THE ROLE OF MARKETING IN
FINANCIAL SERVICES
Ing. Kateřina Matušínská, Ph.D.
MARKETING OF FINANCIAL SERVICES/PEMNAMAF
OUTLINE OF THE LECTURE
1. Financial markets and marketing
2. Financial services marketing
3. Selected participants in the financial market
4. Financial arbitrator
5. Financial literacy
THE ROLE OF MARKETING IN FINANCIAL SERVICES
1. FINANCIAL MARKETS AND MARKETING
• MARKET - a collection of current and potential buyers of certain
goods. (Kotler)
• FINANCIAL SERVICES MARKET - a system of institutions and
instruments, ensuring the movement of money and capital
(offered in the form of securities) in all its forms among different
economic actors; based on supply and demand.
• Effective functioning of financial markets is crucial for economic
growth and stability, for example during the economic crisis.
THE ROLE OF MARKETING IN FINANCIAL SERVICES
SPECIFICS OF FINANCIAL MARKET IN THE CZECH
REPUBLIC
• Strong dominance of banks.
• Medium-sized banks constantly enhance their activity and
represent one of the driving forces in the area of market
innovations.
• Retail banking is quite dynamic segment of the financial market.
• The financial sector in the country is supervised and regulated by
the Czech National Bank (ČNB).
THE ROLE OF MARKETING IN FINANCIAL SERVICES
MARKETING IN FINANCIAL MARKET
• MARKETING is a social control process by which individuals
and groups obtain what they need and want through creating,
supply and exchange of products and values with others.
(Kotler)
• FINANCIAL MARKETING - a human activity that uses
exchange processes aimed at satisfying human wants and
needs in the financial services area. And all this while
respecting the characteristics of the financial sector as a whole,
as well as the specific features of individual financial subjects.
THE ROLE OF MARKETING IN FINANCIAL SERVICES
SPECIFICS OF FINANCIAL SECTOR AND MARKETING
• Typical (predominating) business object  money.
• A very wide spectrum of clients.
• The specific distribution points  IT use.
• Dependence on macroeconomic developments – COVID-19!
• Communication with the public (CSR)  stability is important,
trustworthiness and security of the financial institution.
• Cases of negative media coverage.
• The need to address potential clients with respect to the way
they make decisions  customization.
THE ROLE OF MARKETING IN FINANCIAL SERVICES
2. FINANCIAL SERVICES MARKETING
• SERVICE is any activity or benefit that one party can offer to
another party. Services are usually intangible and are not
connected with property. Production of services may or may not
be associated with the tangible product.
• FINANCIAL SERVICE is any activity or benefit associated with
the finances (current account, credit card, mortgage, life
insurance, savings, ...)
THE ROLE OF MARKETING IN FINANCIAL SERVICES
FINANCIAL SERVICES CHARACTERISTICS
 Intangibility
 Inseparability
 Variability
 Perishability
 No possibility to own
SERVICE
FINANCIALSERVICE
⚫ Responsibility
⚫ Pre- or post-
consumption
⚫ Duration of contract
THE ROLE OF MARKETING IN FINANCIAL SERVICES
X
MARKETING MIX OF FINANCIAL SERVICES
Product
Marketing
mix„4P“
Marketingmix„7P“
Price
Place
Promotion
People
Physical
evidence
Process
THE ROLE OF MARKETING IN FINANCIAL SERVICES
MARKETING MIX 4P? X 4C?
4P 4C
SELLER  CUSTOMER CUSTOMER  SELLER
PRODUCT CUSTOMER VALUE
PRICE COST TO THE CUSTOMER
PLACE CONVENIENCE
PROMOTION COMMUNICATION
THE ROLE OF MARKETING IN FINANCIAL SERVICES
CURRENT CUSTOMER SPECIFICS
• Requirements for individual approach.
• Focus on experience and emotions.
• Time importance.
• Less loyal.
• Attitude change to debt.
• Higher demands on financial services.
• Ready to use IT technology.
THE ROLE OF MARKETING IN FINANCIAL SERVICES
CURRENT FINANCIAL INSTITUTION SPECIFICS
• Activities in customer retention.
• Higher use of market segmentation.
• New forms of traditional branches.
• Low cost banks and banks without branches.
• The multichannel communications.
• Focusing on long-term and mutually beneficial relationship
management (CRM).
• The use of customer databases.
• The use of marketing tools (Cross Selling, marketing
communication, ...).
• Activities within the CSR (financial literacy projects, …).
• Using IT (business process automation, the concept of a paperless
bank).
• Dynamic changes in the field of payment cards.
• Significant role of mobile phones and social networks.
• Greater attention to safety and protection against fraud in financial
transactions.
• Marketing research in financial services (mystery mailing, mystery
calling, mystery shopping, ....).
THE ROLE OF MARKETING IN FINANCIAL SERVICES
3. SELECTED PARTICIPANTS IN THE CZECH FINANCIAL
MARKET
• Financial institutions offer their services in two basic types of
market:
• B2B  corporate banking
• B2C  retail banking
• Market of bank services
• Market of insurance services
• Market of building savings banks
THE ROLE OF MARKETING IN FINANCIAL SERVICES
MARKET OF BANK SERVICES
• Act no. 21/1992 Coll., About Banks
• Act no. 6/1993 Coll., About ČNB
• Act no. 229/2002 Coll., About financial arbitrator
• Act no. 634/1992 Coll., About consumer protection
• Act no. 89/2012 Coll., Civil Code
• Act no. 284/2009 Coll., About Payments
• And others…
• Czech Banking Association (www.czech-ba.cz) since 1992, a
voluntary association of subjects, doing business in finance and
closely allied areas (currently full membership cca 99 % of the
banking sector), issued a code of ethics, CBA promotes the
interests of its members in communication with the government
and the public, harmonization of EU banking legislation,
prevention of financial crime and financial education activities.
Code clients mobility!
THE ROLE OF MARKETING IN FINANCIAL SERVICES
MARKET OF INSURANCE SERVICES
• Act no. 277/2009 Coll., About Insurance
• Act no. 38/2004 Coll., About insurance intermediaries and
independent loss adjusters
• Act no. 89/2012 Coll., Civil Code
• Act no. 37/2004 Coll., About insurance policies
• And others …
• Insurance = service which means security of particular entity from
the effects of exposure to risk.
• CAP (www.cap.cz) since 1994 interest group of commercial
insurers, whose task is to safeguard the interests of clients,
insurance companies and the promotion of mutual cooperation.
Code of ethics in insurance, the fight against insurance fraud!
THE ROLE OF MARKETING IN FINANCIAL SERVICES
MARKET OF INSURANCE SERVICES
INSURANCE DEVELOPMENT IN THE CZECH REPUBLIC
YEAR LIFE INSURANCE NON-LIFE INSURANCE
2010
? ?
2012
2014
2016
2018
2020
2022
THE ROLE OF MARKETING IN FINANCIAL SERVICES
MARKET OF BUILDING SAVINGS BANKS
• Act no. 96/1993 Coll. About building savings and state support for
building savings.
• Act no. 21/1992 Coll. About banks
• And others ….
• The Association of Czech Building savings banks
(www.acss.cz) - the aim is to promote the common interests of
subjects operating in the country.
THE ROLE OF MARKETING IN FINANCIAL SERVICES
4. FINANCIAL ARBITRATOR
• Since 1. 1. 2003 (Act no. 229/2002 Coll., About financial
arbitrator) + other legislative norms.
• Extrajudicial body for resolving disputes between customers and
financial institutions, exclusively on the proposal of the customer
(consumer).
• Quick, free and effective handling of disputes between citizens
and selected financial institutions.
THE ROLE OF MARKETING IN FINANCIAL SERVICES
TYPES OF SOLVED DISPUTES
• Payment services (issuance of cash from ATM, misuse of stolen
credit cards, illegally charged a penalty of the loan, ...).
• Credits, loans.
• Investment.
• Exchange activity.
• Life insurance.
• Building savings.
• …
THE ROLE OF MARKETING IN FINANCIAL SERVICES
5. FINANCIAL LITERACY
• Financial literacy is defined as „a set of knowledge, skills and
abilities of a citizens which are required to secure financially
themselves and their families in contemporary society and to
be active in the market of financial products and services.
• Financially literate citizen is familiar with the issue of money and
prices and is able to manage personal/family budget responsibly,
including the management of financial assets and financial
liabilities with respect to changing life situations.
• The level of financial illiteracy in the Czech Republic is 56 – 65 %.
• The existence of many projects to increase the financial literary in
the Czech Republic.
THE ROLE OF MARKETING IN FINANCIAL SERVICES
THE PARTS OF FINANCIAL LITERACY
• Cash literacy - the competencies necessary to manage cash
and non-cash transactions and then management of tools for
this purpose (current account, payment instruments, etc.).
• Monetary literacy - the competencies necessary for price
mechanisms and inflation understanding.
• Budgetary literacy - necessary competencies to manage
personal/family budget and it also includes the ability to handle
different situations in life from a financial perspective.
• Legal literacy
THE ROLE OF MARKETING IN FINANCIAL SERVICES
5 ASPECTS OF FINANCIAL LITERACY
• To respect a personal budget within some period of time.
• To know what you pay for.
• To plan own spending.
• To be able to choose among financial products.
• To know current information about finance and economics.
• The main problems of insolvent clients: they do not take into
account their income and expenses, they have no cash
reserves, they read poorly the contracts and they settle contracts
with unfavourable conditions, they repay loans with other loans =
debt spiral, ...
THE ROLE OF MARKETING IN FINANCIAL SERVICES