Bank Marketing

Bank Marketing
Marketing of Banking Services
• The concept of marketing of banking services

is of recent origin. It is only during 1950s
banks came to accept the marketing concept
for bank services.
• Bank marketing is the aggregate of functions
directed at providing services to satisfy
customers’ financial needs and wants more
efficiently and effectively than the competitors
in consonance with the organisational
objectives.
Bank Marketing Objectives
• In this stage it is fruitful to have a discussion on the objectives
of Bank
• Marketing. The basic objectives of marketing are applicable in
the case of bank marketing also. They are:
• • Maximising the profitability
• • Providing high return to investors
• • Development of an image and reputation and
• • Developing new products to meet emerging customer
requirements.
Some specific objectives of bank marketing
are:
• increase in deposits
• increase in loans
• diversification of products and
• directing customers to specific products
Roadmap to achieve marketing objectives in
banking sectors
1. analysis of the customer behaviour, attitudes and
market segmentation.
2. market research to collect, investigate analyse and
interpret customers’ attitudes and market
developments to contribute to the maximum
attainment of objectives.
3. development of new products and/or services
4. advertising, publicity and promotion
5 . pricing
6. defining strategies, administering and
controlling the marketing programme
7. forecasting changing customer profiles and
consequent product changes.
Mission and Objectives of Bank Marketing
Mission Statement
• Financial service
• Market penetration
• Customer base
Illustrative Marketing Objectives (app.)
• Income growth: 8%
• Target new customer increase: 5%
• Increase product and service sale of existing customers: 3%
• Increase return on investment:10%
• Reduce bank cost: 3%
• Increase customer satisfaction: 2%
Bank Marketing Plan
• Written document that summarizes the observation of a

market behaviour.
• Defines marketing strategy.
• Identifies market place.
• Suggests strategy of the bank to reach its marketing
objectives.
Development of Marketing Plan
• Understanding of the environment in which the bank is

functioning.
• Identify variables that will influence the bank functions.
• Analyzis of environment
- Micro
- Macro
- Internal
CHALLENGES FACED BY INDIAN BANKING INDUSTRY
1. Asset quality
banking system has remained resilient, asset quality has
seen sustained pressure due to continued economic
slowdown. The levels of gross non-performing
advances (GNPAs) and net NPAs (NNPAs) for the
system have been elevated. As per preliminary data
received at RBI for March 15, 2018, while the
GNPAs have increased to 4.45% for the system as a
whole, the NNPAs have also climbed up to 2.36%.
2. Capital adequacy of banks
Concerns have been raised about the ability of our
banks to raise additional capital to support their
business.
Higher level of capital adequacy is needed due to
higher provisioning requirements resulting from
deterioration in asset quality, kicking in of the Basel
III Capital norms, capital required to cover additional
risk areas under the risk based supervision
framework,.
The poor valuations of bank stocks, especially the PSBs,
are not helping matters either, as raising equity has
become difficult.
3. Human resource issues
• All banks, including those in the private sector, are
witnessing high attrition rates, giving rise to resource
gaps.
• The banks need to continuously enhance the skill
levels of their employees so as to remain viable and
competitive and to take advantage of new
opportunities.
• The banking industry has transformed rapidly in the
last ten years, shifting from transactional and
customer service-oriented to an increasingly
aggressive environment, where competition for
revenue is on top priority.
4. Revision to the priority sector lending guidelines
• There is also readjustment in some sub-targets,

whereby the banks are now required to progressively
achieve 8% of lending to Small and Marginal Farmers
and 7.5% to the micro enterprises among the MSEs
in a phased manner.
• Lending to a few new sub-sectors like renewable
energy, social infrastructure and to the medium
enterprises would now be treated as priority sector
lending.
5. Globalization of regulation-making process
• There is a process for peer review of

regulatory guidelines issued by various
jurisdictions to ascertain compliance with the
global standards, failure to adhere to which
would render the jurisdiction non-compliant
to the standards
6. Technology and its impact
• Traditional businesses are slowly moving on-

line and e-commerce is the preferred choice
of the gen-next customer. The challenge
before the PSBs is to upscale their capabilities,
train their employees on the new technologies
to benefit from the possibilities that adoption
of technology can open up.
7. Treating customers fairly
• Protection of bank customers has been one of the
thrust areas for RBI in recent times. As you may be
aware, RBI has issued a Charter of Customer Rights
based on the global best practices. The Charter
comprises of following five rights:
• Right to Fair Treatment
• Right to Transparency, Fair and Honest Dealing
• Right to Suitability
• Right to Privacy  Right to Grievances Redress and
Compensation
9. Risk management
• Risk is inevitable in the banking business and

hence, a sound risk management framework is
the touchstone of an efficient bank. The risk
management effectively aims at balancing the
Risk-Return Trade-off which is "maximizing
return for a given risk" and "minimizing risk for
a given return".
10. Financial Inclusion
• Financial inclusion means that individuals and

businesses have access to useful and
affordable financial products and services that meet
their needs – transactions, payments, savings, credit
and insurance – delivered in a responsible and
sustainable way.
• Dev (2006) stated that financial inclusion is
significant from the point of view of living conditions
of poor people, farmers, rural non-farm enterprises
and other vulnerable groups.
11. Social and Ethical Aspects
• There are some banks, which proactively

undertake the responsibility to bear the social
and ethical aspects of banking. This is a
challenge for commercial banks to consider
these aspects in their working.
• Apart from profit maximization, commercial
banks are supposed to support those
organizations, which have some social
concerns.
Internal Analysis of Banks
Systems :
• Branches
• Call centres
• ATMs access
• Business units: retail banking, insurance, investment
units
• Computing systems
Information Dissemination :
• Personal customers
• Software
• Information support services
Internal Analysis of Banks
Customers:
• Focus on deposit accounts
• Focus on personal loans
• Focus on corporate loans
• Focus on investment
• Focus on banking services

Marketing Mix for Banks
• Product / Service:
• Credit card account
• Fund transfer process
• Guarantee of services
• Corporate risk management services
• Price / Cost:
• Preferential interest rates
• Competitive deposit rate
• Promotion:
• Above the line and below the line techniques
• Travel magazines
• Travel agent’s websites
• Popular TV channels
• Place:
• Wider coverage of branches
• Rural bank office branches
• ATM machines
• Internet banking
• People:
• Skilled staff of the bank
• Training programmes
• Process:
• Accounts can be opened through all the banking channels
• Social responsible on the credit limit
• Visibility:
• Visibility of the branches and the bank logo
• Team of professional staff members
Trends of marketing strategies in Indian banking
1. Advertising remains the undisputed promotional tool

for banks so far among the other promotional tools.
Advertising, which includes direct mail, accounted for

the largest share of marketing expenditures at 52
percent, compared to 58 percent in 2007. Public
relations accounted for 27 percent of marketing
budgets compared to 21 percent in 2007
• 2. Consumer expectations are growing. With
the increase in the education of the
consumers, they are now demanding more
and more value added services and are ready
to pay premium for it. Eg. Net banking, Forex,
term loan, PMJDY.
• 3. Mobile banking is the need for today. It has
become the blessing for the consumers who don’t
have the time to visit the bank personally.
The biggest advantage that mobile banking offers to
banks is that it drastically cuts down the costs of
providing service to the customers. Also service
providers are increasingly using the complexity of
their supported mobile banking services to attract
new customers and retain old ones.
• 4. Social media is also a tool for marketing the
banking services. Forty percent of banks used social
media for marketing purposes in 2018. Twenty-nine
percent used social networking (i.e., Face book,
Twitter, etc.).
• Face book, used by 76% of banks, is the most popular
among various social media outlets, followed by
Twitter at 37%. The main reasons for using social
media were for communication and competitiveness.
• 6. Marketing expenditure has witnessed the
tremendous growth in last few years as the
percentage of total banking expenditure. Despite the
overall state of the economy and the banking
industry, marketing expenditures were up in 2017.
Nearly 60 percent of banks said they planned to
increase their marketing expenditures in 2018, the
same amount as in 2017. Most of the banks view
marketing as a strategic driver for their business.
• 7. Focus on Incremental New Customer
Growth: Instead of generating as many
accounts as possible, banks will be focusing on
the potential value of relationships including
the likelihood of engagement and retention.
• 8. Value added service: with advent of ICT
desire result can be achieved when email is
combined with more value added services like
insurance, credit card, term loan etc.

Bank Marketing

Uploaded by

Copyright:

Available Formats

Bank Marketing

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Bank Marketing

Uploaded by

Copyright:

Available Formats

Bank Marketing

Marketing of Banking Services

• The concept of marketing of banking services

Illustrative Marketing Objectives (app.)

• Written document that summarizes the observation of a

• Understanding of the environment in which the bank is

• There is also readjustment in some sub-targets,

• There is a process for peer review of

• Traditional businesses are slowly moving on-

• Risk is inevitable in the banking business and

• Financial inclusion means that individuals and

• There are some banks, which proactively

• Focus on deposit accounts

• Focus on personal loans

• Focus on corporate loans

• Focus on banking services

1. Advertising remains the undisputed promotional tool

Advertising, which includes direct mail, accounted for

You might also like