Consumer durables giant General Electric is preparing to travel further down the lucrative road of retail banking, unifying its financial services brand on a worldwide basis to offer products such as mortgages and personal loans directly to customers in forty countries.
The move will be a challenge. GE Consumer Finance has yet to display a personal touch, 85% of its lending to date being business-to-business via retailers rather than direct to consumer.
However, it has already acquired relevant risk management experience through retail financing, which it hopes will enable successful targeting of mortgages and credit to a particular breed of customer in competitive UK and US markets – those just falling short of reaching prime credit ratings.
In the relatively calmer European and Asian markets, GE hopes to apply the consumer finance model to small businesses and savings, but stresses it will avoid a "cookie-cutter approach" to lending.
Analysts and competitors view the new venture in a largely favourable light. Although acknowledging GE's reputation is in domestic appliances rather than financial services, Deloitte Touche's head of banking and finance James Reicbach foresees a rosy future: "GE is well placed to expand in consumer finance. It has low funding costs and has shown it can run financial services businesses very efficiently."
Data sourced from: Financial Times; additional content by WARC staff