Your SlideShare is downloading. ×
0
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Marketing of financial products
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Marketing of financial products

6,453

Published on

Published in: Education
1 Comment
3 Likes
Statistics
Notes
No Downloads
Views
Total Views
6,453
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
255
Comments
1
Likes
3
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. “ Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks. Services offered include: savings and checking accounts, mortgage loans, personal loans, debit cards, credit cards etc.”
  • 2. <ul><li>Retail banking sector is characterized by three basic characteristics: </li></ul><ul><li>Multiple products (deposits, credit cards, insurance, investments and securities) </li></ul><ul><li>Multiple channels of distribution (call center, branch, internet) </li></ul><ul><li>Multiple customer groups (consumer, small business, and corporate). </li></ul>
  • 3. <ul><li>HSBC First Bank to Introduce ATM: 1987 </li></ul><ul><li>Companies Came with IPO </li></ul><ul><li>New Technology : EDI, EFT helped mass Banking, </li></ul><ul><li>Completion from NBFCs </li></ul>
  • 4. <ul><li>Higher Interest Rates </li></ul><ul><li>Low Risk of NPAs </li></ul><ul><li>Relationship Not the Sole means Of Growth </li></ul><ul><li>Need For publicity </li></ul><ul><li>Sensitivity To Pricing </li></ul><ul><li>Volume Based Strategy </li></ul><ul><li>Freebies For Customers </li></ul>
  • 5. <ul><li>Changing Demographics </li></ul><ul><li>Technological Advancements </li></ul><ul><li>Lower NPAs </li></ul><ul><li>Liquidity In Banking System </li></ul>
  • 6. <ul><li>Liability Products </li></ul><ul><li>Savings accounts </li></ul><ul><li>No-frills accounts </li></ul><ul><li>Current accounts </li></ul><ul><li>Fixed deposits/ Term deposits </li></ul><ul><li>Recurring deposits </li></ul>
  • 7. <ul><li>2. Asset products </li></ul><ul><li>Housing loans </li></ul><ul><li>Personal loans </li></ul><ul><li>Education loans </li></ul><ul><li>Gold loans </li></ul><ul><li>Loans to senior citizens </li></ul><ul><li>Property and mortgage loans </li></ul><ul><li>Vehicle loans </li></ul><ul><li>Agriculture loans </li></ul>
  • 8. <ul><li>3 . Credit cards/ Debit cards </li></ul><ul><li>Credit cards </li></ul><ul><li>Debit cards </li></ul><ul><li>4. Investment products </li></ul><ul><li>Insurance products </li></ul><ul><li>Pension plans </li></ul><ul><li>Mutual funds </li></ul>
  • 9. <ul><li>Associated with a liability on the bank’s side </li></ul><ul><li>According to RBI’s guidelines of KYC(Know your customer), the bank segregates their customer into different risk categories </li></ul><ul><li>Documentation requirements to open an account change with the risk profile </li></ul><ul><li>In India, customer deposit accounts are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) </li></ul>
  • 10. <ul><li>Allows a customer of the bank to save a small amount of money </li></ul><ul><li>Money can both be deposited and withdrawn from the account </li></ul><ul><li>Withdrawal is done through cheque books or withdrawal forms </li></ul><ul><li>ATM’s have reduced the dependence on traditional withdrawal systems </li></ul><ul><li>Savings money is invested in different avenues and the bank pays an interest on it </li></ul><ul><li>Specially designed savings accounts for children, women etc are a new innovation by the banks </li></ul>
  • 11. <ul><li>A type of savings account with zero-balance or low minimum balance facility </li></ul><ul><li>In 2005, the RBI instructed the bank to introduce such accounts so as to include the poor sections of the society in the financial system as well </li></ul><ul><li>Allahabad Bank and UCO Bank have been providing such account facility for quite some time now </li></ul>
  • 12. <ul><li>Helps the customer to perform multiple transactions in a day </li></ul><ul><li>No interest on the amount deposited in the account </li></ul><ul><li>Include cheque book facility, internet banking etc </li></ul><ul><li>Used to pay rents, utility bills, insurance premiums etc </li></ul>
  • 13. <ul><li>Type of a time deposit </li></ul><ul><li>Deposits a fixed amount for a fixed period of time </li></ul><ul><li>Interest is paid on the money deposited at pre fixed time intervals </li></ul><ul><li>The money can be withdrawn at maturity, but if its withdrawn before that the bank pays less interest </li></ul><ul><li>FD’s many a times also linked with safe deposit locker facility </li></ul>
  • 14. <ul><li>A type of time deposit which allows the customer to save small amounts of money with bank every month </li></ul><ul><li>Aimed at people with high expenditure in a month </li></ul><ul><li>Modest interest paid for the amount saved, quarterly, half yearly or annually </li></ul>
  • 15. <ul><li>An asset is what the bank holds in terms of the credit given to the customer </li></ul><ul><li>Interest rate charged are different for different products </li></ul><ul><li>Fixed interest followed for some products while a floating interest charged for others </li></ul><ul><li>The interest rate varies with the changes in the inter-bank rates like Benchmark Prime Lending Rates </li></ul><ul><li>If there is an increase in the BPLR then the customer has to pay a higher EMI and vice-versa </li></ul><ul><li>In fixed interest rates, the customer is protected against fluctuations in the interest rate </li></ul>
  • 16. <ul><li>These form majority of the asset portfolio for a retail bank </li></ul><ul><li>Given in order to extend financial support to the people who want to construct a house </li></ul><ul><li>The amount extended depends on the expenditure involved and the repaying capacity of the customer </li></ul><ul><li>The repayment period is long term in nature </li></ul>
  • 17. <ul><li>Is given to customers to help them meet personal expenses like marriage, travel etc </li></ul><ul><li>Depends on the customer’s ability to repay and his credibility </li></ul><ul><li>Personal loans given to salaries employees and self employed people </li></ul>
  • 18. <ul><li>One of the most common type of loan extended by the banks </li></ul><ul><li>Under this, property assets like land, buildings, vehicles and gold etc are mortgaged </li></ul><ul><li>Interest rates fixed on the prevailing bank rates </li></ul>
  • 19. <ul><li>Typical products include crop loans, farm equipment loans against warehouse receipts </li></ul><ul><li>Provide loans for horticulture activities, poultry, dairy, rearing of goat and sheep, sericulture etc </li></ul><ul><li>Depends on mortgaging or hypothecation in most loans </li></ul><ul><li>Loan cards have been brought by many banks which can be ATM’s or credit cards </li></ul>
  • 20. <ul><li>Provide loans for purchase for two wheelers, four wheelers and commercial vehicles </li></ul><ul><li>Usually financed up to 85-90% of the total invoice amount </li></ul><ul><li>Repayment is made through equated monthly installments (EMI) </li></ul>
  • 21. <ul><li>In credit cards, the amount is paid to the merchant electronically </li></ul><ul><li>The money is paid by the card user to the bank through EMI’s or in a lump sum amount </li></ul><ul><li>In Debit cards, the amount is deducted from card holder’s account and paid to the merchant </li></ul><ul><li>No interest is paid by the Debit card holder </li></ul><ul><li>Credit cards are very aggressively marketed by bank merchants </li></ul>
  • 22. <ul><li>A fairly new category as compared to asset and liability products </li></ul><ul><li>Includes pension and mutual funds, insurance products etc </li></ul><ul><li>Provides additional liquidity to the bank to invest in other avenues </li></ul><ul><li>These products are also used as tools to retain the customers </li></ul><ul><li>These are mainly cross-sold </li></ul>
  • 23. <ul><li>Innovation in banking </li></ul><ul><li>Affect five areas: operations, media, pricing, delivery and product </li></ul><ul><li>Tool: Customer Knowledge Management </li></ul><ul><li>Helps banks to understand customers better </li></ul><ul><li>Provides insights to what the customer expects </li></ul>
  • 24. <ul><li>Online shoppers: Security of payment </li></ul><ul><li>Cybercrime </li></ul><ul><li>Pre approved loans </li></ul><ul><li>Research and development </li></ul><ul><li>Evaluation of new product ideas, design of plans, implementation, testing for viability and recommending implementation </li></ul>
  • 25. <ul><li>HDFC Bank launched Netsafe virtual card in association with Visa International. </li></ul><ul><li>Safe payment mode </li></ul><ul><li>No need to disclose credit card information </li></ul><ul><li>Net safe enables to realise full value </li></ul><ul><li>Created with a pre defined limit amount </li></ul><ul><li>Can access the card through ID and password. </li></ul>
  • 26. <ul><li>Banks segment customers using different bases. </li></ul><ul><li>HNI classify customers on different parameters. </li></ul><ul><li>NRI’s help in foreign exchange. Common products for this- remittance accounts, NRI deposits and NRI loans. </li></ul><ul><li>Eg- ICICI has tie up with Wells Fargo Bank, HSBC in Hong Kong, Me-Bank in UAE. </li></ul><ul><li>IndusInd Bank launched a product Fast-Remit through a tie up with Bank of New York </li></ul>
  • 27. <ul><li>Corporate banking- discriminatory pricing followed. </li></ul><ul><li>Offer interest rate based on: </li></ul><ul><li>1. Credit rating </li></ul><ul><li>2. Relationship with bank </li></ul><ul><li>3. Bargaining power </li></ul><ul><li>Pricing decisions influenced by- policy changes, bank rate fluctuations, perceived value from customers perspective </li></ul>
  • 28. <ul><li>If demand for asset product is elastic, slight decrease in price, increases demand for the product </li></ul><ul><li>If demand is inelastic slight decrease in price, may not have a significant impact on volume of business. </li></ul><ul><li>Eg- countries UK and US. </li></ul><ul><li>Eg- India: interest on home loan reduced increase in demand. </li></ul><ul><li>Increase in interest rate of fixed deposits leads to increase in demand. </li></ul>
  • 29. <ul><li>Banks free to price their liability products. </li></ul><ul><li>Can decide on the penalties to be charged. </li></ul><ul><li>Eg- in 2005, when there was liquidity crunch in India. </li></ul><ul><li>Banks increased their deposit rates. Thus the net interest margins decreased. </li></ul>
  • 30. <ul><li>As deposit rates started increasing banks raised their lending rates by 100-125 b.p </li></ul><ul><li>As net interest margins started shrinking </li></ul><ul><li>To maintain profitability </li></ul><ul><li>Pricing for HNI’S and NRI’S </li></ul><ul><li>Discriminatory pricing </li></ul><ul><li>Customer analysis and cost analysis </li></ul><ul><li>Eg- loan given at 2% less than the normal rate </li></ul>
  • 31. <ul><li>Overt pricing: charges that banks collects directly from its customer for its product offerings. Eg- usage of ATM- flat fee </li></ul><ul><li>Variable fee- volume and frequency of account information </li></ul><ul><li>Covert pricing: cost which are not explicitly charged to customers against products consumed. </li></ul><ul><li>Eg- the cost incurred by bank recovered by charging a customer higher price. </li></ul><ul><li>Eg- ICICI Bank offer lifetime credit cards for free to get high sales. </li></ul>
  • 32. <ul><li>Pre-Deregulation:- </li></ul><ul><li>- Product-centric Approach, </li></ul><ul><li> - Little emphasis on Market Research, </li></ul><ul><li>Post-Deregulation:- </li></ul><ul><li> - Advertising & Sales Promotion became important </li></ul>
  • 33. <ul><li>Reasons for advertisement in Retail Banking:- </li></ul><ul><ul><li>Services are Intangible, </li></ul></ul><ul><ul><li>Inseparability of Services, </li></ul></ul><ul><ul><li>Heterogeneity of Services, </li></ul></ul><ul><ul><li>Perishability of Services. </li></ul></ul><ul><li>Thus as a part of advertising strategy, retail banks marketers showcase concrete physical evidence, the reputation, and the documentation of service delivery. </li></ul><ul><li>The popular advertising modes in retail banking are:- </li></ul><ul><ul><li>Print Media, the Internet, Outdoor advertisement, Statement insert, Co-branding. </li></ul></ul>
  • 34. <ul><li>Advertising Appeal:- The manner in adv is developed and expressed in anticipation of a specific customer response. </li></ul><ul><li>Types of Appeal: </li></ul><ul><li>Rational Appeal - Informational or logical appeal </li></ul><ul><ul><li>Price appeal, Quality appeal, Features appeal & Competitive appeal. </li></ul></ul><ul><li>Emotional Appeal - Portrays human emotions. </li></ul><ul><ul><li>Humor appeal, Fear appeal, Music appeal, etc </li></ul></ul>
  • 35. <ul><li>Sales Promotion is used to attract new customers by giving offers and incentives. </li></ul><ul><li>Sales Promotion techniques used by Banks:- </li></ul><ul><li>Premiums, Gifts, Cash back offers, discounts, etc. </li></ul>
  • 36. <ul><li>Brand can be a long-term asset, branding of financial institutions is a part of long-term strategy. </li></ul><ul><li>There are various advantages of Brand Building:- </li></ul><ul><li>Wide spread recognition and improved loyalty. </li></ul><ul><li>It decreases the customer acquisition cost. </li></ul><ul><li>Bank can charge premium prices and customer will not hesitate to pay. </li></ul>
  • 37.  
  • 38. <ul><li>Personal Selling is a prominent form of branch level promotion. </li></ul><ul><li>There are two approaches of personal selling:- </li></ul><ul><ul><li>Product Based Approach </li></ul></ul><ul><ul><li>Customer Based approach </li></ul></ul>
  • 39. <ul><li>In Telemarketing information is given to customer on the Telephone. </li></ul><ul><li>40% to 50%(approx) Credit Cards and up to 25% retail loans are sold through telemarketing. </li></ul><ul><li>Negative reactions from customers. </li></ul>
  • 40. <ul><li>It targets specific customer groups. </li></ul><ul><li>Customized presentation. </li></ul><ul><li>Information is provided in an attractive format. </li></ul><ul><li>Direct-Response :- It is a variant of direct mail where a product is first without the full detail being given, interested customers are requested to contact the Bank for full details. </li></ul>
  • 41. <ul><li>In traditional approach Public Relations was considered to be important. </li></ul><ul><li>The new approach has changed the traditional view towards Public Relations, now PR is used as a sophisticated tool to improve image of Banks. </li></ul><ul><li>The main objective of PR is to maintain a consistently positive image in the public. </li></ul>
  • 42. <ul><li>Distribution Channels </li></ul><ul><li>Advantage – </li></ul><ul><li>1. Reduce transaction cost & operating overheads. </li></ul><ul><li>2. Increase reach. </li></ul><ul><li>3. Avenues of promotion for banks products & offerings. </li></ul>
  • 43. <ul><li>Traditional & important. </li></ul><ul><li>Other channels used for transactions. </li></ul><ul><li>Channel that diffrentiates. </li></ul>
  • 44. <ul><li>Deregulation. </li></ul><ul><li>Cost reduction & better service. </li></ul><ul><li>Atm sharing. </li></ul>
  • 45. <ul><li>Which was the first bank to introduce ATM's in India? </li></ul><ul><li>Total no of atms in India ? </li></ul>
  • 46.  
  • 47. <ul><li>Uses. </li></ul><ul><li>Cheapest channel of distribution. </li></ul><ul><li>Penetration rate is low. </li></ul>
  • 48. <ul><li>It provides flexibity & convenience. </li></ul><ul><li>Mobile banking transaction includes use of phone by the customer to debit or credit their accounts. </li></ul><ul><li>Services – Checking account balance, cheque status enquiry, ordering a cheque book, payment of utility bills, transfer of funds. </li></ul>
  • 49. <ul><li>Enables customer to carry out cashless transactions at merchant establishments where invoice amount of goods purchased is debited from customers account & credited to merchant’s bank account. </li></ul><ul><li>Nominal fee. </li></ul><ul><li>Channel became popular with consumer spending & increase in no of debit card holders. </li></ul>
  • 50. <ul><li>DSA’s conducts marketing of financial products on behalf of the bank. </li></ul><ul><li>Banks outsource selling of liability & assets products. </li></ul><ul><li>Banks provide database of customers. </li></ul>
  • 51. <ul><li>This channel is under severe criticism </li></ul><ul><li>Field staff is not well equipped with the information on various products of the bank. </li></ul><ul><li>They may not spend time in understanding customer’s needs. </li></ul><ul><li>Different DSA’s of same bank may keep calling the same customer. </li></ul><ul><li>Customer fears an invasion of their privacy. </li></ul>
  • 52. <ul><li>Inbound call centers - Act as distribution-cum-service delivery channels by taking calls on product enquiries, change of address,complaints. </li></ul><ul><li>Outbound call centers – Used for telemarketing. </li></ul>
  • 53. <ul><li>Financial institutions may form strategic alliances at the corporate level, the scope of which would include sharing the respective distribution networks at the operational level. </li></ul><ul><li>Strategic alliance between Corporation bank , Indian bank & Oriental bank of commerce includes sharing of bank branches & ATM’s, training infrastructure & even people. </li></ul>
  • 54. The strategy of pushing new products to current customers based on their past purchase. Cross-selling is designed to widen the customer reliance on the bank and decrease the likelihood of the customer switching to a competitor.
  • 55. <ul><li>Benefits to Banks </li></ul><ul><li>Reduction in the total cost of acquiring new customers </li></ul><ul><li>Improved customer retention </li></ul><ul><li>Insights that help offer better suited and more customized products </li></ul><ul><li>Enhanced ‘Per Customer Lifetime Profitability’ </li></ul>
  • 56. <ul><li>Benefits to Customers </li></ul><ul><li>Reduced prices </li></ul><ul><li>Faster and easier processing </li></ul><ul><li>Customized product </li></ul>
  • 57. <ul><li>Mindset of the executives in a bank </li></ul><ul><li>Risk of causing customer dissatisfaction </li></ul>
  • 58. <ul><ul><li>Amreen Nathani </li></ul></ul><ul><ul><li>Shivika Nagrath </li></ul></ul><ul><ul><li>Ayushi Jalan </li></ul></ul><ul><ul><li>Pankaj Upadhyay </li></ul></ul><ul><ul><li>Yogesh Suhag </li></ul></ul><ul><ul><li>Krishanu Roy </li></ul></ul>

×