ASSIGNMENT – MARKETING OF FINANCIAL SERVICES

ANS.1

INTRODUCTION

Financial services marketing is the process through which financial organisations engage with and
delight their consumers. They use a range of marketing and pricing tactics to promote and value their
financial goods. Finance institutions, insurance businesses, and investment funds One of the primary
goals of digital marketing for financial services is to increase client loyalty and trust. Implementing a
digital strategy is critical for increasing awareness and reaching more prospective consumers. To make
this work, financial institutions have begun allocating a percentage of their budget to digital marketing
across numerous media platforms. Financial institutions embrace omnichannel marketing to reach a
larger audience. As you may have observed, the frequency of email and SMS alerts from banking
institutions has increased. In order to increase conversions, businesses reach out to potential
customers through targeted campaigns and advertisements that are tailored to their lifestyle.

CONCEPT AND ANALYSIS

The following three elements of digital marketing for financial services are crucial:

1. Consumer involvement and experience - In today's hyperconnected environment, improving

customer experience and engagement is essential to business success. Customers in the Millennial
and Gen Z generations like companies that offer fresh and engaging material on social media
platforms. By offering top-notch customer service, financial marketers may connect with their
target audience. Nowadays, practically everyone uses social media. For a brand to expand and
become more visible on social media, a presence there may be necessary. Also aware of this
should be financial institutions. Simple promotional advertising may have a significant impact
when shared on social media sites like Twitter, Facebook, YouTube, and Instagram. Your brand is
easily accessible to customers, and vice versa. Having a social media presence is very advised in
this cutthroat economy.
2. Using Omnichannel Marketing - Marketing using several channels and platforms may be able to
reach and engage more consumers. The user experience must be simple and consistent across all
channels for financial institutions using an omnichannel approach. Website design should adhere
to functionality that engages consumers and encourages them to return for more in order to
develop a seamless user experience. Additionally, websites must to provide seamless navigation
on mobile devices. Mobile-based digital marketing can help financial marketers reach more
customers as PCs and tablets become obsolete. It is crucial that the audio and video material is
optimised for mobile platforms. Mobile marketing has proven to be very successful at grabbing
consumers' attention and changing their buying habits.
3. Pursuing new markets and expand reach- Personalised adverts could be created by analysing
different consumer profiles and then customising them based on demographics, purchasing
history, past purchases, and other characteristics in order to boost customer engagement and
overall experience. Personalization helps build a consumer base that is more devoted. By
providing personalised suggestions, you may influence your customers' buying decisions. Clients
who feel their demands are being addressed remain loyal to the brand and eventually turn into
brand evangelists.

The level of digital revolution in the banking and financial industry is unprecedented in today's
pandemic-driven world. In the last 18 months or so, not only have bank visits plummeted to nearly
nil, but so have call volumes to call centres. The pandemic has, however, sped up the pace of digital
transformation in the banking and financial sectors. One of the major factors that has affected the
industry is the introduction of digital technology in financial transactions. Today, contactless
payment systems like Apple Pay, Samsung Pay, and Google Pay are commonplace in every country.

Banks and other financial organisations no longer place a high focus on expanding their physical
presence. Banks and other financial organisations are now concentrating on expanding client access
points rather than branch networks. In order to save expenses (involved with maintaining and
managing physical channels) and engage customers by offering 24/7 access to financial services so
they may transact at their convenience, they are prepared to invest in digital kiosks and channels.

Even with tiny financial banks, there is a digital drive. In the past, these banks had a highly high-
touch business style that involved regular communication between bank officials and clients. The
contact centres for these banks have since been dispersed, and cloud-based contact centres have
also been implemented. This has improved the banks' interactions with their clients.

Because of technology improvements, BFS organisations have been forced to cut documentation
and spend money teaching staff members how to use digital services. The best solutions to simplify
internal processes in this situation are to automate processes to reduce their reliance on humans
and to create a system-driven strategy that begins with operations and affects all bank activities.
Conversational bots and WhatsApp's multichannel digital offering have benefitted financial
institutions.

CONCLUSION

The banking and financial sector is going to experience a paradigm change that will necessitate a full
revision of marketing strategies and perspectives, a transition from digitization to digital
transformation, and a transition from campaign personalisation to product personalization. This
requires businesses to provide clients with relevant services that meet their demands and to
collaborate with the proper partners to create superior end-to-end solutions rather than fragmented
solutions. The primary notion behind focusing on the complete customer experience and placing
consumers at the centre of digital transformation is to guarantee that they are happy at every stage.

ANS.2

INTRODUCTION

When a borrower obtains a loan from a lender with the intention of repaying it later, this is referred
to as obtaining credit. The credit score determines a person's creditworthiness, or ability to repay
debt. When determining your credit score, your payment history, the amount of debt you have, and
hence the length of your credit history are all taken into account. Higher credit scores suggest that
you have previously demonstrated responsible credit behaviour, which can give prospective
creditors and lenders greater confidence when evaluating a credit request.

Four credit information companies in India have received licences from the Reserve Bank of India.
Experian, Equifax, Highmark, and Credit Information Bureau (India) Limited are a few of these
(CIBIL). The most popular credit score in India is the CIBIL rating. A three-digit number between 300
and 900, with 900 being the highest, makes up the CIBIL credit score.

A CIBIL credit score of 750 or greater is considered good. Credit ratings are used by banks and other
lending institutions to assess your creditworthiness. A better credit score enhances the probability of
your loan getting accepted. Additional benefits like as lower interest rates, better payback terms,
and a faster loan approval procedure are also possible.
CONCEPT AND ANALYSIS

Nowadays, cash is typically used to pay for almost everything. Since not everyone has it, there are
several methods to make money or borrow money. Even if there are a lot of banks and lending
institutions now, the majority of individuals could still think borrowing money is easy. The majority
of financial institutions, however, have a set of criteria to ascertain a borrower's capacity to repay
the loan due to the risk involved in lending. At this time, a credit score is typically taken into account.
The credit score of an application is one of the crucial variables that lenders take into account when
establishing their eligibility. So, for borrowers, having a high credit score is essential. You may get
better interest rates, reduce your overall debt, and increase your savings with its help.

About 35% of your credit score is determined by your payment history. My first piece of advise is to
always pay your payments on time. This does not imply that the full debt must be repaid. You can
make minimum payments using credit cards or, in some cases, services. For a wide range of
demands, it is essential to have a number of credit alternatives available.

Ways to improve credit score

 Lenders will not issue credit of any form, including personal loans, business loans, mortgages,
vehicle loans, and other types, unless the borrower's credit record is first checked. The first
hurdle is determining your credit score. However, there is no need to worry because many
fintech businesses and other lenders now provide free credit score checks. It is critical to keep
track of your credit score on a frequent basis. If the score goes below 700, the focus must be on
ensuring that payments are completed on time in order to raise it.
 One method of raising your credit score is to consolidate all of your debt. For instance, a person
can owe a lot of money on many credit cards from multiple issuers. The credit score would be
negatively impacted even if only one payment was accidentally missed. One option to tackle this
situation is to obtain a personal loan to pay off all of these high-interest debts. It will be
considerably simpler to only have to track one EMI payment each month. Additionally, personal
loans are available with much lower interest rates than credit cards.
 Furthermore, credit card cash withdrawals are not recommended. Although credit card cash
withdrawals earn reward points, there are several additional expenses to consider. Late
payment penalties, loan fees, and cash advance fees are examples of these. Finally, one may
become trapped in a debt trap with a high interest rate. As a result, the credit score would
deteriorate.
 The best choice for immediate assistance is to draw on savings or borrow money from relatives
or friends in an emergency. A rapid, short-term personal loan with flexible EMI options may be
offered by fintech companies. The interest rates will, of course, be lower than those for credit
cards.
 Additionally, have a long-term mindset and start setting aside some cash each month to build an
emergency fund. Eliminate or cut unnecessary spending, with the exception of necessities, to
control this.
 Additionally, refrain from using your credit card to the fullest extent possible or using an
overdraft. This suggests a lack of financial management skills. Lenders keep track of credit
overuse.
 Avoid submitting loan applications to several lenders at once. A combination of secured and
unsecured credit is advised since it can boost one's credit score. However, having an excessive
amount in one category might upset the balance and lower your credit score.
 And last, maintaining a high credit score depends on paying your obligations on time, including
credit card, loan, utility, and other expenses. To keep your credit score in top condition, abide by
these suggestions.

CONCLUSION

If you have good credit, you will be more likely to be approved for a mortgage, particularly a home
loan. Mortgage interest rates are projected to fall, and you may be able to negotiate a lower
insurance price. Existing mortgages can be refinanced at a lower interest rate. Bankers might provide
a flexible repayment option as well as a lower processing fee. A good credit score increases your
chances of getting a loan or credit card, whereas a low credit score decreases your chances. Banks
do not like to give loans or credit cards to people with low credit ratings because they do not trust
them to manage their money responsibly. If you apply for a card or loan while having a poor credit
score, you may be given a minimal credit limit or an extremely high interest rate.

ANS.3 (a)

INTRODUCTION

The term "life insurance" describes a category of protection against the loss or demise of a life.
Furthermore, there may be no maturity or investment component. Comparable to a term insurance
policy would be a pure chance protection plan. If the promised lifetime expires earlier than
expected, pure risk insurance pays out and offers financial security. The life insurance company may
pay the nominee the guaranteed amount if the nominee passes away within the policy period (life
cover amount). This implies that beneficiaries will not receive compensation if they live longer than
the policy's term. In a similar vein, the life insurance company will not give the insured any benefits.
Period plans no longer provide adult benefits.

CONCEPT AND APPLICATION

A ULIP, as the name suggests, combines the benefits of insurance and investing into a single product.
A fundamental advantage of ULIPs over traditional wealth enhancement devices is that they provide
lifestyle coverage. It also safeguards your loved ones' futures against life's unexpected twists and
turns. A beneficiary receives financial protection if the owner of an existing insurance policy dies
while the policy is still in existence. A term insurance plan provides life insurance for a certain yearly
limit. It is known as a term plan.

Ashwin must follow the same time plan. The following are the advantages of the timetable:

1. Greater life insurance coverage: Period lifestyle insurance programmes cost less than
endowment policies. As a result, it may be possible for someone to get more substantial life
insurance for less money. By paying payments, you may, for instance, get a 30-year-old time
plan with 30-year insurance for Rs 1 crore.
2. Riders: Policyholders may add riders to the time plan to make it more advantageous. Because
they acquired a critical disease rider or plan, the insured person is able to receive the amount
specified if they are diagnosed with a critical condition. It also includes a comparable death
benefit for the duration of the policy. There are also optional riders available, such as those for
disability, unemployment, and premium forgiveness. By picking riders depending on the
insured's needs, the current coverage may be made more outstanding, suitable, and relevant.
3. Enhanced cover: Positive insurance firms allow customers to expand their insurance coverage at
various periods of life. For example, a policyholder's life insurance coverage can be increased by
 50% when they marry and 25% when they have children. This allows him to begin with basic
coverage and progressively expand it as his commitments and ability to pay premiums grow.

CONCLUSION

Insurance firms, however, have been the most inventive when it comes to deadlines. The internet
has made it easy to shop for term insurance. Healthy individuals can access the insurer's time plan
online without getting checked out by a doctor.

ANS. 3(b)

INTRODUCTION

A Systematic Investment Plan (SIP), sometimes referred to as SIP, is a tool provided by mutual funds
to help investors make disciplined investments. The SIP option enables an investor to make fixed
investments in the mutual fund scheme of their choice at predetermined intervals. The pre-
determined SIP periods might be weekly, monthly, quarterly, semi-annually, or yearly, and the
predetermined amount of money can be as little as Rs. 500.

When you make a one-time, lump-sum investment in a mutual fund, you are locking in a single, large
quantity of money. This contrasts with dispersing it over time, as in SIP

CONCEPT AND APPLICATION

Many people struggle or are unsure of how to invest their money in mutual funds. A single sizable
investment or a series of smaller monthly contributions are both options offered by mutual funds to
investors. A "Systematic Investment Plan," or SIP, is the name given to the second choice, whereas a
"Lump sum" investment is the name given to the first. A brighter financial future depends on
selecting the right investments. To avoid overtaxing your current, it's crucial to pick the right
investing strategy. Nowadays, everyone wants to invest in mutual funds, but very few people know
how.

As a much better alternative to the lump-sum approach, the SIP (Systematic Investment Plan)
addresses significant issues that people encounter when beginning their investments.

 Possibility of making modest investments: The SIP function enables you to make monthly
mutual fund investments starting at only Rs 500. If you consider the impact that even a tiny
monthly contribution may have, I can state with certainty that your money will begin to increase
gradually but steadily, eventually building up to a larger corpus.
 Lowers risk: In fact, beginning small may be preferable in the long run. Because even if mistakes
were made at first, there would be little money on the line. On the other hand, if you continue
to wait until you have amassed a sizeable sum before investing in your first mutual fund, you risk
being too late. This is so that your mutual fund investments can rise quickly over time.
 Controlling stock market volatility: Even the most experienced investors can't timing the
market, that is, put money in when it's cheap. This is why making large investments at once may
be hazardous.

CONCLUSION

If you are new to investing in mutual funds, SIPs are great. For them to be useful, their temporal
spans must also be suitably long. As a result, frequent SIP investments in equity schemes are
appropriate for raising enough money to accomplish a goal. If you want to set aside a percentage of
your money each month and see it increase over time, so that you may use it to pay for your child's
further education. An equity SIP is the best option in that situation. But let's say you have additional
money—perhaps, from a bonus, the sale of a piece of land, or your retirement fund—and you're not
sure how to invest it. Then, you can think about investing a large sum in a debt or liquid fund as a
one-time investment.