Marketing of Fee based services

It is no longer enough to satisfy customers. You must delight them. Philip Kotler

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Trends in Bank marketing Why customers quit? > 1% quit by themselves > 3% moved away > 5% formed other friendships > 9% for competitive reasons > 14% because of product dissatisfaction > 68% attitude of indifference towards customers

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Trends in Bank marketing The greatest discovery of my generation is that human beings can alter their lives by altering their attitudes of mind - William James Success in life Skills Knowledge Expertise

> 12.50%

Attitude > 87.50%

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Trends in Bank marketing Change in attitude Re - skilling Product knowledge and awareness Persistence

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Trends in Bank marketing Intense competition and risks associated with fund based services Borrowers move away from bank loans to debt funding or equity markets Deregulation and new technology have eroded banks comparative advantages Non-bank competitors have entered into exclusive banks domains

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Trends in Bank marketing Capital adequacy norms propels the banks to take up more service activities and less loaning activities Banks have shifted their sales mix towards noninterest income by selling fee-based financial services There is life beyond credit 15 to 30% of top banks in India is generated from feebased services

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Trends in Bank marketing International studies caution against over-dependence on non-interest income due its volatility Risk of volatility applies more to trading (buying/selling of securities) and treasury ( lending in call/FX market) People factor decides the quality of service delivery Pricing of corporate fee-based services are relationship oriented and flexible Retail services have standardised pricing and uses advanced technology channels

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Corporate Fee based services Cash management services integrated payment/receivables solutions Documentary credits and Guarantees Bill discounting Factoring

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Corporate Fee based services Forfaiting of export receivables Foreign Exchange services Merchant Banking Registrar, underwriting and custodial services

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Corporate Fee based services Leasing Credit rating Asset management Corporate credit cards

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Corporate Fee based services Mergers, Acquisitions and recapitalisation advisory Supplier strategies control of travel and entertainment expenses Recommendations on savings process and risk management Better visibility, improved compliance

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Corporate Fee based services Correspondent Banking Global/National trade workshops and seminars for leveraging financial tools Loan syndication underwriting, arranging, distributing and trading senior floating rate debt E tax payment / Income tax/service tax/central excise tax/ MCA 21 payments

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Retail fee based services Bancassurance General and Life Insurance services Money transfer and payment services (NEFT/RTGS/SWIFT) Wealth management and online trading Credit cards/ ATM cards/ Debit cards

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Retail fee based services Bills pay - utility bills payment Safe deposit lockers File tax returns online Health Insurance at discounted rates group med claim floater policies

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Retail fee based services Foreign Inward/outward remittances Marketing of mutual fund products / SIPs Selling of hall marked, 24 carat gold coins and bars Self service banking internet banking, phone banking, mobile banking

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Foreign Exchange Services for Exporters Advisory services on sale agreement, structuring of Documentary credit (DC) DC advising/confirming / DC safe custody service DC transfers for buyers working with sourcing agents Export collections - Bills/cheques

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Foreign Exchange Services for Exporters Advance remittances foreign drafts/telegraphic transfers (TT) Buy/sell foreign currencies/travellers cheques Hedging of forex risk through derivative products forwards, options, futures Forfaiting off shore financing on export receivables to high/medium risk countries

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Foreign Exchange Services for Exporters Benededuct handling charge, courier, cable charges, discrepancy fee, reimbursement fee to beneficiarys account When import/export legs are handled by one bank, funds are received much earlier, documents are checked only once Bankers Acceptances Securitization

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Products for Importers Advice on Documentary credit (DC) structuring Issuances of DC and standby DCs Import collection services collection and delivery of shipping bill services Import financing in foreign currencies and INR

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Products for Importers Buyers credit financing through overseas branches/correspondent banks Executing international payments/advance remittances Suppliers credit credit sales effected by the supplier

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Products for Importers Shipping guarantees and delivery order Management of currency exposures through derivatives Trade account information credit report on the supplier

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BANK GUARANTEES A set of rules developed by ICC and adopted in 1992 Uniform rules for demand guarantees ICC publication no. 458 (1992 edition) Provides framework for harmonising international trade practices Establishes agreed upon rules for independent guarantees and counter guarantees among trading partners

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BANK GUARANTEES Specify uniform practices for securing payment and performance in worldwide commercial contracts Balance the interests of the trading partners Curb abuse in the development of international trade guarantees

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Direct Guarantees Indirect guarantees Advance payment Guarantee Performance bond Payment guarantee Tender / bid bond Guarantee for missing bill of lading Stand- by letter of credit

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Credit Cards Silver / Gold / Platinum cards Fuel / airlines cards Womens card Forex / prepaid card

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Credit Cards Waiver of fuel surcharge Membership reward points Offers/Gift hampers/discounts/cash back on holiday travel, hotels, food& beverage, shopping etc

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Corporate Cards Better management of travel expenses Easier reconciliation and streamlining of business travel Greater visibility of travel spend Payment options with compliance of company policy Corporate meetings card Track, analyse and improve meeting and event spend

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Wealth management Wealth accumulation transformation from savers to investors Wealth preservation protection of wealth Wealth transfer transfer to legal heirs at minimum cost

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Wealth management Growing number of High Net worth Individuals (HNI) Large proportion of younger generation with high disposable income Too many intricate and exotic financial instruments Fluctuations in interest rates and foreign exchange rates between currencies

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Wealth management Gold Real Estate Bank Deposits Equity and mutual funds Debt instruments Arts & Crafts Derivatives

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Wealth management Comprehensive mix of asset, debt, tax and risk management strategies into one single financial solution Address the issues such as asset classification, estate and trust planning, retirement planning, tax advice, business succession planning, charity foundations, employee stock options and equity strategies

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Wealth management Value investing - the Warren Buffett way Choose simplicity over complexity Buy Businesses, not stocks View market downturns as buying opportunities

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Wealth management Practice independent thinking Practice inactivity, not hyperactivity Stay within your circle of competence Ignore stock market forecasts