fee based services
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Marketing of Fee based services
It is no longer enough to satisfy customers.You must delight them.Philip Kotler
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Fee based servicesTrends in Bank marketingWhy customers quit?
> 1% quit by themselves> 3% moved away> 5% formed other friendships
> 9% for competitive reasons> 14% because of product dissatisfaction> 68% attitude of indifference towards customers
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Fee based servicesTrends in Bank marketing
T he greatest discovery of my generation is that human beings can alter their lives by altering their attitudes of mind - William James
S uccess in lifeS killsKnowledge > 12.50% A ttitude > 87.50%Expertise
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Fee based servicesTrends in Bank marketing
C hange in attitude
Re - skilling
Product knowledge and awareness
Persistence
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Fee based servicesTrends in Bank marketing
Intense competition and risks associated with fundbased servicesBorrowers move away from bank loans to debtfunding or equity marketsDeregulation and new technology have eroded bank¶scomparative advantages
Non-bank competitors have entered into exclusivebanks¶ domains
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Fee based servicesTrends in Bank marketing
C apital adequacy norms propels the banks to take upmore service activities and less loaning activities
Banks have shifted their sales mix towards non-interest income by selling fee-based financial services
There is life beyond credit
15 to 30% of top banks in India is generated from fee-based services
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Fee based servicesTrends in Bank marketing
International studies caution against over-dependenceon non-interest income due its volatilityRisk of volatility applies more to trading (buying/sellingof securities) and treasury ( lending in call/FX market)People factor decides the quality of service deliveryPricing of corporate fee-based services arerelationship oriented and flexibleRetail services have standardised pricing and usesadvanced technology channels
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Fee based servicesCo rp o rate Fee based services
C ash management services ± integratedpayment/receivables solutions
Documentary credits and Guarantees
Bill discounting
Factoring
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Fee based servicesCo rp o rate Fee based services
Forfaiting of export receivables
Foreign Exchange services
Merchant Banking
Registrar, underwriting and custodial services
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Fee based servicesCo rp o rate Fee based services
Leasing
C redit rating
Asset management
C orporate credit cards
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Fee based servicesCo rp o rate Fee based services
Mergers, Acquisitions and recapitalisation advisory
S upplier strategies ± control of travel andentertainment expenses
Recommendations on savings process and riskmanagement
Better visibility, improved compliance
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Fee based servicesCo rp o rate Fee based services
C orrespondent Banking
Global/National trade workshops and seminars for leveraging financial tools
Loan syndication ± underwriting, arranging,distributing and trading senior floating rate debt
E ± tax payment / Income tax/service tax/centralexcise tax/ M C A 21 payments
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Fee based servicesR etail fee based services
Bancassurance ± General and L ife Insurance services
Money transfer and payment services(NEFT/RTG S /S WIFT)
Wealth management and online trading
C redit cards/ ATM cards/ Debit cards
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Fee based servicesR etail fee based services
Bills pay - utility bills payment
S afe deposit lockers
File tax returns online
Health Insurance at discounted rates ± group medclaim floater policies
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Fee based servicesR etail fee based services
Foreign Inward/outward remittances
Marketing of mutual fund products / SI Ps
S elling of hall marked, 24 carat gold coins and bars
S elf service banking ± internet banking, phonebanking, mobile banking
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Fee based servicesFo reign Exchange Services f o r Exp o rters
Advisory services on sale agreement, structuring of Documentary credit (D C )
DC advising/confirming / D C safe custody service
DC transfers ± for buyers working with sourcingagents
Export collections - Bills/cheques
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Fee based servicesFo reign Exchange Services f o r Exp o rters
Advance remittances ± foreign drafts/telegraphictransfers (TT)Buy/sell foreign currencies/travellers¶ cheques
Hedging of forex risk through derivative productsforwards, options, futures
Forfaiting ± off shore financing on export receivablesto high/medium risk countries
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Fee based servicesFo reign Exchange Services f o r Exp o rters
Benededuct ± handling charge, courier, cablecharges, discrepancy fee, reimbursement fee tobeneficiary¶s accountWhen import/export legs are handled by one bank,funds are received much earlier, documents arechecked only once
Bankers¶ AcceptancesS ecuritization
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Fee based servicesP r o ducts f o r Imp o rters
Advice on Documentary credit (D C ) structuring
Issuances of D C and standby D C s
Import collection services ± collection and delivery of shipping bill services
Import financing in foreign currencies and INR
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Fee based servicesP r o ducts f o r Imp o rters
Buyers¶ credit ± financing through overseasbranches/correspondent banks
Executing international payments/advanceremittances
S uppliers¶ credit ± credit sales effected by the supplier
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Fee based servicesP r o ducts f o r Imp o rters
S hipping guarantees and delivery order
Management of currency exposures throughderivatives
Trade account information ± credit report on thesupplier
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Fee based servicesBANK GU A R AN TEES
A set of rules developed by ICC and adopted in 1992Uniform rules for demand guarantees ICC publicationno. 458 (1992 edition)Provides framework for harmonising internationaltrade practicesEstablishes agreed upon rules for independentguarantees and counter guarantees among tradingpartners
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Fee based servicesBANK GU A R AN TEES
S pecify uniform practices for securing payment andperformance in worldwide commercial contracts
Balance the interests of the trading partners
C urb abuse in the development of international tradeguarantees
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Fee based servicesDirect GuaranteesIndirect guarantees
Advance payment GuaranteePerformance bondPayment guaranteeTender / bid bondGuarantee for missing bill of ladingS tand- by letter of credit
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Fee based servicesC redit C ards
S ilver / Gold / Platinum cards
Fuel / airlines cards
Women¶s card
Forex / prepaid card
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Fee based servicesC redit C ards
Waiver of fuel surcharge
Membership reward points
Offers/Gift hampers/discounts/cash back onholiday travel, hotels, food& beverage, shopping etc
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Fee based servicesCo rp o rate C ards
Better management of travel expensesEasier reconciliation and streamlining of businesstravelGreater visibility of travel spendPayment options with compliance of company policyC orporate meetings cardTrack, analyse and improve meeting and event spend
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Fee based servicesW ealth management
Wealth accumulation ± transformation from savers toinvestors
Wealth preservation ± protection of wealth
Wealth transfer ± transfer to legal heirs at minimumcost
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Fee based servicesW ealth management
Growing number of High Net worth Individuals (HN I)
Large proportion of younger generation with highdisposable income
Too many intricate and exotic financial instruments
Fluctuations in interest rates and foreign exchangerates between currencies
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Fee based services
W ealth managementGoldReal EstateBank DepositsEquity and mutual fundsDebt instruments
Arts & C raftsDerivatives
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Fee based services
W ealth managementC omprehensive mix of asset, debt, tax and riskmanagement strategies into one single financial
solution
Address the issues such as asset classification, estateand trust planning, retirement planning, tax advice,
business succession planning, charity foundations,employee stock options and equity strategies
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Fee based services
W ealth managementPractice independent thinking
Practice inactivity, not hyperactivity
S tay within your circle of competence
Ignore stock market forecasts