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Modern Trends in Marketing of Pakistani Banking Sector Services
Banks in Pakistan had been passed through various stages of development since independence. Throughout all these stages the marketing is not considered to be a banker’s cup of tea. But due to change in the economic structure and increased competition it has now become the fundamental management function. It is not only significant for the survival of the bank but also needed for improving efficiency of the services offered by the bank. Previously, Pakistani banking sector had not paid significant attention towards the marketing and market research. I this essay I discuss the micro and macro trends in the marketing of the banking sector.
Banking sector plays a very significant role in the economic development of the country. The downfall of the banking sector can cause the financial crisis. Many of the banking sectors are now putting emphasize on the marketing of their services to aware the customers regarding the benefits and improving the working efficiency. Banks are now focusing to developing the long-term relationship with the customers for the sustainability and thereby attracting the new customers. So, the relationship marketing gains quite significance in this sector. It focuses on the research on evaluation the requirements of the customers and developing new service methodologies.
Traditionally, banks were considered as the holders of finance, but gradually they made their perspective as the creators of the finance. But in this today’s era, scope of the banks has broadened quite significantly and now banks are considered as the purveyor of the money for the country’s economy. A strong banking system is the backbone of the developing economies and it reflects the country’s economic growth.
Looking at the statistics globally, out of 6.9 billion people in the world only 2.1 billion people owns an account in the bank and about 5.2 billion people uses the mobile phones. This translates that only about 30% of the world population have bank account while about 70% of the population uses phones. According to the Pakistan Telecommunication authority, the teledensity is 72.5% while on the other hand there are only 49 million bank accounts. There is still potential for ample growth of the banking sector, providing the innovative and effective marketing strategies to hit the untapped market.
According to the financial reports banks spent about 3.6% of their total expenditure on marketing and advertising. And it they plan to increase these expenditures on about 4% each year.
Recent trends in marketing strategies of banking sector:
- Advertising is the most common promotional tool in the banking sector. Banking sector is now investing a large portion of their budget on the promotional advertisement.
- Customer expectations are continuously increasing due to the rise in literacy rate and customers are now more aware than ever before. They are now expecting more value-added banking services and are ready to pay premium for it.
- Mobile banking is getting very popular day by day. It is becoming essential demand by the customers. Its blessing for the majority of people whom it is unable to visit the branch for routine transections. Banks are also taking huge benefit from the mobile banking, as it cuts the cost of service facilitation quite significantly.
- Banking sector is also using the social media for their marketing purpose. Almost every financial institution has developed their social media cells responsible for the promotion of various services. Social media is becoming quite popular among the people today and it is very effective promotional tool.
- Due to the technology revolution in last few years, forces every industry including the financial institutions and banking sector to evolve their marketing strategy. Virtually all the banks have now their websites and internet banking. E-newsletter has now become the most effective form of the marketing, followed by the search engine optimization.
- Contrary to the past banking sector are increasing their marketing budget every year despite of overall state of the economy. It has now become the major strategy driver for their business. This is due to the fierce competition and ever-increasing customer demands.
- Instead of opening as many accounts as possible as before, banking sector is now focusing on the retention of the customer. They are now investing in the customer relations and quality service. Customer’s satisfaction has now become heir top most priority. Banks are now investing in the market research and surveys to analyze the rising demands of their current and potential customers to uplift the level of customer satisfaction.
- The studies have shown that with the combination of emails and traditional promotional channels efficiency of service marketing is increased significantly. Banks are now developing the data base of the good customers as well as the potential ones. Gathering the email address has never been so important than ever before.
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