Marketing of financial services

There are no clear-cut lines of demarcation between marketing and core financial services functions. Marketing permeates virtually all financial services activities and possibilities. It influences and is influenced by across-the-board demands of contemporary financial services. It wields immense influence on and in determining overall performance of financial institutions. Mostly the influence is positive - as in attracting, satisfying, and retaining a large pool of profitable accounts. That way, gain from marketing is optimized at the least possible risk and cost. The contrary is instructive. Marketing, on occasion, skews a financial institution's approach to risk management. Incidentally, marketing could be a safe haven for financial services risks. Yet a financial institution would be in a mess if it doesn't have effective marketing programmes. This is the paradox that I explore - discussing, in doing so, how to optimize marketing while taming its excess. The unpalatable truth and irony is that the excess is shrouded in subtlety. Marketing of financial services presents both challenges and opportunities to financial institutions and their customers. The provision of financial services itself is a highly respected profession - ideally associated with discipline, integrity, and sobriety. Not only is the industry highly specialized, the markets it serves are also distinctive. Service standard that customers expect is high. Customer tastes and preferences show marked sophistication in some ways. On occasion, high levels of human and material resources are required to effectively serve customer needs. Thus, marketing officers must possess particular attributes to be able to do their work well. In dealing with customers, they must be tolerant, and yet firm on policy issues and as a matter of principle. Most financial institutions clearly define their visions in ways that hinge success on certain core purposes and values to which every employee must adhere. Such institutions tend to have zero tolerance for deviation from, or compromise on, the core purposes and values. Most of the attributes which marketing officers must possess derive largely from the core values. Some of the values require them to be professional, committed, and empathic in dealing with customers. Of course, integrity of the employees should not be called into question. In practice, though, there are no uniform values or attributes which employees in different financial institutions must adopt for marketing or other activities. Foregoing attributes are some of the cherished success requirements for financial services marketing. Success in this context is all about ability to optimize gains from target marketing at the least possible risk and cost to the financial institution. The usual starting point for risk mitigation in financial services marketing is encapsulated in the famous Know Your Customer (KYC) concept. Risks in financial services marketing are real. Managing the risks demands a radical approach, zero tolerance for deviation from - or compromise on - risk management rules, and proven integrity of the marketing employees.
About the Author: Leonard Onyiriuba is a leading author on banking. He ever seeks to proffer solutions to problems that constrain operators and stakeholders in the banking industry. This goal drives his hope to bring about positive changes in the work of bankers that affect the ordinary people. Onyiriuba has written several bestsellers, including "Analysing and Managing Risks in Bank Lending" (2004), "Bank Marketing Challenges, Risks and Control" (2008), "The Banking Companion" (2010), and "Bank Credit Policy, Administration and Remedial Strategies" (2013). With his two recent books, "Emerging Market Bank Lending and Credit Risk Control" (2015) and "Bank Risk Management in Developing Economies" (2016) - published by Elsevier Inc., USA - Onyiriuba is now a well-known and respected voice of banking beyond Africa. He started a career in banking in 1991 after a stint as a university lecturer. As a banker, he was at various times Group Head (Commercial Banking), Regional Director (Commercial Banking, Lagos), and Divisional Director (Corporate Banking) and member of Executive Management at the now-defunct IMB Int'l Bank PLC. Onyiriuba holds BSc (first Class Hons) in Business Administration (marketing option) from Rivers State University of Science and Technology (RSUST), Nigeria (1986) and MBA (finance) (1990) from University of Nigeria, Nsukka (UNN). Ochei Ikpefan is Professor of Banking and Finance at Covenant University, Ota, Nigeria. An accomplished academic, Ikpefan has published over 80 articles in reputable local and international journals. He obtained BSc (Hons) in Business Administration and MBA (Finance) from University of Benin, Nigeria, in 1984 and 1992, respectively - and PhD (Banking and Finance) from Covenant University, Ota, Nigeria. He also holds MSc in Public Sector Management. Professor Ikpefan is External Examiner for some public and private universities in Nigeria - as well as an Assessor of The Chartered Institute of Bankers of Nigeria (CIBN) and Institute of Chartered Accountants of Nigeria (ICAN). He is also a trained banker. He was pioneer Head of Area Office (Benin) Central Clearing House, Head of Special Movement, and treasury and branch inspector at the defunct New Nigeria Bank Limited. He is a Fellow of the Chartered Institute of Bankers of Nigeria (FCIB), Fellow of the Institute of Chartered Accountants of Nigeria (FCA), and Associate Member Chartered Institute of Securities and Investment (ACSI), London.