MARKETING OF FINANCIAL

SERVICES
Answer 1
Online marketing
Online marketing is a subset of online marketing. Any marketing that requires the
internet to perform is considered online marketing. Websites, blogs, social media and
emails are all methods of online marketing. Online marketing focuses on attracting
customers and building an online presence.
Online marketing for financial services
• Consumer Experience and Engagement
• Leveraging omnichannel marketing
• Entering new markets with a broader reach
To achieve these goals and excel, financial institutions can use online marketing
strategies to their advantage in the following ways
Create a user friendly interface via multi channel marketing
Multi channel marketing helps reach more customers and engage with them on
multiple platforms. The financial institutions employing an omnichannel strategy must
ensure that the user experience is seamless and uniform across all channels. For a
frictionless UI, website design should adhere to functionality that engages users and
make them come back for more. Also, websites should offer easy navigation across
mobile platforms as well without any lags.
Financial organizations are increasingly adopting modern innovations like chatbots for
an immersive user experience. All these features propel customers to spread positive
word of mouth for your brand
Content marketing
One of the surest ways to improve business growth is prioritizing content creation,
SEO and optimizing content to grab customer attention. Content marketing is usually
overlooked, but a well crafted content plan can help customers understand the nitwits
of financial services. Not only will it help generate more leads, but customers will feel
entrusted to your brand and will bring in more referrals.
Make sure that you set clear goals while planning content creation. Think of detailed
and informative articles about financial services offered by your brand. Use multimedia
and customization techniques to reach the targeted audience. Analyze the blog traffic
to understand your readers better and then develop relevant content that resonates
with your audience.

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Mobile marketing
With laptops and tablets becoming redundant, mobile based online marketing will help
financial marketers reach more customers. It is crucial that the content – whether audio
or video is well optimized for mobile platforms as well. Mobile based marketing is
proven to be highly effective in garnering customer attention and influence their
purchase decisions.
Focus on Personalization
Personalization is everywhere. It is the buzzword that increases customer
engagement and improves customer retention in the long run. About 77% of
customers respond well to personalized messages in some ways to cater to their
individual needs. (Source)
In terms of financial marketing, personalization can be used to

• Offer tailored recommendations

• offer highly personalized services to the customers that align with their specific
needs

Personalized campaigns can be designed by studying various customer profiles and

then optimizing them as per demographics, customer shopping behavior, past
purchases, and more to improve customer engagement and their overall experience.
Personalization is helpful to build a more loyal customer base. By sharing personalized
recommendations, you can influence customer’s shopping decisions. When
customers feel that their needs are met, they stay loyal to the brand and eventually
become brand advocates.

Informative videos
Video content is becoming a huge thing in recent times. With video marketing, financial
brands can gain more attention and increase user engagement with customers.
Informative videos can be used as a tool to educate the customers and generate leads.
It is easier to relate to video or graphic content than text based content.
The possibilities are endless with video marketing as it relies on a low cost model that
generates good output. Also, video analytics can be used to optimize future campaigns
and create highly engaging content.
While creating video content, make sure that it’s interactive and people leave their
comments or come back for more. Use infographics, doodles, pictures, etc., to make
it more engaging. You can also tell inspiring financial stories to connect with the
audience.

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Engage with customers
Engagement is the key to boosting business growth in today’s hyperconnected world.
Millennials and Gen Zs prefer brands that post unique and engaging content on social
media platforms. Financial marketers can engage with customers through superior
customer service as well.
All these strategies impact customer relationships with your brand. Going beyond the
transactional relationship makes your customers feel special, which converts them into
brand loyalists. Therefore, it is crucial to engage with them and make them feel like
you have their back consistently.

Positive customer reviews

Customer reviews can make or break a brand’s image. If your customer leaves a
positive review, it means that they are happy with the services and trust your brand
significantly. When new or prospective customers read such positive reviews or
feedback, they are more likely to feel positive while doing business with your brand.
New customers are often reluctant to try an unknown brand. This is where reviews
help them influence their purchase decision and steer them to press that BUY button

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Answer 2
Credit Score
A credit score is a number from 300 to 850 that rates a consumer’s creditworthiness.
The higher the score, the better a borrower looks to potential lenders.
A credit score is based on credit history: number of open accounts, total levels of debt,
repayment history, and other factors. Lenders use credit scores to evaluate the
probability that an individual will repay loans in a timely manner.
There are several different credit bureaus in the United States, but only three that are
of major national significance: Equifax, Experian, and TransUnion. This trio dominates
the market for collecting, analyzing, and disbursing information about consumers in
the credit markets.
The credit score model was created by the Fair Isaac Corp., now known as FICO, and
is used by financial institutions. While other credit scoring systems exist, the FICO
Score is by far the most commonly used. There are a number of ways to improve an
individual’s score, including repaying loans on time and keeping debt low.

Credit Scores Work

A credit score can significantly affect your financial life. It plays a key role in a lender’s
decision to offer you credit. For example, people with credit scores below 640 are
generally considered to be subprime borrowers. Lending institutions often charge
interest on subprime mortgages at a rate higher than a conventional mortgage to
compensate themselves for carrying more risk. They may also require a shorter
repayment term or a co signer for borrowers with a low credit score.
The average FICO Score range is often used.
• Excellent: 800–850
• Very Good: 740–799
• Good: 670–739
• Fair: 580–669
• Poor: 300–579
A person’s credit score also may determine the size of an initial deposit required to
obtain a smartphone, cable service, or utilities, or to rent an apartment. And lenders
frequently review borrowers’ scores, especially when deciding whether to change an
interest rate or credit limit on a credit card.
Credit Score Factors
five main factors are evaluated when calculating a credit score:
• Payment history
• Total amount owed
• Length of credit history

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 • Types of credit
• New credit
Payment history counts for 35% of a credit score and shows whether a person pays
their obligations on time. Total amount owed counts for 30% and takes into account
the percentage of credit available to a person that is being used, which is known as
credit utilization. Length of credit history counts for 15%, with longer credit histories
being considered less risky, as there is more data to determine payment history.

The type of credit used counts for 10% of a credit score and shows if a person has a
mix of installment credit, such as car loans or mortgage loans, and revolving credit,
such as credit cards. New credit also counts for 10%, and it factors in how many new
accounts a person has; how many new accounts they have applied for recently, which
result in credit inquiries; and when the most recent account was opened.
How to Improve Credit Score
• When information is updated on a borrower’s credit report, their credit score
changes and can rise or fall based on new information. Here are some ways
that a consumer can improve their credit score:

• Pay your bills on time: Six months of on time payments are required to see a
noticeable difference in your score.
• Increase your credit line: If you have credit card accounts, call and inquire about
a credit increase. If your account is in good standing, you should be granted an
increase in your credit limit. However, it is important not to spend this amount
so that you maintain a lower credit utilization rate.
• Don’t close a credit card account: If you are not using a certain credit card, it is
best to stop using it instead of closing the account. Depending on the age and
credit limit of a card, it can hurt your credit score if you close the account. Say,
for instance, that you have $1,000 in debt and a $5,000 credit limit split evenly
between two cards. As the account is, your credit utilization rate is 20%, which
is good. However, closing one of the cards would put your credit utilization rate
at 40%, which will negatively affect your score.
• Work with one of the best credit repair companies: If you don’t have the time to
improve your credit score, credit repair companies will negotiate with your
creditors and the three credit agencies on your behalf, in exchange for a
monthly fee. Additionally, given the number of opportunities that a great credit
score provides, it could be worthwhile to utilize one of the best credit monitoring
services to keep your information secure

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The Bottom Line
Your credit score is one number that can cost or save you a lot of money in your
lifetime. An excellent score can land you lower interest rates, meaning that you will
pay less for any line of credit you take out. But it’s up to you, the borrower, to make
sure that your credit remains strong so you can have access to more opportunities to
borrow if you need to.

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Answer 3 (A)
SIP Investment
A SIP or systematic investment plan allows an investor to allocate a small sum of funds
regularly in their preferred mutual fund scheme. As the term implies, this is a
systematic method of allocating fixed amounts of money in a periodic manner. This
can be semi annually, quarterly or monthly, etc.
On activating a systematic investment plan, a fixed amount gets deducted from an
individual’s bank account on a monthly basis. As a result, achieving one’s financial
goals can become easier if he/she invests steadily in this manner.
Unlike a lumpsum investment, individuals spread their investment over time with a
systematic investment plan. Therefore, one need not have substantial funds to get
started with an MF investment through SIPs. This, in turn, helps them instil a sense of
financial responsibility in the long run.

Lumpsum Investment
A lumpsum investment enables investors to deposit the entire amount available in one
go for acquiring their desired number of mutual fund units. This route of investing tends
to be beneficial when a fund’s net asset value or NAV is less. Here, a lower NAV allows
individuals to acquire more units. On the other hand, a higher NAV reduces the number
of units for an investor.
Now, with the basic idea of the investment modes clear, let’s move on to the difference
between SIP and lumpsum.
Difference Between SIP and Lumpsum Mutual Fund

Basis of Comparison SIP

Lumpsum
Need for Monitoring the Investors should keep Investors need not
Market tabs on the market monitor the market as
performance on a regular lumpsum investments are
basis as they can enter usually made for the long
various market cycles term.
during their SIP tenure.
Flexibility SIPs are a more flexible
investment method Lumpsum investments
compared to the lumpsum lack flexibility.
option.
Response to Market
Volatility SIPs are not very reactive Lumpsum investments are
to market volatility. highly responsive.
Inculcation of Financial This investment option It does not inculcate such
Discipline can inculcate financial discipline as the
discipline in investors as

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 they get into the habit of investment is made at one
investing in a planned go.
manner.

Which one should be selected

Investments through a lumpsum and a SIP comes with their own set of benefits.
Investors can find it challenging to choose one out of these two. That said, knowing
the differences between the two will help one make an informed decision.
The major difference between a lumpsum investment and a SIP is the cash flows.
Individuals allocate funds just once in a lumpsum investment. But in a SIP, they invest
on a regular basis.
Many individuals prefer a SIP because it inculcates financial discipline. However, this
is not the case for a lumpsum investment as it involves allocating funds at one go.
Moreover, individuals must consider some critical factors when deciding upon a
suitable investment mode for them. These factors include the type of fund, disposable
sum, investors’ financial goals, and investment objectives
So in our opinion Ameet and Supriya should invest through SIP.

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Answer 3 (B)
A Term Insurance Plan
Term insurance is the most basic, simple, and affordable type of insurance that only
provides comprehensive life insurance. Term insurance offers the most coverage for
the lowest wages. In this case, coverage is provided for a specified period of time. In
the case of the death during the term, the nominee will be paid the sum assured
amount.
ULIP Plan
ULIPs, or Unit Linked Insurance Plans, offer both life insurance and investments. The
premium you pay is divided in two parts: one is used to pay mortality charges and the
other is placed in several investment options such as bonds, loans, equities, or a
hybrid fund. You will be entitled to the sum assured and/or the fund value of the unit
linked investments when the plan expires..
Differences Between Term Insurance And ULIP
Component of Savings
Under a single policy, a ULIP combines the benefits of savings and protection horizon.
Policyholders have the option of investing in either equity or debt funds, or a
combination of the two. A term insurance plan does not have a savings component.In
term insurance, the full premium is used to cover the life of insured.
Affordability
When compared to ULIPs, term insurance plans are more cost effective. Term
insurance plans provide a higher sum assured at a lesser premium rate, depending
on a variety of factors that decide your premium, such as your age, health status, and
so on. When it comes to buying a term or ULIP plan, however, it all depends on an
individual's life or financial goals.
Value of Surrender
If you do not pay your premiums, your term insurance policy will lapse. If a ULIP is
surrendered within the lock in period, the fund value up to that point is paid out after
applicable charges have been deducted, as per the terms and conditions of the policy.
and objectives.
Which one should be choose
Term insurance plans are the safest way to protect the future of your loved ones if
something happens to you. They are especially beneficial if you want to do it for a low
premium and a large sum assured. ULIPs, on the other hand, combined life insurance
with investment potential. Because of the returns on investment, unlike term
insurance, you can have a maturity benefit and attain long term goals.
Because the two policies serve different purposes, you should not pick one over the
other. Including both in your financial portfolio can help you not only secure the

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financial future of your family, but also develop a corpus for retirement and other future
needs. That is why it is a good way to make a ULIP to your term plan, or vice versa.
As per our conclusion Ameet should choose ULIP plan

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