NDEJJE UNIVERSITY

FACULTY OF BUSINESS ADMINISTRATION AND

MANAGEMENT

COURSE NAME: MARKETING OF FINANCIAL

PRODUCTS, SERVICES AND OPERATIONS

COURSE CODE: 1206

FACILITATOR. : MR. KAGGWA CHARLES

NAME REGISTRATION NUMBER

WAGUTI JUNIOR RICHARDS 20/ 2/ 330 /W /775

NAAGABA SHIPHRAH 20 /2/ 330/ W/ 101

NAMAKULA AIDAH 20/ 2/ 330 /W /806

BIRINOMUTONZI DESIRE 20/ 2 /330 /W /437

NAKANDI SHAMIRAH 19/ 2 /330 /WJ /181

MWANJE NSANJA JESE 20 /2/ 330 /W/ 100

SEMBUSI ANDREW MOSES 20 /2 /330 /W/ 304

NAGAWA CLARE 20/ 2/ 330/ W/ 542

MUGANZA JOSEPH 20 /2/ 330 /W /889

TEBANENYA OLIVIA 20/ 2/ 330/ E /098

QUESTION ONE:
Financial services are the economic services provided by the finance industry, which encompasses a
broad range of businesses that manage money, including credit unions banks, credit
cards companies, insurance companies, accountancy companies, consumer-finance
companies, stock brokerages, investment funds individual managers, and some government
-sponsored enterprises.

Financial services marketing refers to the collective use of marketing tactics employed by
marketers in the financial services sector to attract new customers or retain existing ones. If you're
a marketer working in the financial services sector, you probably know how difficult it is to stand out
of the crowd.

Developing marketing strategies for financial services means considering a range of elements which
include:

 Your organization’s goals & objectives

 Target markets
 New & emerging markets
 Your organization’s strengths & weaknesses
 Resources available

The 5 Most Effective Marketing Strategies for Financial Services:

1. Customer Outreach
2. Self-Service and Digitization
3. Social Media
4. Automation and Big-Data
5. Digital Storytelling
There’s great need for such strategies in the marketing of financial services due to the reasons
discussed below;

1.Customer outreach is a great communication strategy for the business. With outreach marketing,
a business owner can tell consumers about the products, promotions, and news. Talking to
customers can also help an the suppliers of financial products to discover consumer needs so they
can develop in-demand products and improve customer experience.

Self-service gives your customers the power to find their own answers – they feel empowered,
because they can begin resolving their own issues, and they don't get impatient waiting for one of
your busy service desk agents to pick up the phone. Therefore this stimulates good customer
experience in consumption of financial services.

2. Content Marketing Content marketing is important for financial services since it strengthens the
appearance of your brand. Your brand should depict a thought leader, a brand that educates the
consumer, which thus leads to you gaining more trust. It permits you to have consistent and
constant communication with current customers and attract potential ones as well. Financial blog
posts are a perfect strategy to target a larger audience. Since the financial services sector is heavily
reliant on personal relationships, content marketing is necessary to strengthen that relationship and
establish trust. This bond will thus result in customers picking your company or financial organization
over your competitors. Next time someone googles information on obtaining stocks, credit, financial
managers or private lenders, your blog post can be the first thing they see. Financial blog posts help
attract a wider market and can be transmitted on numerous platforms online.

3. Online Reputation Management

For the financial services sector, one of the strongest benefits that appears from digital marketing is
the ability to engage with your customers and react to their reviews. Numerous financial planners
have reputations that are often tainted with a bad image. Being aware of your online reputation and
responding to negative reviews is imperative in order to proceed in this field. Reviews can be written
anywhere online, but can luckily be responded to in a professional and prompt manner. It is
important not to respond in a confrontational way, so your future potential leads can be assured in
your professionalism. Customer loyalty is yielded by customer satisfaction. In order for your
customers to stay loyal they must build a relationship with their provider. In financial services, the
customer must feel that their services are being customized for their specific needs, and that if their
needs are not met, the provider will always be willing and able to help them. The financial services
sector is shifting to allocate more attention towards client care and the overall customer experience
which can be managed better through digital marketing.

4. Press Releases

Various industries in the financial services sector use press releases to transmit messages. Before
digital marketing, these press releases were hard to circulate. Now, whether you’re sharing
information on the latest stock developments or accounting and compliance, your information is
accessed much faster. Through the help of social media, these press releases can be shared with
anyone anywhere. Whether it is on LinkedIn for stockholders or on Facebook for the everyday
crowd, your press releases will be read faster and by a larger market which helps push volume for
your stock.

6. Storytelling enables marketers to develop a deeper connection with the audience. Storytelling is
a fundamental human experience that unites people and drives stronger, deeper connections. From
the earliest recorded history, storytelling was a method used by cavemen to communicate, educate,
share, and connect. As an example, think about Suburu’s ads which communicate “love” through a
series of ads that establishes the car brand as a symbol of caring for those you love. Whether it’s a
father caring for his son or daughter, or a parent caring for their beloved pet, the series of ads are
more about what the brand represents to the family than the horsepower that the car delivers. By
communicating the brand through stories, Suburu is able to elevate the meaning of the brand and
better crystalize how it fits into customers’ lives. Similarly through story telling, marketers can use
this approach to boost the marketing of financial services.

7. Storytelling is a powerful method for learning. As marketers, we should always be seeking to

learn more about the world we live in, the brands that we represent, and the consumers that we
serve. One of the things that is unique about stories is that they transmit knowledge and meaning.
We learn from observations, first-hand experiences, and by sharing those experiences through
stories. Storytelling can be a powerful tool that enables marketers to understand what is going on in
the marketplace and what that means for the customer, consumer, society, brand, and company.
Therefore Storytelling poses to be essential in marketing of financial services.

8. Financial services companies need to harness the great power of social media in order to enhance
customer service, manage their reputation and obtain a competitive advantage. Social media
humanizes customer service, brings businesses closer to their stakeholders, and makes information
more accessible.

9. Social media allows marketers of financial services to connect and engage potential customers
where they are at: LinkedIn, Twitter, YouTube, Facebook, Instagram, and even some of the younger
platforms like TikTok. With a strong social media strategy and the ability to create engaging content,
marketers can engage their audience.

10. Regulatory pressure: the recent tsunami of new regulations (Basel III, FRTB, MiFID II, AML/KYC,
FATCA…) force banks to disclose more diverse data and more granular data to central banks and
regulators. Furthermore, the fines associated when not complying to these regulations are climbing.
This forces banks to collect more and more data in a controlled way, so that the necessary regulatory
reporting can be generated automatically, but also that all data is available for ad-hoc inquiries of
the regulators.

11. Increased cyber-security: with fraud and financial crimes increasing, banks need to protect their
most valuable asset, namely the "trust" that customer give to their bank. This increases the pressure
to further secure the interaction channels and the customer data, through different security
techniques. One of the most promising is risk-based authentication, in which a fraud-detection
engine calculates a risk profile for each channel request, determining the required level of security
(authentication). This fraud-detection engine uses customer analytics to identify irregularities in the
user’s behaviour.

12. Pressure to reduce operational costs incurred in the marketing of financial services: due to the
increased competition and low interest rates, profit margins in the financial services industry are
dropping. Banks and insurers are forced therefore to reduce operational costs, by improving
business efficiency. Many of these efficiency gains can be driven by the insights gained from Big
Data.

QUESTION TWO
Challenges in marketing of financial services come in many forms and pose significant hurdles
for financial service providers (FSPs). Besides operating in a tightly regulated sector, they must
contend with customer and market-related barriers that can make it difficult to stand out and excel.
With these challenges comes the difficult choice of which strategies and solutions to use to win
against competitors.

Marketers face various challenges in their efforts to market financial services as discussed below;

1. Commoditization

The digital age has opened up the door for more players to enter the financial field. But as the
financial services industry grows, so does the competition and many companies have the same
things to offer. Commoditization is the idea that the products and services offered by one company
are pretty much interchangeable from the products and services offered by their competitors.
Consumers have less incentive for brand loyalty when they feel they can just move on to someone
else for the same things.

2. Lack of Consumer Trust

Financial services aren’t exactly known for having consumer interests as their top priority. In 2016,
only 8% of responders to a survey from the non-profit National Association of Retirement Plan
Participants said they had faith in their financial institutions (down from 13% in 2015). Events in the
financial markets over the last decade (following the 2008 Financial Crisis) have eroded consumer
trust and made it more difficult for financial service marketers to truly connect with their audience.

3. Marketing Automation

Automated marketing is making it easier for brands to push out targeted ad campaigns. But finance
has been slow to adopt this new tech, and it’s showing. Part of this is due to internal and compliance
factors that dictate precisely how financial marketing can function, but it’s also due to career
professionals who are reluctant to learn new things. This is no time to get left behind and the
financial sector will have to embrace marketing automation if they want to keep up.

4. Intangible Offerings

Marketing financial services has long been more about selling an idea i.e. wealth growth—than a
tangible product. But with intangible products come the risk that things won’t work out for the
customer. You have to sell future possibilities, which can be tricky when there are no guarantees.

5.Compliance/Regulatory Marketing Challenges

The financial services industry is one of the most tightly regulated industries in the world. Breaking
even one of the dozens of federal, state, and sometimes local rules can result in lawsuits, hefty fines,
and reputational damage.

In addition, advertising networks also exert their own financial services advertising restrictions
preventing financial service providers from advertising certain services or targeting
vulnerable demographics.

With restrictions on multiple fronts, it is no wonder that most financial services companies stick to

traditional or tried-and-tested forms of marketing. However, this strategy results in flat marketing
content that fails to move the needle

6.Brand Consistency

Maintaining fluency across multiple parts of a financial marketing campaign is no small feat. While
this challenge is not unique to the financial services industry, financial institutions must still get it
right to win in their market.

One of the issues that make financial brand consistency challenging is silos. The financial industry is
so rigid (in part due to regulations) that most departments do not (or cannot) share data.

7.Hypercompetitive Financial Services Industry Environment

The financial industry is one of the most competitive industries globally. All sub-sectors within the
industry - tax advisory, credit unions, accounting, investment banking, or insurance companies, are
subject to a hypercompetitive environment.
In such a market, democratization by technology gives everyone access to the same marketing tools,
talent, and drivers, making it extremely difficult to stand out or stay ahead for long.

Since the financial sector relies heavily on relationships, building trust is a major consideration.

Without a robust trust-building framework like educational content and transparent fees, it becomes
increasingly difficult for FSPs to hold on to customers and build a loyal customer following.

8. Digital-first Customers

Digital-first customers expect seamless digital experiences across the entire customer journey. They
expect to get a marketing email that opens an offer directly in a brand’s mobile banking app instead
of sending them to a web page.

Moreover, they expect financial brands to offer the same digital experiences they are accustomed to
when visiting websites and apps like Google, Facebook, and Amazon.

These high expectations serve as a significant challenge for FSPs, most of whom lack the resources to
deploy such sophisticated digital experiences.

9. Omni channel Reality

Digitization has ushered in the age of Omni channel marketing. Financial brands face a market
demanding a seamless user experience across all channels relevant to the buyer’s journey. In
fact, marketers using three or more channels in any one campaign earned a 287% higher conversion
rate than those using a single channel.

The only problem is that pulling off an effective Omni channel marketing strategy is extremely
challenging and expensive. According to Marketing Sherpa, lack of budget is the single largest barrier
to Omni channel marketing, besides other obstacles like a lack of talent, core new technologies, and
data processing and analytics capabilities.

10. Big Data & Customer Analytics Utilization

Big data, artificial intelligence (AI), and predictive customer analytics represent a substantial

opportunity for FSPs. However, regulations around data privacy, security, and processing remain a
major hurdle for most. Simultaneously, most FSP marketing departments lack the core technology
needed to collect high-quality data and turn it into actionable insights.

On the customer analytics front, FSPs struggle to collate and connect meaningful data points from
customers. Even simple website analytics is missing from most FSP websites.

Without a meaningful data and customer analytics strategy, most FSPs resort to making poorly
educated guesses at what their customers want or using incomplete data from limited surveys to
make crucial strategic decisions.

11.Personalization

75% of consumers prefer to purchase from a brand that knows them and makes personalized
recommendations. At the same time, 33% of customers who ended their relationship with a brand
did so because the experience was not personalized enough. When it comes to financial services,
personalization is an even bigger issue because customers expect financial brands to know them
better because of all the data they collect. FSPs, however, struggle to personalize services because
they lack a single view of the customer. With little integration across channels, marketing
efforts cannot compile cross-channel customer data and generate a three-sixty-degree view of the
customer. As such, it becomes tough to offer hyper-personalized financial services.

12. Limited Internal Resources

A common theme across all the challenges outlined above is a lack of internal resources – both
human and technology resources. While most FSPs try to invest in up-skilling current internal
resources, this only works as a stopgap measure as the process is often slow and affected by
employee churn. Creating well-skilled internal marketing teams, on the other hand, requires
committing considerable resources, resources that smaller FSPs lack.

QUESTION THREE

The Diamond Marketing Model for the financial industry.

When we consider the new complexities of modern financial services marketing, it is best to integrate both
traditional and digital marketing in a manner that achieves synergistic benefits. By fusing together both classical and
digital marketing, organizations are in a better position to identify capability gaps placing a focus on where and how
to move forward. The chart below from e-Consultancy helps to visualize the required components.

This model is a natural progression from previous models used by marketers. For instance, in the 1960s, the
prevalent marketing model was the ‘4Ps’ (Product, Price, Place and Promotion). In the 1980s, there were three
additional Ps added (People, Process and Physical) reflecting increased customer interaction and the beginning of
targeting. In the 1990s, ROI entered the equation, as did the ongoing increase in importance of targeting (the ‘4Cs’
included Consumer, Cost, Communication and Convenience).

The new marketing model highlights the importance of customer insight, analytics, brand and customer
experience. An explanation of the components of the Modern Marketing Model illustrates how all of these
competencies interrelate with each other.

 Marketing Strategy: This is the foundation of the entire marketing process, outlining how marketing
will deliver against business objectives, the techniques to be used and the resources needed to
execute against the plan.
  Market/Customer Orientation: Going beyond product and sales, this element builds positioning
research around the consumer, the market and the competition to determine ability to succeed in the
marketplace.

 Customer Insight: This component is to develop insights into who the consumers are, how they
prefer to interact, their needs and expectations.

 Brand & Value: What is the differentiation that we can bring to the marketplace. In addition, what is
the brand value, purpose and other overarching components beyond price.

 Segmentation and Targeting: Not to be confused with personalization, here is where we break down
the marketplace to determine demographic, psychographic, contextual and geographic targeting
components.

 Positioning: Drilling down to the individual level, this is where you determine the message that each
person will receive based on the combination of branding, targeting insight and customer/member
insight. With digital marketing, there is the potential for dynamic personalization leveraging data and
AI logic to deliver messaging in real time.

 Customer Experience: More than ever, there is a need to understand the customer journey across
multiple channels going beyond last touch attribution to improve engagement and sales

 Distribution: This is where we determine how we will be found by the consumer and when. This
includes online content distribution, marketing automation, etc. reflecting the ‘pull’ of marketing.

 Integrated Marketing Communications: Reflecting the ‘push’ of marketing, this is where we describe
how we will use both traditional and digital marketing to reach the consumer with the right message,
at the right time, across the right channels.

 Data and Measurement: How do we measure and optimize performance? Metrics must be defined,
data sources determined, privacy policies agreed to and distribution of insights formalized to improve
performance and validate the impact of marketing.

Probably the biggest model adjustment is related to the ownership, management and application of data. Data is
now a marketing asset that must be leveraged and protected in ways never before imagined. Sources of data have
expanded as have the tools to make data more valuable. In most organizations, data management and
performance measurement are the competencies in shortest supply

REFERENCES

https://thefinancialbrand.com/72482/digital-banking-marketing-model
https://www.investopedia.com/terms/m/marketing-strategy.asp
https://www.michaelpage.ca/advice/career-advice/growing-your-career/11-types-financial-
services-and-institutions
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