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08/09/2014 Banking Innovation

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Advertising efforts instead of interest payments

Innovation presentation

0% Car Loan is the first no fee, interest-free consumer loan available on the European market. During the two years that Bawag PSK ran the campaign, it improved its market share from 6.5% to more than 8.7%.

0% Car Loan was run as a temporary promotion in conjunction with the consumer loan product KreditBox Schnell, which allows customers to take out a loan in less than ten minutes.

Inspired by Google, which offers free products to its customers, Bawag PSK created the loan so that instead of paying interest or fees, customers simply agreed to carry Bawag PSK’s branding on their car during the loan period. This equates to approximately €8,000 in advertising value per year per car.

To appeal to consumers in Austria – many of whom are environmentally conscious – Bawag PSK only made the loan available for cars that produce no more than 136g/km in CO2 emissions.

TV advertising around the campaign ended up having twice as much impact as adverts from financial competitors. A number of newspapers also wrote about the 0% Car Loan. The result was that Bawag PSK earned €12 for every €1 it spent on advertising.

- Total consumer loan sales volumes increased by 55% in 2013

- In the same year, Bawag PSK’s market share in new business increased from less than 9% to an average of 13%

- Bawag PSK enhanced its portfolio volume in a shrinking market

- After two campaigns, 1,200 cars had Bawag PSK branding on them.

Uniqueness of the project

• Instead of charging interest, Bawag PSK gets customers to carry branding on their cars

• A community of car owners have been established that proactively recommend Bawag PSK’s loan service

• Consumers can take out a loan in just ten minutes

• Bawag PSK only made the loan available for cars that produce no more than 136g/km in CO2 emissions.

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