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Marketing of Financial Services

The document discusses various types of financial products and services offered in the market including deposit products, loan products, retail banking products, insurance products, mutual fund products, and other financial services. It explains key features of financial services like low barriers to entry, speed to market, and lack of exclusivity. Quality control and differentiating service is highlighted as the biggest challenge for financial services given their intangible nature.

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Jaideep Rupal
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34 views

Marketing of Financial Services

The document discusses various types of financial products and services offered in the market including deposit products, loan products, retail banking products, insurance products, mutual fund products, and other financial services. It explains key features of financial services like low barriers to entry, speed to market, and lack of exclusivity. Quality control and differentiating service is highlighted as the biggest challenge for financial services given their intangible nature.

Uploaded by

Jaideep Rupal
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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MARKETING OF FINANCIAL SERVICES

Module I
Introduction
l GROWTH OF SERVICE SECTOR ECONOMY
 We are living in a service era
 Service sectors account for 70% of employment opportunities
 Economies dominated by Service Sector
 Rising contribution of service sector to GDP an indicator of development
Amity Business Schoo
 Rapid evolution of new services

l DEFINITION
“A service is any act or performance that one can offer to the other. It is essentially intangible
and does not result in the ownership of anything. Its production may or may not be tied to a
physical product”

TYPES OF SERVICES

 Pure stand alone services


o -counseling, consultancy , nursing.

 Combination of service and goods


o -restaurants, retail stores

 Service as a component of goods


 -after sales service of home appliances

Products or services
Financial Services as PRODUCTS
 Separability–production of many financial products can be separated from their
consumption –checking account, debit cards
 Lack of Perishability–unlike a dinner reservation, a credit card will be there when a
customer wants it; its supply can be adjusted as per demand
 Mass Production –while many financial services are individualised, others can be mass
produced and mass marketed –insurance policies, data analysis systems

Financial Services as
Services

 Financial Services ‘Products’ are not entirely products, because


they contain an important service element which remains intangible.
Features of Financial Services
 Low cost of entry – few barriers to creating/copying some of
the financial services.
 Speed to market – idea is the product
 Lack of exclusivity– because of few protections and low
entry cost –2 in 1 bank accounts/balanced mutual funds
Service is what
it is all about
 Product differentiation is difficult in financial services
 Additional value has to come from somewhere other than the
product itself
 Service is always the major differentiator
 Quality control is possible for products in manufacturing process
 With a service, quality is added(or not) by the people who the
service or manage the clients
 Thus controlling service quality is the biggest challenge

Financial Products
 Every one wants to save some money for future needs and unforeseen circumstances
 After saving, the question crops up :
 What do I do with the money saved until I need it -where do I
keep it?

 Either, one can just keep it at some safe place or invest it to earn and grow
the savings
 The instruments of investment of savings form one part of financial
products/ services.
 Examples : Bank & Post Office Deposit Accounts, Equity Shares, Debt

Instruments( Bonds/Debentures) Mutual Funds, ULIPs etc..
 What do you do, if there is a need to spend, but you don’t have the
money?
 Borrow money from someone –take a loan
 Loans and financing options form the other part of financial
products/services
 Examples: Personal Loans(consumer finance –auto loans, housing
loans,otherEMI based purchases, credit cards etc…)
 Business Loans( term loans, cash credit facility, overdrafts etc…)
Banking Products & Services
Deposit Products
o Saving Deposits/Accounts
o Current Deposits/Accounts
o Fixed Deposits
o Recurring Deposits
o Hybrid/Flexi Deposits

o Loan Products & Other Products

--) Fund Based Credit Facilities


 Working Capital Finance
 Cash Credit
 Overdraft
 Demand Loan
 Bills Purchased/Discounted

 Term Loans/ Project Finance

 Non Fund Credit Facilities


 Letter Of Credit
 Bank Guarantee

Retail Banking Products


Channels of Retail Banking Services
o ATMs
o Telebanking
o Internet Banking

o Retail Banking Products


 Home Loans
 Auto Loans
 Consumer Durable Loans
 Personal Unsecured Loans
 Education Loans
 Credit / Debit Cards

Insurance Products & Services


Life Insurance
o Term Policy
o Whole Life Policy
o Endowment
o Annuities
o Unit Linked Policy
o Group Life Insurance

General Insurance
o Fire.
o Marine.
o Motor/Accident.
o Health/Medical.
o Liability.

Mutual Fund Products & Services


Products/Funds
o Equity Funds.
o Bond/Debt/Income Funds.
o Hybrid Funds.
o Money Market/ Liquid Funds.

Options/Plans
o Growth/Dividend/Reinvestment
o Systematic Investment.
o Systematic Withdrawal
o Switching
o Gifts

Other Financial Services


o Leasing
o Hire –purchase Finance
o Factoring & Forfaitting
o Bills Discounting
o Housing Finance
o Venture Capital Financing
o Merchant Banking & Other Fee Based Advisory Financial Services

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