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Industry Overview
.The demand for banking services is directly tied to the economic activity and the level of interest rates. Generally speaking, the profitability of banks depends on effective marketing skills, efficient operations and strong risk management. In this industry, major products are account services, bank loans, brokerage services, credit card and leasing services, trust management and investment services. Banks generate revenue primarily through interest income and service fees. Typically, customers care more about the quality and availability of services than about the cost of services. Because of this behaviour, customers are usually approached by a sales force aiming to maintain log-term relationships with customers, especially commercial customers. Larger banks may also segment their sales force according to the size of potential customers.
Business Challenges
- Exposure to New Business Risks: A lift on restrictions has allowed banks to enter fields that were once more volatile than banking, including insurance, securities brokerage and investment banking. Identifying and mitigating these risks in these particular sectors is often more difficult than in traditional banking. Additionally, banks now make more loans to customers like hedge funds that are lightly regulated and more difficult to analyze.
- Investments in Computer Technology: Consolidation across the banking industry requires continuing investments in computer and communications technologies. Advances in technology require banks to constantly upgrade or replace existing equipment. Sophisticated systems are essential for processing transactions, operating networks and Internet sites, and for analyzing operations.
- Exposure to Foreign Economics and Politics: Expansion of international trade makes local banks and their assets vulnerable to international conditions.
Industry Opportunities
- Online Banking: This is becoming more common with both businesses and consumers. Cash-management services are a particularly well-developed feature of online banking, combining account balance information with electronic bill payments and the ability to move excess funds into short-term investments. Additionally, some banks are developing online loan services.
- Alternative Bank Locations: The popularity of ATMs (Automated Teller Machines) has proven that convenience and location is a key factor to the industry’s retail customer service. Increasingly, banks are placing branches in supermarkets and other high-traffic stores like Walmart. Since these are typically open on evenings and weekends to match store hours, the main attraction for such branches is consumer convenience.
- Expansion into Non-Bank Financial Services: By way of a financial holding company structure, banks are able to provide more services to consumers or businesses including insurance, stock brokerage and investment management. Also, to attract assets, some banks offer free stock trading. Demand for these services is geared to increase rapidly as the number of consumers who are 65 years of age and older (ie: Baby Boomers - typically those with the largest financial assets) also skyrockets by the tens of millions.
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Digital Marketing Trends
- Marketing Budget Changes
- Clickthrough and Conversion Rates
- Social Media Usage in the Financial Services Industry
- Mobile Marketing Activities
Digital Marketing Opportunities
- Immediate Areas of Focus for Social and Mobile
- Popular Pay-Per-Click Keywords
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