And also insurance: this is cross-selling
01/07/2025
Cross-selling is a business strategy that banks use to offer additional products or services to their own customers. With it, they seek to respond to all the financial needs of their customers and, in this way, gain value. A customer who has a checking account may receive an offer from their bank to take out a credit card, home insurance or pension plan.
Cross-selling can be offered at the time of contracting other financial products, and according to the obligation of their signature, they are called combined and linked products.
Combined products are those that the entity offers jointly from linked to a main one with more advantageous conditions, but that it can also offer individually. For example, a monthly fee with better conditions if a loan and insurance are contracted together whose signing is not mandatory.
Linked products, however, are contractually linked to a main product, i.e. it is mandatory to accept them together. This practice is strictly regulated, especially in the field of mortgage loans, where, with exceptions, it is prohibited so as not to limit the freedom of the consumer.
In Spain, banks can offer combined sales, such as a mortgage with a reduced interest rate if the customer also contracts other products, such as life insurance, home insurance or a credit card. However, the client has the option of contracting only the mortgage, although in that case the interest rate will be higher. On the other hand, if the bank requires payment protection insurance to be taken out in order to grant the loan, it will be considered a tied sale. In this case, the customer will be obliged to take out the insurance, but the bank must admit that it can be purchased with an insurer of their choice.
Cross-selling is a tool that banks use to expand their relationship with customers and improve their profitability. Although they can be beneficial for both parties, it is essential that the consumer has all the information and makes conscious decisions.
Understanding the difference between these concepts allows users to protect their rights, optimize their relationship with the bank and avoid unnecessary commitments. It is always advisable to carefully read the pre-contractual information, compare offers and assess whether the additional products really add value to our personal situation.
“Disclaimer: Please note that this is a translation of the original in Spanish that has been obtained using eTranslation (the machine translation tool provided by the European Commission), with the intention of giving you a basic idea of the content in English until a human translation becomes available. The Banco de España accepts no liability whatsoever in connection with this translation.”
