Chapter 1 Introduction
Chapter 1 Introduction
Financial
Services – An
Introduction
CHAPTER 1
Growth of Financial
Services
Issues and
Challenges
THE ROLE OF MARKETING
In the News
Article 1.1
D Q 1 . 1 : V I S I T R B I H A N D S T U DY VA R I O U S P R O J E C T S
TA K E N U P BY T H E M . P R E PA R E A W R I T E - U P O N O N E O F
TH EM A N D P RES EN T I T TO TH E C L A SS .
Course Objectives
Assessment Class
Participation
10%
Discussion
Questions
Yes
(5)
No
Yes
(5)
Between 3-15
No sessions and 31-45
sessions
Developing a Submission is due
Yes Yes after 55 sessions
Project work 10% Financial No No
(5) (5)
Service
Embedded Yes Yes After 30 sessions
Midterm 20% No No
questions (10) (10)
After the
Term End Embedded Yes Yes Yes Yes
50% completion of 60
Exam questions (10) (10) (15) (15)
sessions
Applying Marketing Concepts in
Financial Services
Brand
Segmentation positioning
Marketing Mix
and Targeting and Brand
equity
Critical
Thinking
D Q 1 . 2 : U S I N G YO U R B AC K G R O U N D I N M A R K E T I N G ,
A SS E SS W H I C H C O N C E P T S W I L L B E A P P L I E D I N
E AC H O F T H E T O P I CS U N D E R C R I T I C A L T H I N K I N G .
In the News
Article 1.2
DQ1.3: OUTLINE THE MARKETING
S T R AT E G I E S R E Q U I R E D F O R A G O L D LO A N
P R OV I D E R U S I N G C R I T I C A L T H I N K I N G .
Financial
Services
In the News
Article 1.3
DQ1.3: OUTLINE THE MARKETING
S T R AT E G I E S R E Q U I R E D F O R A G O L D LO A N
P R OV I D E R U S I N G C R I T I C A L T H I N K I N G .
Financial markets
Scope of
Financial
services Financial
institutions
operating in these
markets
14
Equity
Financial
Currency
Markets
Fixed Income
Commodity
derivatives
15
RBI
Financial
Institutions SEBI
in Indian
context
under the IRDA
purview of
PFRDA
16
Commercial Banks
Non-banking financial
Under companies (NBFCs)
RBI
Asset Reconstruction
Companies (ARCs)
17
Commercial
banks
Schedules commercial banks
◦ Public sector banks
◦ Private sector banks
◦ Foreign banks
◦ Urban Co-operative banks
◦ Small Finance banks
◦ Payment banks
18
In the News
Article 1.4
DQ1.4: RECALL THE CONCEPT OF THE SCOPE OF
MARKETING. IDENTIFY THE MARKETING
ENTITY/ENTITIES AND THE DEMAND S TAT E
M E N T I O N E D I N T H E A RT I C L E .
In the News
Article 1.4
D Q 1 . 5 : D E S I G N A P R O M O T I O N A L C A M PA I G N U S I N G
ANY TWO TYPES OF MEDIA OTHER THAN PRINT
M E D I A F O R T H E I SS U E D I S C U SS E D I N T H E A RT I C L E .
What are
differences
between
Banks and
NBFCs?
In the News
Article 1.5
D Q 1 . 6 : C O M PA R E A N D C R I T I C A L LY A N A LY S E T H E
R E P O RT O N T H E N B F C B A N K S P U B L I S H E D BY
P W C A N D A S R E P O RT E D BY N O M U R A .
Member brokers Depository
Exchanges Depositories
and sub-brokers participants
Foreign
Alternative
Mutual funds Institutional Custodial agencies
investment funds
Investors
Portfolio
Distributors for
Under SEBI
Investment Investment mutual funds and
management
bankers advisors other investment
companies
products
Self regulated
organizations
Registrars and Debenture (SROs) such as
transfer agents trustees Association of
Mutual Funds of
India (AMFI)
23
General Health
Under insurance insurance
Insurance companies companies
Regulatory
and Reinsuranc
TPAs e
developmen companies
t Authority
of India Insurance
(IRDAI) brokers
24
Under Pension Fund Regulatory and
Development Authority (PFRDA)
National Pension System (NPS)
Voluntary , defined contribution retirement savings scheme
Institutions
NPS Trust
Central Record Keeping Agency (CRA)
Pension Funds
Trustee Bank
Custodian
Aggregators
Points of presence
Government Nodal Offices
25
Clearing Corporation of India Limited (CCIL)
Set up by major banks and financial institutions with support of the RBI
Manage risks in settlements of transactions in debt, money and forex markets
institutions Primary role is to give credit rating to various debt issuances, this helps
investors to understand the credit risks associated with various debt issuances
developme Primary role is to provide credit related information about the individual
borrowers to lenders and credit card companies
perspective Primary role is to make market and provide liquidity in the Money Market
26
In summary:
coverage of financial services would be
through the following categories
Asset
Consumer banking Institutional Stock broking,
management
(which would banking (including distributors of
companies ( MFs,
include NBFC investment investment
portfolio
products as well) banking) products
managers, AIFs)
Credit rating
Life Insurance General Insurance
agencies
27
The Nature of
Services
SWOT
• Gap analysis (as part of SWOT analysis)
• Gaps in own offerings
• Gaps in competitors’ offerings
Business Strategy
We follow in • Go/No-go
the following
locations, make-vs-buy
• Marketing strategy
• Segmenting customers : choice about method(s) used to
framework segment the universe of potential customers. This would be
based on the understanding of consumer behaviour
for analysis • Making choices about
• Targeting Customer segments
• Positioning of the product/service attributes to the chosen
customer segments
Marketing plan
• 7 Ps of the Marketing Plan
29
Product
Traditional Price
Hence 4 + 3 marketing Promotion
framework
“P”s : Placement
Marketing
Mix for Physical
For services
Services marketing,
evidence
Process
additionally People
30
Hybrid Service: A major
service with
accompanying minor
goods and services, like
Categorising banking services.
Services
Pure service: It is
primarily an intangible
service, for example,
valuation advice.
31
Current account
Overdraft against current account
Letter of credit
Loan syndication
Fund raising through IPO
Categorize M&A
into Hybrid Valuation opinion
32
Intangible: you cannot see,
taste, or touch them.
36
Managin
g Service
Quality
Distinctive
Characteristics
of Financial
Services
Role of
Regulatio
ns
Trust
Risk
Disruptive
Technology