Strategic Management for Effective Communication in

the Banking Sector in Bangladesh

Tipon Tanchangya1 , Ahammed Karim2
Department of finance , University

Abstract
The banking system, an essential part of the whole financial system, is considered the backbone of global
economies. It plays an important role in both economic growth and the development of Bangladesh.
However, this article determines the impact of strategic management on effective communication in the
banking sector. In this case, we have collected the most 12 significant factors from google scholar and
researchgate by studying our title relevant articles and using the descriptive method for analyzing the
factors. The analysis suggests that for effective communication, the 12 factors can play an important
role in Bangladesh’s banking sector.

Keywords: Strategic management, effective communication, banking sector, Bangladesh

1. INTRODUCTION
Communication is an important tool for the organization particularly banking, development. It mostly
influences every aspect of the bank. By using this instrument, we can execute all social interactions. It is
a medium through which all relationships are established and maintained. Moreover, communication is
the transmission of common understanding by using symbols (Ekeowa, 2017). It is sharing something
that refers to “partaking” or “cooperating”. Therefore, it is a social activity, and without a common
understanding between both parties during the interaction, there is no actual communication. Effective
management communication is a strategic goal for achieving organizational goals. Leaders who want to
become better communicators must first accomplish two distinct tasks, they must improve their
message—the information they want to convey. Second, they need to improve their understanding of
what people are trying to communicate to them; They must try not only to understand others. While an
organization has its own physical environment, purpose, and goals, its members also have their own
goals. All of these interact in the bank environment and create what we call a banking climate. However,
ineffective communication in a bank can lead to insecurity, fear, and dissatisfaction, leading to poor
productivity. Therefore, managers must communicate effectively with

employees and customers. The degree to which a manager achieves corporate goals depends on his
ability to communicate effectively (Herich, 2018). Many managers still do not understand what
communication is and its role in the success of the company (Nnamseh, 2019). Effective communication
improves banking relations and minimizes strikes and lockouts. Banking goals and objectives sometimes
fail when communication is not effective. Lack of communication led to waste and costly mistakes. From
the above scenario arises the need to critically evaluate the role of communication in the strategic
management of organizations.

Bangladesh is an independent country and it has numerous banks that are helping with economic
growth and development, creating employment, letters of credit, and so on. Now it has become a
mandatory task to determine the role of strategic management for effective communication in the
banking sector.

2. Objectives
The specific objectives of this research seminar are as follows:
i.What factors are playing a role behind the effective communication in the Bangladesh banking
sector?
ii. How they are affecting for the effective communication in the Bangladesh banking sector?

3. LITERATURE REVIEW
An O. Adeniran and H. M. Jadah (2020) have conducted research with the title “Impact of information
technology on strategic management in the banking sector of Iraq” to find the impact of information
technology on the banking sector. The findings revealed that electronic cards, ATMs, online banking,
electronic payment, and mobile banking were the major application of IT in the Iraq banking sector.
There is an association between the education level of bank customers and their usage of IT applications
regarding banking transactions in Iraq. There is a relationship between information technology and an
organization’s strategy which has resulted in value creation and competitive advantage for banks. It was
recommended that for better performance of IT in banking, the management of the banking sector
should adopt better policies that will encourage users to adopt IT usage in banks.

H. Y. ALJUHMANİ and O. L. EMEAGWAL (2021) have conducted research with the title “The Roles of
Strategic Planning in Organizational Crisis Management: The Case of Jordanian Banking Sector” to
investigate the relationship between strategic planning and crisis management in the Jordanian banking
sector. The study has used reliability statistics and multiple linear regression analysis. The study
demonstrates that strategic planning has positively influenced the stages of crisis management in
Jordanian Banks in Ramtha.

O. O. Adeosun and T. H. Adeosun (2019) have conducted research with the title ‘’ Strategic Banking
Industry Application of Information and Communication Technology for Effective Service Delivery ‘’ to
investigate the growing reliance on online services accessible on the automated banking system
demands highly-available systems that provide correct banking services without interruptions. This
research considered the problem of providing dependable, high-performing, and consistent banking
services with little or no service interruption & enhancing the productivity in the banking system.

Peggy Athanassopoulou (2020) has conducted research with the title ‘’ Effective communication with
lead customers in developing new banking products’’ to find the impact of effective communication on
banking products. The findings revealed that developing highly interactive, and new technology-based
communication has positive relationships with lead customers.

Bakhuya and Joylette (2020) have conducted research with the title “Effect of Communication Strategy
on Strategic Planning in African Banking Corporation Kenya” to find the effective communication impact
on African Banking Corporations. The study has revealed some essential advantages of effective
communication include: sustaining motivation, assisting the employer in understanding how a job is
being performed, assisting in the decision-making process, assisting in identifying the alternative course
of action, developing people's attitudes, controlling the process of strategic planning, and helping the
managers perform basic tasks like planning, organizing, motivating, and controlling.

Dr. James Kimani (2021) has conducted research with the title “INFLUENCE OF INFORMATION
TECHNOLOGY ON THE BANKING SECTOR” to find information technology on bank performance. The
study has found that information technology affects bank performance. According to research on the
adoption of information technology, such as mobile banking, alerts provided by mobile phones and
smartphone apps help users make educated decisions.

4. RESEARCH METHODOLOGY
We have collected the most 12 significant factors (Li. B.,2019 & Premkumar,2017) from google scholar
and researchgate by studying our title relevant articles. These 12 factors are crucial for effective
communication in the Bangladesh banking sector. The 12 factors are:

 Clear and Concise Messaging

 2. Active Listening
 3. Cultural Sensitivity
 Technology
 Non-verbal Communication
 Feedback Mechanisms
 Empathy
 Timely
 Consistency
 Transparency
 Respect
 Bottom Line Effect

5. DESCRIPTIVE ANALYSIS
Clear and Concise Messaging: Clear and concise messaging is one of the most important factors that
impact effective communication in a bank. It refers to the use of language that is simple, direct, and free
of unnecessary jargon or complexity. This type of communication is essential in the banking industry,
where complex financial products and services can often be difficult for customers to understand.

When banks use clear and concise messaging, it helps ensure that everyone involved in the
communication process understands the message being conveyed. This can help avoid
misunderstandings, confusion, and errors, and ultimately lead to better outcomes. Clear and concise
messaging can also help build trust and confidence with customers, as they feel that the bank is
communicating with them transparently and honestly.

Effective communication is crucial in the banking industry, where trust and credibility are essential for
success. By using clear and concise messaging, banks can ensure that their communications are easily
understood, transparent, and trustworthy, ultimately leading to better relationships with customers and
improved business outcomes.

Active Listening: Active listening is an essential factor that impacts effective communication in a bank.
Active listening involves not only hearing what the other person is saying but also paying close attention
to their words, tone, and body language to fully understand the message they are trying to convey.

In the banking industry, active listening is critical for building strong relationships with customers and
stakeholders. By actively listening to customers, bank employees can gain a better understanding of
their needs and concerns, and provide more personalized and effective solutions. Active listening can
also help bank employees better understand the customer's financial situation and tailor their advice
and recommendations accordingly.

Active listening also fosters a culture of open communication and trust, which can help improve
employee morale, job satisfaction, and overall organizational effectiveness. It helps to ensure that all
voices are heard, and everyone's ideas and opinions are respected, leading to better decision-making
and problem-solving.

Cultural Sensitivity: Cultural sensitivity is an important factor that can increase effective
communication in a bank. Cultural sensitivity involves understanding and respecting cultural differences,
avoiding stereotypes, and adapting communication styles to suit different audiences.

In the banking industry, cultural sensitivity is critical because banks operate in diverse communities with
customers and staff from different cultural backgrounds. When banks are culturally sensitive, it can help
them communicate more effectively with their customers and build stronger relationships. This is
because customers are more likely to trust and feel comfortable with a bank that understands and
respects their cultural values and beliefs.

Cultural sensitivity can also help banks avoid miscommunications and misunderstandings that can occur
when people from different cultures communicate with each other. By adapting communication styles
to suit different audiences, banks can ensure that their messages are conveyed clearly and effectively,
and avoid any unintended offense or misinterpretation.

Technology: Technology is a significant factor that can increase effective communication in a bank.
Technology can help banks communicate with customers and stakeholders more efficiently and
effectively, streamline internal communication processes, and improve the overall customer experience.

Here are some examples of how technology can increase effective communication in a bank:
i.Online Chatbots: Online chatbots can provide customers with quick and efficient customer service,
answering their queries and resolving their issues in real time. This can help improve customer
satisfaction and reduce the workload of bank employees.

ii. Video Conferencing: Video conferencing technology can facilitate remote meetings between bank
employees and customers, reducing the need for in-person meetings and saving time and resources.
This can improve communication and collaboration, particularly for customers in remote locations.

iii. Email and Instant Messaging: Email and instant messaging can help streamline internal
communication within the bank, reducing the need for time-consuming phone calls or in-person
meetings. This can help employees communicate more efficiently, make faster decisions, and improve
productivity.

iv. Mobile Apps: Mobile apps can allow customers to access their accounts, make transactions, and
communicate with the bank on the go. This can help improve customer convenience and increase
engagement with the bank.

Non-verbal Communication: Non-verbal communication is an essential factor that can increase

effective communication in a bank. Non-verbal communication refers to the use of body language, facial
expressions, and other non-verbal cues to convey a message. In the banking industry, non-verbal
communication can play a critical role in building trust and fostering positive relationships with
customers.

Here are some ways in which non-verbal communication can increase effective communication in a
bank:

i.Building Trust: Non-verbal communication can help build trust with customers by conveying a sense of
honesty, transparency, and empathy. For example, maintaining eye contact during a conversation can
signal that the speaker is attentive and engaged, while a friendly smile can help put customers at ease.

ii. Conveying Emotion: Non-verbal communication can help convey emotions and feelings that are not
explicitly stated. For example, a sympathetic nod or a reassuring pat on the back can help convey
empathy and understanding, and help customers feel heard and supported.

iii. Enhancing Clarity: Non-verbal communication can enhance the clarity of verbal messages by
providing additional context and information. For example, using gestures or facial expressions to
emphasize key points can help customers better understand the message being conveyed.

iv. Mitigating Language Barriers: Non-verbal communication can help mitigate language barriers by
providing additional cues and context that can help customers understand the message being conveyed.

Feedback Mechanisms: Feedback Mechanisms are a crucial factor that can increase effective
communication in a bank. Feedback mechanisms refer to the processes and tools that allow customers
and employees to provide feedback on their experiences with the bank, including their interactions with
staff and the bank's products and services.

Here are some ways in which feedback mechanisms can increase effective communication in a bank:

i.Improving Customer Service: Feedback mechanisms can help banks identify areas where customer
service can be improved. For example, customers can provide feedback on staff behavior, wait times,
and the overall quality of their interactions with the bank. Banks can then use this feedback to improve
their customer service processes and ensure that customers are satisfied with their experience.

ii. Identifying Customer Needs: Feedback mechanisms can help banks better understand their
customers' needs and preferences. For example, customers can provide feedback on the bank's
products and services, allowing the bank to tailor its offerings to better meet customer needs.

iii. Encouraging Communication: Feedback mechanisms can encourage open communication between
customers and the bank, fostering a culture of transparency and trust. When customers know that their
feedback is valued and acted upon, they are more likely to communicate openly with the bank,
providing valuable insights that can help the bank improve its operations and offerings.

iv. Employee Development: Feedback mechanisms can also help banks develop their employees by
providing feedback on their performance. For example, employees can receive feedback on their
communication skills, allowing them to improve their interactions with customers and become more
effective at their jobs.

Empathy: Empathy is a critical factor for effective communication in banking because it helps build a
connection and trust with customers. When banking professionals show empathy, they demonstrate
that they understand and care about the customer's concerns and needs. This can lead to a more
positive and productive interaction between the customer and the banking professional.

Empathy allows banking professionals to better understand the customer's perspective and tailor their
communication to meet their specific needs. This means using language and tone that are appropriate
for the customer's level of understanding, and being patient and supportive in addressing their
questions and concerns.

Empathy can also help resolve any conflicts or problems that may arise during banking transactions.
When customers feel that their concerns are being heard and addressed, they are more likely to remain
loyal to the bank and recommend it to others.

Timely: Timely responses are crucial for effective communication in banking because customers expect
prompt and efficient service. Delayed responses can lead to frustration, confusion, and dissatisfaction,
which can harm the bank's reputation and customer loyalty.

In today's fast-paced world, customers expect quick and convenient access to banking services, including
timely responses to their inquiries, concerns, and requests. When banking professionals respond

promptly to customer inquiries, they show that they value the customer's time and are committed to
providing exceptional service.

Timely responses are particularly important for urgent matters, such as fraudulent transactions, account
issues, or loan applications. A delayed response to such matters can lead to significant financial losses
for the customer and the bank.

Moreover, timely responses are a key element of customer service, which is critical for building trust and
loyalty. When customers receive prompt and efficient service, they are more likely to remain satisfied
with the bank's offerings and recommend it to others.
Consistency: Consistency is an essential factor for effective communication in banking because it helps
to ensure that all members of the banking team are on the same page, using consistent messaging and
information. This is important because it helps to build trust and confidence among customers, who rely
on the bank to provide accurate and reliable information.

Consistency ensures that customers receive the same information, regardless of whom they speak with
or which channel they use to communicate with the bank. This means that customers can expect a
uniform level of service and information, which helps to avoid confusion and misunderstandings.

Consistency is also important for compliance and regulatory purposes. Banks must comply with a wide
range of regulations and requirements, and consistent communication helps to ensure that all team
members are following the same procedures and guidelines.

Transparency: Transparency is a critical factor for effective communication in banking because it helps
to build trust and credibility with customers. When banks are transparent about their policies,
procedures, fees, and products, customers are more likely to have confidence in the bank's offerings and
feel comfortable doing business with them.

Transparency also helps to ensure that customers are fully informed about the risks associated with
banking products or services. This is important because customers may be more likely to make informed
decisions about their finances when they have access to clear and accurate information.

In addition, transparency can help to avoid misunderstandings and disputes between the bank and the
customer. When the bank provides clear and concise information about its offerings, customers are less
likely to be confused or misled about what is being offered.

Transparency is also important for regulatory compliance. Banks are subject to a wide range of
regulations and requirements, and transparency helps to ensure that the bank complies with these
regulations.

Respect: Respect is a critical factor for effective communication in banking because it helps to establish
a positive and professional relationship between the bank and the customer. When banking
professionals show respect to their customers, they demonstrate that they value their business and are
committed to providing exceptional service.

Respectful communication can take many forms, such as using appropriate language, being courteous,
and treating customers with dignity and empathy. When banking professionals treat their customers
with respect, they are more likely to establish trust and rapport, which can lead to a more positive and
productive interaction.

Respect is also important for building customer loyalty. When customers feel respected and valued by
the bank, they are more likely to remain loyal and recommend the bank to others. On the other hand,
disrespectful communication can lead to dissatisfaction and a negative perception of the bank, which
can harm its reputation and customer retention efforts.

Moreover, respect is a fundamental element of good customer service. When banking professionals
show respect to their customers, they are more likely to be patient, attentive, and responsive to their
needs, which can lead to better outcomes for both the customer and the bank.
Bottom Line Effect: Effective communication is crucial for any organization, including banks. One of
the most important factors for effective communication in the banking industry is the bottom-line effect.
The bottom line refers to the financial result or the profit that a bank makes. Effective communication
can positively impact the bottom line in several ways:

i. Improved customer service: Effective communication helps banks to understand their customers'
needs and respond to their queries promptly. This enhances customer satisfaction, which leads to
increased loyalty and ultimately higher revenue.

ii. Better internal communication: Effective communication among bank employees helps to streamline
operations, reduce errors, and enhance productivity. This translates into cost savings and improved
profitability.

iii. Clear communication of policies and procedures: Effective communication ensures that bank policies
and procedures are clearly understood by all employees, reducing the risk of errors, misunderstandings,
and legal disputes that can be costly to the bank.

iv. Effective marketing: Effective communication enables banks to convey their unique value proposition
to customers and prospects. This can increase brand awareness, attract new customers, and generate
additional revenue.

v. Efficient problem-solving: Effective communication facilitates the timely resolution of customer

complaints and internal issues. This can prevent the escalation of problems, reduce costs, and improve
the bottom line.

13. Management of the Policies: Effective communication in a bank is heavily dependent on the
management of policies. Policies are the guidelines that govern how the bank operates, and they affect
all aspects of communication in the organization. The following are ways in which the management of
policies can impact effective communication in a bank:

i. Clarity of policies: Clear policies help to ensure that everyone in the bank understands what is
expected of them. This clarity reduces the likelihood of confusion or misunderstandings that can impede
effective communication.

ii. Consistency of policies: Consistent policies ensure that all employees are treated equally and fairly.
This consistency promotes a culture of trust and transparency that can positively impact communication
within the organization.

iii. Accessibility of policies: Policies should be easily accessible to all employees. This accessibility allows
employees to reference policies when they need to and reduces the likelihood of misinterpretation or
non-compliance.

iv. Timeliness of policy updates: Policies should be updated regularly to reflect changes in the bank's
operations, regulations, or industry standards. This timeliness ensures that policies remain relevant and
accurate and that employees are aware of any changes that may impact their work.

v. Enforcement of policies: Policies must be enforced consistently and fairly to promote accountability
and trust. Employees are more likely to communicate effectively when they trust that policies are being
enforced fairly and consistently.
CONCLUSIONS
Practically, effective communication is a key component of the banking industry's strategic
management. No doubt, inadequate and ineffective communication contributes to low productivity,
customer loss, low turnover, conflict, and absenteeism. This means that effective communication is both
the banking industry's lifeline and the pivot around which a bank's wheel turns. It is a method for
altering behavior, bringing about change, enhancing performance, and achieving goals and objectives.
Transfer of knowledge from one person to another is therefore considered crucial for an organization's
continuing growth, survival, and existence, regardless of the organization's size or purpose.

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