration strategy, thus devoting resources to their existing customer base. A combination of this strategy of penetration, and what Treacy and Wiersema (1996) call customer intimacy, has proven to be a very successful aspect of the strategy of Rabobank, one of the top three banks in the Netherlands.
Rabobank has concentrated on being physically close to customers through both the Internet and a physical branch network. Cross-selling of mortgage and savings products to current-account customers has allowed Rabobank to become a market leader in retail banking. Similarly, the removal of restrictions on bancassurance in 1990 provided further opportunity for Rabobank to expand the range of services offered to its established customers.
Rabobank’s success is not limited to personal markets. Management built on the bank’s traditional strengths in agricultural markets and expanded into the non-agricultural small and medium-sized enterprise market. Rabobank now has 21 per cent of the small business market in the Netherlands, and is making solid progress with cross-selling and up-selling to their existing customers. To support the range of services offered to medium and larger companies, Rabobank has built an international network of branch offices, strategic alliances and acquisitions to ensure that the bank can offer a comprehensive service to customers operating internationally.