Professional Documents
Culture Documents
INDEX
SR.
NO.
DESCRIPTION
Pg no.
Executive summary
1.
2.
3.
4.
5.
6.
Meaning of Marketing
7.
8.
9.
10.
11.
12.
13.
Market Segmentation
14.
15.
16.
17.
18.
Technology in Banking
19.
20.
Case study
21.
22.
23.
Conclusion
24.
Refrences
Bank Marketing
Bank Marketing
DEFINITION OF BANK
According to Oxford English Dictionary, Bank is, An establishment for
custody of money received from or on behalf of, its customers. Its
essential duty is the payment of the orders given on it by the
customers, its profit mainly from the investment of money left unused
by them.
Banking Regulation Act, 1949 (Sec. 5(c)), has defined the banking
company as, Banking Company means any company which
transacts business of banking in India. According to Section 5B,
banking means the accepting of deposit of money from the public for
Bank Marketing
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2015
Service quality
Maintaining profitability
Service Quality
Regional Economy
Operations/systems/technology
Cost
Management
reduction
Productivity improvement
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Capital adequacy
Asset/liability management
Electronic Banking
Industry Overcapacity
When this gateway system was first proposed, access to the Internet
was very new and few banks had the resources and knowledge to set
up their own direct-access lines for customers. Customers have
shown a growing interest in online banking services, and banks have
responded by quickly putting in place proprietary sites on the World
Wide Web and offering PC banking.
Within the next five years, 93 percent of community bank executives
surveyed say they plan to offer telephone banking, and 79 percent
plan to offer PC banking.
When asked which technology holds the most potential for the future,
bank executives identified call centers first. As customers continue
the transition the transition into a high-tech world in which they want
information and answers more quickly and accurately than ever
before, call centers offer the ideal bridge. With 24-hour access to
either automated information or live operators, customers do
everything from check their accounts to apply for a loan. Bank
executives also identified PC banking as having the most promise for
the future, followed by Interest access and broad function kiosks.
Bank Marketing
credit
and
miscellaneous
banking
activities.
The
issues.
recommending
Narasimham
internal
autonomy
Committee
long
with
Reports
while
compliance
with
Bank Marketing
MARKETING CONCEPTS
Its application to Banking, When we apply marketing to the banking
industry, the bank marketing strategy can be said to include the
following
i)
ii)
iii)
Planning for each of the source markets & each of the use
markets (A Bank needs to be doubly market oriented it
has to attract funds as well as were of funds & services.
iv)
BANK MARKETING
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2)
3)
4)
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6)
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the Indian public sector banks, though ultimately the Chief Executive
is responsible for the total marketing function. Hence, the total
marketing function involves the following:
a) Market research
future
financial
market
i.e.
appropriate
products
to
meet
activities
and
i.e.,
promotional
Bank Marketing
After enquiring with all the public and 14 private sector banks whether
they had undertaken any market research studies. The following
board areas of market research were considered for the study:
(a) New service development,
(b) New service product acceptance,
(c) Research and development of existing financial service,
(d) Bank images study,
(e) Measuring banks advertising effectiveness,
(f) Measurement of market potentials,
(g) Market research of competitive service products,
(h) Customers opinion study,
(i) Customer profile study, and
(j) Market share analysis.
In response to the inquiry information was received from 17 banks.
Out of these banks, 14 are public sector banks and 3 are private
sector banks. Two nationalized banks and two private sector banks
informed that they have not conducted any markets research studies.
Information regarding Bankwise Market Research Studies
Bank
1. Allahabad Bank
report
2. Bank of Baroda
prepared.
b. Marketing of deposits and MP
allied
services
residents
12
to
Ranade:
customers
Bank Marketing
3. Canara Bank
opinion (1958)
a. Marketing research study For internal use
for
two
new
deposit only
schemes (1989)
4. Central Bank of a. Market survey of customer Conducted
India
services
by
the students of
b. Marketing
deposits BITS,
(Customers)
Pilani.
service
(1986)
5. Indian Overseas a. Potential areas for future For internal use
Bank
business expansion
only
6. Oriental Bank of a. Study of customer service R
Upendran
Commerce
in
OBC
with
reference to metropolitan
7. Punjab
Bank
branches (1989)
National a. Sample
survey
customers
responses only
(1987)
b. Sample
survey
on only
Formal Report
loan
(1982)
8. Punjab and Sind a. Study
Bank
on
turnover
scheme
customer For internal use
(mail only
their
accounts) J S Kalra:
(1989)
BMP Thesis
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and
Sind
Customers
Banks
and
their
expectorations, a survey
9. State
Bank
Bikaner
10. Syndicate
Bank
expectations (1998)
a. Evaluation Study on the For internal use
quality of customer service only
(1989)
b. Marketing of bank service K M Kanath
with special reference to BMP Thesis
branches in Bombay city
of
11.
Syndicate
Bank-
India
12. UCO Bank
only
For internal use
only
branch (1979)
a. Report of the customer
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INCREASING
IMPORTANCE
OF
MARKETING
IN
BANKING INDUSTRY
The various other factors which have led to the increasing importance
of marketing in the banking industry are categorized as follows:
Government Initiatives
The Indian economy embarked on the process of economic reform
and various policy measures initiated by the government resulted in
the
increasing
competition
in
the
banking
industry, thereby
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the boom in the mass media have important implications for the retail
banker. He needs to be conscious of the fact the increasing
proportion of people are aware of financial service and are, therefore
demanding and expecting higher quality services.
Increasing Urbanization, Education and Awareness: The higher
literacy level, migration to urban areas and higher awareness due to
the boom in the mass media have important implications for the retail
banker. He needs to be conscious of the fact the increasing
proportion of people are aware of financial service and are, therefore
demanding and expecting higher quality services.
Decline in Traditional Indian Values (Borrowing as Taboo), Rising
Consumerism, Rise in the Percentage of Working Women.
Technology Development
Modernization of Technology has facilitated the introduction of new
banking services as to attract new customers. An example of this is
the Automated Teller Machines or the facility of Any Time Money.
Also in foreign countries, banks are experimenting with money
transmission at Point of sale, e.g., petrol station linked with banking
network.
Credit is Easier to Obtain
Growing Importance of Non-Banking Financial Institutions: Fixed
Deposits being offered by the NBFCs are very attractive for the
public, because of the wide gap of interest rates offered by banks on
term deposits and that offered by the NBCSs. further, they offer a
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funds
is
reducing
the
importance
of
banks
as
ii.
iii.
Planning for each of the source markets and each of the user
markets (A bank needs to be doubly market oriented its has
to attract funds as well as users of funds and services).
iv.
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19
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Small
Industries
and
20
Small
Business
Segment,
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21
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22
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Some of the women are housewives and therefore they have different
need and requirements whereas some of them are working ladies
having different needs and requirements.
In the profession segments, we find different categories of
professions an therefore we find a change in their needs and
requirements.
therefore
the
banking
organizations
expectations.
24
should
know
their
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all
the
organizations
25
are
to
get
tremendous
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the use of technology would be a minus point, and you dont have any
excuse for your faults.
PRODUCT PORTFOLIO: The bank professional while formulating
the product mix need to assign due weightage to the product portfolio.
By the concept product portfolio, emphasis is on including the
different types of services/ schemes found at the different stages of
the product life cycle. The portfolio denotes a combination or an
assortment of different types of products generating more or less in
proportion to their demand. The quality of product portfolio determines
the magnitude of success. It is excellence of bank professionals that
help them in having a sound product portfolio.
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This is with the motto of stimulating the new and old customers. An
important thing in the very context is the changing needs and
requirements of customers/prospects. The bank professionals bean
outstanding task of studying the competitors strategies which would
he them in initiating the process of innovation. Here it is important to
mention the promotional incentives to the customers would focus on
decisions related to the selection of a tool. There are a number of
considerations to streamline the process. The bank professionals are
supposed to study the market conditions and make necessary
suggestions, specially regarding the incentives.
It is a blending process and bank professional have to be sure the
whatever the provisions, they make are fulfilled on priority basis. More
incentives more efficiency or a vice-versa conditions more efficiency,
more-incentives motivate bankers substantially.
Word-of-Mouth Promotion: Much communication about the banking
services actually take place by word-of-mouth information which is
also known as word-of-mouth promotion. In the banking industry, we
find use of different components of promotion and in the context it is
essential that we also talk about word-of-mouth communication which
makes the process of influencing the prospects effective by
sensitizing the word-of-mouth recommendations. The persons
engaged in communication, the hidden salesforce who play an
incremental role in increasing the demand. An important question
regarding the word-of-mouth communication is related to its intensity
of sensitizing the persuasion process.
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The RBI has to be more liberal so that the public sector commercial
banks make decisions in the face of changing business conditions.
There is no doubt in it that the commercial banks bear the
responsibility of energizing the social marketing, they are also
supposed to bear the social costs. It is also right that the foreign
banks have been found making the business environment more
competitive. These emerging trends necessitate a close look on the
pricing problem. The policy makers find it difficult to bring a change
since the regulations of the RBI make things more critical. The
expenses are not regulated by the RBI and the banking organizations
are forced to increase the budgetary provisions. The sources of
revenue are regulated which complicates the task of bank
professionals. This makes it essential that the Reserve Bank of India,
the Government of India and the banking organizations thing over this
complicated issue with a new vision.
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THE PEOPLE
Sophisticated technologies, no doubt, inject life and strength to our
efficiency but the instrumentality of sophisticated technologies start
turning sour if the human resources are not managed in a right
fashion. Generation of efficiency is substantially influenced by the
quality of human resources. It is against this background that a
majority of the management experts make a strong advocacy in
favour of developing quality people and late, the people management
has been include dint he marketing mix of organizations is general
and the service generating organizations in particular.
Not only the public sector commercial banks but almost all the public
sector organization and albeit other government departments, of late,
have been facing the problem of quality people resulting into
inefficiency, deceleration in the rate of overall productivity and
profitability or so. The front-line staff are rough and indecent, the
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branch mangers are helpless and even the bankers have been found
involved in the unfair practices. The public sector commercial banks
need to assign on overriding priority to the development of quality
people majority of the management of the experts have realized the
significance of quality people in the development of an organization
and the boardrooms are also found changing their attitudes. The first
task before the banking organisatoins at the apex level is to overhaul
the recruitment processes. While fixing criteria for selection, they
need to assign due weightge to the ethical values. The education and
training facilities are required to be innovated. The process of
identification and inculcation need to be managed carefully.
The foreign banks and the private sector commercial banks reward
for efficiency and at the same time also demotivate the inefficient
bankers. This helps them in improving the efficiency of even the
inefficient people. The development of human resources makes the
ways for the formation of human capital. Incentives, of course, inject
efficiency and the organizations offering more incentives succeed in
motivating the people.
Having better and cost-effective control over operations.
Enriching the job content of employees at all level (by reducing
the drudgery of mundane operations and increasing the
analytical content of their work).
Improving the quality of decision-making, a must in the fast
changing environment.
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Data
Interchange
(EDI)
for
company-wise
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All the above systems should be client-based systems and not lineof-business systems since these would provide better marketing and
service to clients, facilitate cross-selling and customerization of
schemes and hence, a better packaging for the product. This would
help Indian banks thing customer.
All these would, thus, help in the effective management of time.
Recourse to mechanized systems like ledger posting machine, cash
counting machine and cheque sorting machine would result in
reduction in the number of tedious and routine jobs to be handled
manually saving time for the people to focus on the customer.
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The spread of the bank in Indian rural and semi urban areas are
highly different from state to state and region to region. Many states
have fewer networks of bank branches in the rural areas. Under such
scenario different marketing approach for different areas is required. If
the bank follows the same marketing strategy for all areas the
success would be difficult.
Marketing approach for urban area: The urban areas of India are
developed taking into account all parameters of development. The
level of income of the people, the literacy rate and level of education
as well as awareness of the people about rights of the customer are
higher than that of the rural and even semi urban areas. Thus here for
effective bank marketing different approach is necessary than that of
rural areas.
The marketing strategy should be based on customer service and
the use of modern technology in banking. Under competitive
environment for the success of the business, better customers and
retaining existing customers is possible only with customer service.
Use of modern technology in urban areas will also go long way for
marketing of banking services. Technology based service like credit
card, debit card, ATM, anywhere banking, internet banking, and
mobile banking are necessary for urban areas. This is because it
enables customers to perform banking transactions at their
convenience. Business hours of a bank are also an important factor
for urban banking. India many private sector banks, especially cooperative banks and now even some of the public sector banks have
also started this practice and they find it successful. To attract
business and wholesale customers, banks need to adopt technology
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are suitable for them for getting funds at right time and also they find
convenient to repay. For instance traditional saving bank account may
be given fixed deposit concept that once a particular limit of balance
is reached the funds from saving account is automatically coveted
into fixed deposit attracting higher interest rate.
Banks need t develop some scheme which would attract them to
bank with. For loans and advances products which are suitable to
tarmers, small traders, small scale agro based rural industries are
already in existence. Banks need to see the how value addition can
be mad to these existing scheme. Banks also needs to tie up with
Non Government Organisations and various Self Help Group for
different types of loans, micro financing etc. This will help the bank for
building good image and reputation in the rural areas over and above
the business. Another potential area which can be explored by the
banks in the rural area is retail banking. With the steady increase in
the income of the rural people there is ample scope for retail loan
products like housing loans and loan for consumer durables.
Marketing through customer services in rural areas is different from
that of urban areas. Here personalized banking is the success mantra
for banks. Because of high level of illiteracy people prefer to
undertake banking transaction themselves. They hesitate to depend
upon technology based service. For effective marketing in rural areas
bank should have staff with right soft skill like concern for customers
problem, positive attitude, good communication and negotiation skill.
At every level of dealing with the customer bank need to educate
them for banking activates and process. To attract the customers from
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Conclusion:
Banking sector has undergone various changes after the new
economics
policy
based
on
privatization,
globalization
and
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TECHNOLOGY IN BANKING
Technology is proving to be a vital tool in enhancing banking activities
around the globe. The advent of ATMs, and Internet Banking are key
pointers to this. The role of an information system can in no way be
underestimated. The expanding role of information systems have
aided banks achieving Anytime, Anywhere and Anyhow banking. The
improvement in telecommunication infrastructure is redefining the
was banking is being conducted.
Information Technology made its presence felt in banks in India a few
decades ago. However, it is still being used as a support systems.
Most of the software packages used in bank work on stand-alone
systems and are not integrated.
Banks in India need to have an integrated systems that takes care of
all the front-office and back-office operations. However, Indian banks
should not be content with the integration of their activities. Banks in
advanced countries are planning to have global electronic banking.
Electronic banking or e-Banking is a generic name for a range of
technologies that allow the electronic exchange of information related
to banking transactions.
As Electronic Networks become more robust and widespread, they
are beginning to attract the attention of retail banks like ATMs and
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In the case of UTI Bank, the ATMs have added a fillip to the banks
customer base. Says V K Ramani, president for IT at UTI Bank,
Form the first year of ATM installation, we have seen a surge in our
customer base. Currently, we have 647 ATMs servicing a base of 1.3
million customers. Over 90 percent of cash withdrawals are done
through ATMs. The number of ATM transactions have also increased
from one million in September 2001 to over 2.5 million in September
2002. With growth figures like this, its no wonder that every branch
manager wants an ATM installed in his area of operations.
Alok Shende, Industry manager for IT practice at Frost & Sullivan,
summarieses the evolution of the Indian banking industry perfectly
when he says, Banks followed two broad approaches when adopting
technology. The first approach was evolutionary. Banking players who
had large brick and mortar legacy particularly the public sector banks,
kept the banking channels intact and automated the bottleneck
points. This approach was adopted by around 80 percent of the
industry. However, some banks adopted a revolutionary approach and
changed the banking scenario altogether. State Bank of India is a
good example of the evolutionary approach, whereas HDFC Bank
and ICICI Bank, are good examples of the revolutionary approach.
Some banks have gone a step ahead and share their ATMs with
other banks. For instance, ABN Amro Bank has a private ATM sharing
agreement with UTI Bank.
Banks are also developing new strategies to leverage their ATM
outlets. For instance, rather than set up a branch in every suburb,
ICICI Bank has hit upon a ratio of 8 ATMs to one branch office, thus
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India are hoping that just as ATMs saw a period of inaction before
they were accepted by Indian masses, Internet banking too would be
adopted once customers are comfortable with the technology. For
instance, in 1998 India had just 500 ATMs today it has close to 7,500.
Roadblocks
While Internet banking is a potential and powerful delivery channel, it
has failed to make a significant impact due to a variety of reasons.
RBI in its report, Trend and progress of Banking in India, 2001-02,
says Internet banking has failed to take off due to a combination of
psychological, technological and socio-economic factors. Further, the
report
states
that
additional
hurdles
relating
to
legal
and
MOBILE BANKING
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Whats M-Banking?
M-Banking allows a customer to request for account balance, cheque
books, cheque status, demand drafts, and bankers cheques as well
as stop payments, make fixed deposits enquiry and transfer bills
online. HDFC customers, for instance, can pay their Max Touch and
BPL Mobile both provide cellular services Bombay State Electricity
Supply, and Maharashtra State Electricity Board bills. Says Shyamlal
Saxena, 33, Vice President (Liabilities Product Management), HDFC:
WE are, in a sense, content providers of banking information.
Is it Better?
M-banking is no different from Net Banking, in fact it has many
limitation. You still cannot transfer fund from one bank to another and,
given the high air-time charges, it works out much more expensive
than Net Banking. And for the mobile phone to access a site, the
contents must be in Wireless Markup Language.
Once the mobile users population grows, access rates will fall,
allowing customers to use more air-time. By then, the Reserve Bank
of India would also have put its own gateway in place to do online
what it does today on paper.
M-banking uses two kinds of communication technologies. One is
WAP (Wireless application Protocal) and the other is SMS (Short
Messaging Services). WAP is more user-friendly, as it allows
download of graphic information. SMS, in contrast, allows text-only
access. But as the time taken to download text is much les compared
to graphics, SMS is cheaper to use.
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Who knows, the next time you go to deposit your cheque, you just
might fill in 'Virtual' in the space reserved for 'Branch.
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synchronisation
of
performance-orientation
and
employee
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used; more & more banks are outsourcing services like disbursement
and servicing of consumer loans, Credit card business. Direct Selling
Agents (DSAs) of various Banks go out and sell their products. They
make house calls to get the application form filled in properly and also
take your passport-sized photo. Home banking has already become
common, where you ~an order a draft or cash over phone/internet
and have it delivered horn. ICICI bank was the first among the new
private banks to launch its net banking service, called Infinity. It allows
the user to access account information over a secure line, request
cheque books and stop payment, and even transfer funds between
ICICI Bank accounts. Citibank has been offering net banking to its
Suvidha program to customers.
Products like debit cards, flexi deposits, ATM cards, personal loans
including consumer loans, housing loans and vehicle loans have
been introduced by a number of banks.
Corporates are also deriving benefit from the increased variety of
products and competition among the banks. Certificates of deposit,
Commercial papers, non-convertible Debentures (NCDs) that can be
traded in the secondary market are gaining popularity. Recently,
market has also seen major developments in treasury advisory
services. With the introduction of Rupee floating rates for deposits as
well as advances, products like interest rate swaps and forward rate
agreements for foreign exchange, risk management products like
forward contract, option contract, currency swap are offered by almost
every authorised dealer bank in the market. The list is growing.
Public Sector Banks like SBI have also started focusing on this area.
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CASE STUDY
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