Marketing of Financial Services

I did my MBA from XIM, Bhubaneswar, a premier business school of India. I had dual specialization during MBA, Marketing & Finance. After MBA my destiny got me into a career of marketing. However, I never stopped following the trends in Financial domain. And, gradually when I started doing well in my marketing profession, I never could resist coming up with new ideas about the marketing of Products & Services offered by the Finance Industry. I will be sharing some of those ideas here. I wish I can provide some ideas to my friends who work in Finance Domains about what are the things they can do differently. The domain experts may also find the ideas provided here unpractical, hypothetical & worthless. Please excuse me for that. Also please comment on how did you like this article.

The same principles of marketing should hold true for the financial domain as well. Well, mostly they do. But, whats different for finance? I have heard people saying that financial services are the most difficult to market. Here are few pointers that will explain the reasons behind.

1. They will Ignore: People will not play with their money unless they trust you. If something looks fishy to them, they will ignore you. Customers get 100s of fraud emails every month saying they won a lottery they didn't even buy, they are eligible for big loans, etc, etc. So, they will definitely ignore you if they don't know you. So, building the trust is most difficult in finance.
2. Highly regulated: Authorities always watch what you do in the finance industry. You have to deliver what you have promised. And, marketers often tend to promise more than what we can deliver. Working inside the permissible boundaries sometimes makes marketers lose on the creativity side.
3. Standardised products: The products/services offered by a bank or NBFC is more or less similar to their competitors. If SBI is offering loan at 10% interest rate, so is Axis bank. If PayTM is offering e-wallets, so is Freecharge. There is very less scope of differentiation here. And, hence the job here becomes difficult
4. Calculating ROI: The most difficult calculation I would say for a Marketer would be finding Return on Investment. Because marketers have to make so many assumptions while attributing the contribution of different marketing activities, the calculations usually become approximate & imaginary. But, when you try to find ROI of Marketing in BFSI Industry, the calculations become close to impossible for Marketers. But, marketers are what they are. They will come up with a number for sure. But, there is no certainty that the numbers are correct. Only up to your faith & belief.
5. And Finally, Impact of Marketing: The consumers of BFSI industry are not those typical people who get influenced by an advertisement saying "Thanda matlab CocaCola". Even though they get influenced by your marketing efforts, the final decision will still hang on the absolute numbers they get out of your product. No matter how you advertise your mutual fund, the customer will still choose the one which gives them maximum return.

So, things are little challenging here for marketers. I really respect those marketers who work in this industry & still manage to deliver outstanding marketing efforts in spite of endless challenges. Here, I will share few marketing ideas that might be considered as alternative marketing strategies to what the companies are pursuing currently.

E-wallets | PayTM, OLA Money, TEZ

India's first Digital Wallet named Wallet365 was launched back in 2006 by Times of India Group. Yet, it took 10 years for the customers to understand what is a Digital Wallet. Meanwhile, many other companies like Airtel Money, Vodafone M-pesa, etc. tried to get into this E-Wallet space, but couldn't achieve considerable success. It was until the demonetization event which happened on 8th Nov 2016, Indian people never considered these e-wallets as viable options for transactions. But, shocking fact is that only PayTM managed to grab the opportunity & establish itself as the prime Wallet Destination for Indians. Now PayTM holds roughly 68% of market share of E-wallets. Isn't that a shocking fact for Indian Economy. Century-old financial institutions like SBI failed to cope with this newborn giant. And, the more shocking fact is SBI had to decline transactions with PayTM only to discourage the competitor. What a marketing failure by SBI & genius by PayTM.

Well, past is past. Here are some ideas for future of e-Wallets:

1. Focus on Pull than Push Strategies: So far what we have seen on the e-Wallet story is that the companies are giving incentives to people to use wallets. They get cashback on installation, cash back on a transaction, etc. etc. Even google couldn't resist getting in the game and launched TEZ app which also took the same road to gain popularity. Ok. You all have gained popularity. Now what? Consumers cannot keep using PayTM, Freecharge & TEZ simultaneously. In long term, they will rely on only one wallet. And, that would be one which will be widely accepted. If someone uses PayTM, that is because wherever he goes he can transact using PayTM. He can buy grocery from Kirana store, can book movie tickets, pay fine for not wearing a helmet while driving, recharge his mobile, all from PayTM. That is why he has chosen PayTM. So, the lesson we learned here is that wherever the consumer goes he/she should get options for transactions using that particular wallet. So, the incentive should be given to vendors to allowing & encouraging customers to transact via their wallet.
2. Defend your zone: Wallet companies need to select & defend the geographical regions to rather than madly expanding. The focus here should be gaining the exclusivity. The purpose of e-wallets is to become the new currency of the economy. If a currency is to succeed in a particular zone, then all people must accept that currency. Just imagine if all people of a small state(Say Goa) start using PayTM and nothing else. Then, PayTM becomes the currency of that state. Whoever comes to that state from outside has to open a PayTM account. All flight tickets happen of an Airport happens on PayTM. Without PayTM you can't survive in that state. Right? That is what a currency is. That is what the e-Wallet companies should be targeting right now.
3. True Value: What is the true value of the e-Wallet companies? For an economy's point of view, e-Wallets serve one purpose only. That is the elimination of the cost of maintaining cash. And, the costs involved are, raw materials, paper, printing cost, transportation cost, cost of maintaining an ATM, etc. etc. And, in return for this value-added activity, they earn the interest on the money they hold in their user's wallets. The wallet companies must not get carried away with future prospects & give cash-backs like anything.

Due to time & space constraints, I am limiting this article here. However, I will be updating this article periodically as this article is destined to be much longer than what it is now. Maybe you can revisit after a week or so to see the completed version of this article.

Thank You for Reading