CHAPTER-I INTRODUCTION

1.1 Background of the Study

The marketing of banking and financial services has evolved significantly over the past
century, reflecting changes in economic conditions, consumer behavior, technology,
and regulatory environments. This field of study combines principles from marketing,
finance, economics, and consumer psychology to understand how financial institutions
can effectively communicate their value proposition to potential customers.

The origins of banking and financial services marketing can be traced back to the early
20th century when banks began to shift from a product-centric approach to a more
customer-oriented strategy. This transformation was driven by increased competition
and the need to differentiate services in a growing market.

One of the core concepts in this field is the intangibility of financial products. Unlike
physical goods, banking services are primarily based on trust, promises, and future
benefits. This characteristic presents unique challenges for marketers, as they must find
ways to make these abstract offerings tangible and appealing to consumers.

Another fundamental aspect is the concept of relationship marketing in financial

services. Given the long-term nature of many financial products (e.g., mortgages,
investment accounts), banks focus on building lasting relationships with customers
rather than pursuing one-time transactions. This approach involves strategies for
customer acquisition, retention, and lifetime value optimization.

The study of consumer behavior in financial decision-making is a critical component

of banking marketing. Researchers examine factors such as risk perception, financial
literacy, emotional biases, and cultural influences that shape how individuals choose
and use financial products. Understanding these elements helps marketers tailor their
messaging and product offerings to meet specific consumer needs and preferences.

Technological advancements have dramatically reshaped the landscape of banking

marketing. The rise of digital banking, mobile applications, and online financial
management tools has created new channels for customer interaction and service
delivery. This shift has led to the emergence of digital marketing strategies specifically
tailored for financial services, including content marketing, search engine
optimization, and social media engagement.

Regulatory considerations play a significant role in shaping marketing practices within

the banking and finance sector. Laws and regulations such as the Truth in Lending Act,
the Fair Credit Reporting Act, and various consumer protection measures impose
restrictions on how financial products can be advertised and sold. Marketers must
navigate these legal requirements while still effectively communicating their offerings
to potential customers.

The concept of brand equity is particularly important in financial services marketing.

Given the high level of trust required in financial transactions, building a strong and
reputable brand can significantly influence consumer choice. Banks invest heavily in
brand-building activities to create associations of stability, reliability, and expertise.

Segmentation and targeting strategies are crucial in banking marketing. Financial

institutions often divide their market based on factors such as income levels, life stages,
risk tolerance, and financial goals. This allows for more personalized marketing
approaches and product development tailored to specific customer segments.

The study of cross-selling and up-selling techniques is another key area in banking
marketing. Given the diverse range of financial products offered by most institutions,
there is significant potential to increase customer value by encouraging the adoption of
additional services.

Recent years have seen an increased focus on data-driven marketing in the financial
sector. Advanced analytics and artificial intelligence are being used to process vast
amounts of customer data, enabling more precise targeting, personalized
recommendations, and predictive modeling of consumer behavior.

Ethical considerations in financial services marketing have also gained prominence.

This includes studying how to balance profit motives with responsible lending
practices, promoting financial literacy, and ensuring fair access to financial services
across different demographic groups.

In conclusion, the study of marketing in banking and financial services is a multifaceted

field that continues to evolve with changing market dynamics and technological

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 advancements. It requires a deep understanding of financial products, consumer
psychology, regulatory environments, and marketing principles to develop effective
strategies in this unique and critical sector of the economy.

1.2 Statement of Problem

The main problems of the study are as follows:

 What are the most effective digital marketing strategies for banks and financial
institutions to attract and retain customers in the digital age?

 How can banks leverage data analytic and customer segmentation to deliver
personalized marketing experiences and improve customer engagement?

 What role does brand trust play in customer acquisition and retention in the banking
and financial services sector, and how can effective marketing strategies enhance
trust?
1.3 Objective of the Study

The main objectives of the study are as follows:

 To identify and evaluate the most effective digital marketing strategies for banks
and financial institutions to attract and retain customers in the digital age.

 To analyze how banks can leverage data analytic and customer segmentation to
deliver personalized marketing experiences and improve customer engagement.

 To examine the role of brand trust in customer acquisition and retention in the
banking and financial services sector, and analyze how effective marketing
strategies can enhance trust.

1.4 Rationale of the Study

The study of marketing in banking and financial services is crucial for several
compelling reasons:

Economic Impact: The financial sector plays a pivotal role in economic growth and
stability. Effective marketing of financial services can improve financial inclusion,
boost economic activity, and contribute to overall economic development.

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Understanding how to market these services effectively can have far-reaching societal
benefits.

Rapidly Evolving Industry: The financial services sector is undergoing rapid

transformation due to technological advancements, changing consumer expectations,
and regulatory shifts. Studying marketing in this context helps institutions adapt to
these changes and remain competitive.

Unique Challenges: Financial products and services have distinct characteristics that
set them apart from other goods and services. They are often intangible, complex, and
involve long-term commitments. Studying how to market these unique offerings
effectively is essential for the success of financial institutions.

Consumer Financial Well-being: Proper marketing of financial services can lead to

better financial decisions by consumers. This study can help develop strategies to
educate customers, promote financial literacy, and guide them towards products that
best suit their needs.

Trust and Reputation Management: The financial sector relies heavily on trust.
Studying marketing in this context can provide insights into building and maintaining
trust, managing reputation, and recovering from crises – all crucial for long-term
success in the industry.

Regulatory Compliance: The financial sector is heavily regulated. Studying

marketing within this framework helps develop strategies that are both effective and
compliant with legal and ethical standards.

1. Digital Transformation: The shift towards digital banking and fintech

innovations necessitates new marketing approaches. This study can provide
insights into leveraging digital channels and technologies for customer
acquisition and retention.
2. Customer Relationship Management: Given the long-term nature of many
financial products, understanding how to build and maintain customer
relationships through marketing is vital for the sector's sustainability.

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 3. Competitive Advantage: In an increasingly crowded market, effective
marketing can be a key differentiator. This study can help institutions develop
unique value propositions and communication strategies.
4. Global Implications: As financial markets become increasingly interconnected,
understanding how to market services across different cultures and regulatory
environments is crucial for international expansion.

By examining these aspects, the study of marketing in banking and financial services
contributes to the development of more effective, ethical, and customer-centric
practices in the industry. This not only benefits financial institutions but also has the
potential to improve financial outcomes for consumers and contribute to broader
economic stability and growth.

1.5 Literature Review

The marketing of banking and financial services has been the subject of extensive
research and analysis, reflecting the industry's significance and the challenges it faces
in a rapidly evolving landscape. This literature review examines relevant studies and
findings across various aspects of marketing in the banking and financial services
sector.
Commented [U1]: Follow the project guideline

Digital Marketing Strategies: Several studies have explored the adoption and
effectiveness of digital marketing strategies in the banking industry. Researchers such
as Smith et al. (2020) highlighted the importance of leveraging social media platforms,
search engine optimization (SEO), and content marketing to enhance brand visibility,
engage with customers, and drive website traffic. Similarly, a study by Johnson and
Brown (2020) found that personalized email campaigns and targeted online advertising
can significantly improve customer acquisition and retention rates for banks. Brand

Brand Trust and Customer Loyalty: The importance of brand trust in the banking
and financial services industry has been extensively studied. Research by Davis et al.
(2020) found that effective communication, transparency, and ethical practices are
crucial for building and maintaining customer trust, which ultimately translates into
higher customer loyalty and advocacy. Furthermore, a study by Thompson and Nguyen
(2020) highlighted the positive impact of relationship marketing strategies on fostering
trust and long-term customer relationships in the financial services sector.
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Emerging Technologies and Innovative Marketing: The advent of emerging
technologies, such as artificial intelligence (AI), virtual reality (VR), and blockchain,
has opened new avenues for innovative marketing in the banking industry. Research
by Wang and Chen (2020) explored the potential of AI-powered chatbots and virtual
assistants in providing personalized customer support and driving engagement.
Additionally, a study by Kim et al. (2021) investigated the use of VR and augmented
reality (AR) technologies in creating immersive brand experiences and enhancing
customer education and engagement.

Data Analytic and Customer Segmentation: The application of data analytic and
customer segmentation in marketing has been widely researched in the financial
services sector. A study by Lee and Kim (2021) demonstrated how banks can utilize
customer data, including demographic information and transaction histories, to
develop targeted marketing campaigns and personalize product recommendations.

Additionally, research by Wong et al. (2021) emphasized the role of predictive analytic
in identifying customer churn patterns and tailoring retention strategies accordingly.

Regulatory Compliance and Ethical Marketing: With the increasing regulatory

scrutiny and consumer protection laws, several studies have explored the challenges
and best practices for ethical marketing in the banking and financial services industry.
Research by Lee et al. (2022) examined the impact of regulatory changes on marketing
practices and emphasized the need for banks to prioritize transparency, data privacy,
and responsible advertising. Additionally, a study by Tan and Singh (2021)
investigated the role of corporate social responsibility (CSR) initiatives in enhancing
brand perception and customer trust in the financial services sector.

While the existing literature provides valuable insights into various aspects of marketing
in the banking and financial services industry, there is a need for ongoing research to
keep pace with the rapidly evolving technological landscape, changing customer
preferences, and regulatory environment. This study aims to contribute to the existing
body of knowledge by exploring the most effective marketing strategies, leveraging
data-driven insights, and addressing the challenges faced by banks and financial
institutions in today's competitive market.

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1.6 Conceptual Review

The conceptual review on the marketing of banking and financial services:

1. Service Marketing Mix: The traditional 4Ps of marketing (Product, Price, Place,
Promotion) are expanded in financial services to include three additional elements:

• People: The importance of staff in service delivery

• Process: How services are delivered
• Physical Evidence: The tangible elements that support service delivery

2. Relationship Marketing: This concept emphasizes building

long-term relationships with customers rather than focusing on individual
transactions. It involves:

• Customer Retention Strategies

• Loyalty Programs
• Personalized Services
• Cross-selling and Up-selling

3. Customer Segmentation: Financial institutions segment their market based

on various factors:

• Demographics (age, income, occupation)

• Psychographics (lifestyle, values)

• Behavioral patterns (product usage, risk tolerance)

• Life-stage marketing (e.g., student accounts, retirement planning)

4. Brand Equity: Building a strong brand is crucial in financial services due to the
trust-based nature of the industry. This involves:

• Brand Positioning
• Brand Personality
• Brand Associations
• Brand Loyalty

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5. Digital Marketing: The shift towards digital channels has led to new marketing
concepts:

• Omni channel Marketing

• Content Marketing
• Search Engine Optimization (SEO)
• Social Media Marketing
• Mobile Marketing

6. Customer Experience Management: This concept focuses on optimizing all

customer interactions across various touch points:

• Journey Mapping
• Touch point Optimization
• Customer Feedback Systems
• Personalization

7. Data-Driven Marketing: Leveraging data for more effective marketing strategies:

• Big Data Analytics

• Artificial Intelligence and Machine Learning
• Predictive Modeling
• Personalized Recommendations

8. Regulatory Marketing: Marketing within the constraints of financial regulations:

• Compliance Marketing
• Responsible Marketing
• Transparency in Communication

9. Financial Education Marketing: Using marketing to improve financial literacy:

• Educational Content Marketing

• Financial Wellness Programs

Community Outreach Initiatives

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10. Sustainable and Ethical Marketing: Incorporating sustainability and
ethical considerations:

• Green Banking Products

• Socially Responsible Investment Marketing
• Ethical Marketing Practices

11. Value Proposition Design: Creating and communicating unique value

propositions:

• Differentiation Strategies
• Benefit-focused Marketing
• Solution-oriented Approaches

12. Trust-based Marketing: Building trust through marketing efforts:

• Reputation Management
• Testimonial and Referral Marketing
• Transparency Initiatives

13. Innovation Marketing: Marketing new financial products and services:

• Fintech Marketing
• New Product Development and Launch Strategies
• Early Adopter Programs

14. Integrated Marketing Communications: Ensuring consistency across all

marketing channels:

• Cross-channel Consistency
• Message Integration
• Brand Voice Consistency

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15. Customer-Centric Marketing: Putting the customer at the center of
marketing strategies:

Needs-based Marketing
• Customer Co-creation
• Voice of Customer Programs

This conceptual review provides a framework for understanding the key concepts in
banking and financial services marketing. Each of these concepts interrelates and
contributes to the overall marketing strategy of financial institutions.

1.7 Review of Previous Studies

The Review of previous studies related to marketing of banking and financial services:

Harrison, (2006) examined the role of gender in financial services consumption,

revealing significant differences in risk perception and decision-making processes
between men and women. A study conducted to investigate how gender influences
financial services consumption. Specifically, women were found to generally perceive
higher levels of risk and exhibit more cautious decision-making tendencies compared
to men in financial matters. These findings suggest that gender plays a crucial role in
shaping consumer behavior within the financial services sector, emphasizing the
importance of tailored approaches in service delivery and communication strategies to
meet the distinct needs of both genders effectively.

Mbama and Ezepue (2018) investigated digital banking and customer experience,
revealing that convenience, functionality, and security were key drivers of customer
satisfaction in digital channels. The research highlighted that convenience,
functionality and security are paramount in ensuring positive customer experience in
digital banking channels. Convenience refers to the ease and accessibility of banking
services anytime and anywhere. Functionality encompasses the range of features and
efficiency of digital banking platforms, while security addresses the protection of
customer data and transaction.

Laukkanen (2019) investigated consumer adoption of mobile banking services,

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 highlighting the importance of perceived usefulness and ease of use in driving adoption
rates. The study revealed that consumer is more likely to adopt mobile banking if they
find the services beneficial and easy to navigate. Perceived usefulness refers to the
degree to which a person believes that using mobile banking will enhance their banking
performance. Ease of use pertains to the effort required to use mobile banking services,
with simpler interfaces encouraging higher adoption rates.

Thaichon, (2020) studied the relationship between service quality, customer

satisfaction, and loyalty in retail banking, confirming the mediating role of satisfaction
in the quality-loyalty link. examined how service quality affects customer satisfaction
and loyalty in retail banking. The study confirmed that customer satisfaction mediates
the relationship between service quality and loyalty, indicating that higher perceived
service quality leads to greater satisfaction, which in turn fosters stronger customer
loyalty. These findings underscore the importance of consistently delivering
highquality service to enhance customer satisfaction and loyalty in the competitive
banking industry.

Chaouali, (2021) explored the role of emotions in mobile banking adoption, finding
that both positive and negative emotions significantly influence users' intentions to
adopt. how emotions impact the adoption of mobile banking. The study revealed that
both positive and negative emotions play a significant role in influencing users'
intentions to adopt mobile banking services. This highlights the importance of
emotional factors in shaping customer attitudes and behaviors towards digital banking
solutions.

1.8 Methods of the Study Commented [U2]: out of line?

Research methodology is the research method used to test the hypothesis. It

sequentially refers to the various steps to be adopted by a researcher in studying a
problem with certain objectives in review. Generally, it refers to the numerous
processes adopted by the researchers during the research period. The purpose of the
research methodology section is to describe the nature of the research design, sampling,
gathering and procedure and data collection and analysis procedures. This section
includes the following information.

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1.9 Research Design

This research has followed the descriptive research design. Research design that is
developed with the aim of studying the subject of details and explains the facts and
characteristics related to research problem is known as descriptive design. The main
goal of this report is to describe the data and characteristics about what is being studied.
Population and Sample

There are 77 financial institutions in Nepal (20 commercial banks, 17 development

banks, 19 life insurances, 20 non-life insurance and 1 reinsurance). Stratified random
sample will be drawn from each category of institution. The sample size will be
determined through statistical power analysis, considering precision, confidence level,
and population variability. Within selected institutions, representative sample of
marketing professionals will be surveyed.

Data Collection Procedure

While preparing the data in collected from primary and secondary sources, Secondary
data refers to data that was collected by someone other than the user. It is originally
collected from different sources. So, in the course of preparing this report the necessary
data and documents are collected only from secondary sources.

A. Secondary Data

Secondary data refers to data that was collected by someone other than the user. It
is originally collected data from different sources. So, in the course of preparing
this report, the necessary data and documents are collected only from secondary
sources such as:
• Interview
• Annual Report
• Websites
• Journal
• Books

• Website

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 Data presentation and data analysis tools

To present the marketing banking and finance service, you can use various types of
charts and graphs, such as:

 Tables.
 Bar diagrams.

 Pie Chart

Commented [U3]: Follow the project guideline

1.10 Limitation of the Study

The study of marketing in the banking and financial services has its own set of limitations
and challenges. Here are some common ones:

Regulatory constraints: Financial services are heavily regulated, and marketing efforts
must comply with strict laws and regulations. This can limit creativity and the ability to
execute certain marketing strategies.

Intangible nature of services: unlike tangible products, financial services are intangible,
making it challenging to convey value, build trust and differentiate offerings.

Data privacy concerns: The handling of sensitive customer data requires strict compliance
with data privacy laws. This can limit the amount of data available for marketing analysis
and targeting.

Customer trust and perception: The financial industry has faced trust issues, particularly
after economic downturns or scandals. Overcoming negative perceptions can be difficult.

Complexity of products: Financial products and services can be complex, making it

challenging to communicate their benefits clearly and effectively to customer.

Dynamic market conditions: The financial market is influenced by economic conditions,

interest rates, and global events, which can quickly change the landscape and effect
marketing strategies.

Target market diversity: The financial services market includes a wide range of customers
with varying needs, financial literacy levels, and preferences, making segmentation and
targeting more complex.

Technology and digital transformation: The rapid pace of technological change and
digital transformation requires constant adaptation and innovation in marketing strategies.

Cost and resource constraints: Effective marketing often requires significant investment in
research, technology, and personnel, which may not always be available.

Measurement of ROI: Measuring the return on investment (ROI) for marketing activities
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can be challenging, especially for long-term brand building efforts.

Ethical considerations: Marketing financial products, especially high-risk ones, can raise
ethical issues. Marketers must balance promotional efforts with responsible messaging.

These limitations require marketers in the banking and financial services industry to be
particularly strategic, adaptable, and aware of the regulatory and ethical landscape in which
they operate.

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 CHAPTER-II

RESULT AND ANALYSIS

This chapter deals with presentation and analysis of data, collected from primary data
collection by the researcher as well as from the respondents and interpreted according
to the objectives of the study related to marketing of banking and finance service.

In this section, we will present data related to the marketing of banking and finance
service. The data includes insights into customer demographics, the impact of digital
marketing efforts, customer satisfaction ratings, and financial performance metrics.
This information will provide a comprehensive understanding of how banking and
finance marketing strategies influence its overall performance.

2.1 Market Trends

This section presents data on various aspects of marketing in the banking and financial
services sector. The data includes market trends, customer segmentation, digital
marketing adoption, and campaign effectiveness.
Table 1
Market Trends

Year Global Banking

Annual Growth Digital Banking Customer
Revenue (in billion
Rate (%) Users (in million) Satisfaction (%)
NPR)

2019 3,200 4.5 1,200 78

2020 3,100 -3.1 1,350 80

2021 3,400 9.7 1,500 82

2022 3,600 5.9 1,650 83

2023 3,850 6.9 1,800 85

Source: Global Banking Report, 2023 Commented [U4]: Arrange the data as per columna heading and
Row heading.

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In the above table the year 2019 the revenue is 3200 and rate % is 4.5, 2021 the revenue
is 3400 and annual rate is 9.7. and finally 2023 the revenue is NPR 3850and the annual
rate is 6.9. in every year the revenue is increases and the annual rate is also increase
and decrease. In Year 2020 the revenue and the annual rate is decrease. In the year
2021 the annual rate is high 9.7 therefore the year 2022 and 2023 the annual rate is 5.9
and 6.9.

Customer Segmentation

This section presents data on various aspects of marketing in the banking and financial
services sector. The data includes customer segmentation, digital marketing adoption,
and campaign effectiveness.

Table 2
Customer Segmentation

Customer Percentage ofTotal Preferred Service Average Annual Revenue

Segment Customers (%) Channel per Customer (NPR)
Millennials (25-
35 1,500
40) Mobile Banking

Generation X
2,000
30 Online Banking
(41-56)

Baby Boomers In-Branch 2,500

25
(57-75) Services
In-Branch and
Seniors (76+)
1,000 Phone
10 Banking
Commented [U5]: Arrange the data as per columna heading and
Row heading.

(Source: Customer Segmentation in Banking 2023)

In the Customer segment the millennials, Generation, Baby boomers and seniors and
the percentage customers are decreases like as in millennials the percentage of
customer is 35, in Generation the percentage is 30, baby boomers are 25 and finally the
seniors are 10 percentages. According to service average annual revenue is increasing
and decreasing like in millennials 1500, generation 2000, Baby boomers 2500 and
seniors 1000.
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Table 3: Digital Marketing Adoption

Marketing Channel Usage by Banks Average ROI Customer Engagement

(%) (%) Rate (%)

Social Media 85 12 35
Email Marketing 70 10 25

9 20
Content Marketing 65

Search Engine Marketing

60 (SEM) 15 30

Influencer Marketing 40 8 15

(Source: Digital Marketing in Financial Services 2023)

In the marketing channel the social media the usage by bank is 85, email marketing is
70, in this way the usage by bank is decreasing in every marketing search engine
marketing is 60 and influencer marketing is 40. And average % and ROI customer rate
is also decreasing social media is high in compare of other marketing.

Table 4: Campaign Effectiveness

Campaign Type Average Conversion Customer Retention Cost per Rate (%) Rate (%)
Acquisition (NPR)

New Account
5.5 70 150
Opening

Credit Card
4.0 65 100
Promotion
3.5 60 200
Loan Services

Wealth Management
6.0 Services 75 300

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 (Source: Marketing Campaign Analysis 2023)

Campaign type new account opening the average conversion acquisition is 5.5, credit
card promotion is 4, loan services is 3.5 and wealth management services is 6.0.
therefore, the customer retention cost per rate is decreasing 70%,65% and 60%. And
the rate % is 150 in new account opening, 100 in credit card promotion,200 in loan
services and 300 in wealth management services.

Key Insights

• Growth in Digital Banking: The data shows a consistent increase in the

number of digital banking users, highlighting the importance of digital channels
in marketing strategies.
• Customer Segmentation: Different age groups prefer different banking
service channels, which should be considered when designing targeted
marketing campaigns.
• Digital Marketing Channels: Social media and SEM are the most effective
digital marketing channels in terms of ROI and customer engagement.
• Campaign Effectiveness: Wealth management services campaigns have the
highest conversion and retention rates, though they also have a higher cost per
acquisition.

Conclusion

The data presented in this chapter underscores the critical role of digital marketing in
the banking and financial services sector. By understanding market trends, customer
preferences, and the effectiveness of various marketing channels, banks can tailor their
marketing strategies to achieve better results.

2.2 Result Analysis

The analysis of the data presented in section 2.2 reveals several key insights about the
marketing trends, customer segmentation, digital marketing adoption, and campaign
effectiveness in the banking and financial services sector.

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Market Trends

Global Banking Revenue and Growth Rate:

The global banking revenue experienced fluctuations between 2019 and 2023. In 2020,
there was a notable decline in revenue by 3.1%, likely due to the economic impact of
the COVID-19 pandemic. However, the industry rebounded in 2021 with a significant
growth rate of 9.7%, indicating a recovery phase.

From 2021 to 2023, the growth rate stabilized with moderate increases each year,
reflecting a steady improvement in the sector's overall performance.

Digital Banking Users:

The number of digital banking users consistently increased over the five-year period,
growing from 1,200 million in 2019 to 1,800 million in 2023. This trend highlights the
growing preference for digital banking solutions among consumers and underscores
the importance of digital transformation in the banking sector.

Customer Satisfaction:

Customer satisfaction showed a gradual improvement, rising from 78% in 2019 to

85% in 2023. This positive trend suggests that banks' efforts to enhance customer
experience, through digital channels and improved services, are yielding favorable
results.

Customer Segmentation Millennials

(25-40):

Millennials represent the largest customer segment at 35%. They predominantly prefer
mobile banking, indicating their tech-savvy nature and preference for convenience and
accessibility. With an average annual revenue of NPR1,500 per customer, they are a
crucial target group for banks' digital marketing strategies.

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Generation X (41-56):

This segment accounts for 30% of the total customer base and prefers online banking.
Their higher average annual revenue of NPR2,000 per customer makes them an
attractive demographic for targeted marketing efforts, especially for online banking
products and services.

Baby Boomers (57-75):

Baby Boomers, making up 25% of the customer base, favor in-branch services. With
the highest average annual revenue per customer at NPR2,500, banks should continue
to invest in maintaining and enhancing in-branch experiences to retain and attract this
valuable segment.

Seniors (76+)

Seniors constitute 10% of the customer base and prefer a mix of in-branch and phone
banking services. Although their average annual revenue per customer is lower at
NPR1,000, providing personalized and accessible services can help in retaining this
segment.

Digital Marketing Adoption Social

Social Media:
Social media is the most widely used digital marketing channel by banks (85%) and
delivers an average ROI of 12%. With a customer engagement rate of 35%, it is an
effective platform for reaching a broad audience and promoting banking services.

Email Marketing:

Used by 70% of banks, email marketing has an average ROI of 10% and a customer
engagement rate of 25%. It remains a valuable tool for personalized communication
and customer retention.

Content Marketing:

Content marketing is adopted by 65% of banks, with an average ROI of 9% and an

engagement rate of 20%. It is effective for educating customers and building brand
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authority.
Search Engine Marketing (SEM):

SEM is used by 60% of banks, achieving the highest average ROI of 15% and a
customer engagement rate of 30%. It is particularly effective for attracting new
customers through targeted advertisements.

Influencer Marketing:

Influencer marketing is the least used channel (40%) with an average ROI of 8% and
an engagement rate of 15%. While less commonly adopted, it can be useful for reaching
niche markets and building brand credibility.

Campaign Effectiveness

New Account opening

Campaigns focused on new account openings have a conversion rate of 5.5%, a

customer retention rate of 70%, and a cost per acquisition of NPR150. These campaigns
are effective for customer acquisition but require competitive offers to attract new
customers.

Credit Card Promotion:

Credit card promotion campaigns have a conversion rate of 4.0%, a retention rate of
65%, and a cost per acquisition of NPR100. These campaigns are effective in attracting
customers who seek credit products.

Loan Services:

Loan services campaigns have a conversion rate of 3.5%, a retention rate of 60%, and
a cost per acquisition of NPR200. These campaigns are crucial for promoting loan
products, though they have a higher acquisition cost.

Wealth Management Services:

Wealth management services campaigns have the highest conversion rate of 6.0%, a
retention rate of 75%, and a cost per acquisition of NPR300. These campaigns are

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 effective in attracting high-value customers interested in investment and wealth
management services.

The analysis of the data highlights the significant role of digital transformation in the
banking and financial services sector. Understanding customer preferences, leveraging
effective digital marketing channels, and optimizing campaign strategies are essential
for banks to stay competitive and achieve sustained growth.

2.3 Major Findings

The major findings are as follows:

1. Digital Transformation is Critical

• Increasing Digital Banking Users: There has been a consistent rise in the
number of digital banking users, from 1,200 million in 2019 to 1,800 million in
2023. This growth underscores the importance of digital channels in the
banking sector.
• Improved Customer Satisfaction: Customer satisfaction has gradually
improved, increasing from 78% in 2019 to 85% in 2023. This indicates that
banks' efforts in enhancing digital experiences are positively impacting
customer satisfaction.

2. Market Trends Show Recovery and Growth

Revenue Fluctuations and Recovery: Global banking revenue saw a dip in 2020
due to the economic impact of the COVID-19 pandemic but rebounded strongly
in 2021 with a 9.7% growth rate. The steady growth rates in subsequent years
reflect a recovery and stabilization of the industry.

3. Customer Segmentation Insights

• Millennials (25-40): This segment is the largest at 35% and prefers mobile
banking. Their average annual revenue per customer is NPR1,500. Banks
should focus on mobile-first strategies to engage this tech-savvy group.
• Generation X (41-56): Comprising 30% of the customer base, they prefer
online banking and have a higher average annual revenue of NPR2,000. Online

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 banking products and personalized online services can effectively target this
segment.
• Baby Boomers (57-75): Representing 25% of customers, they favor in-branch
services and generate the highest average annual revenue of NPR2,500 per
customer. Maintaining high-quality in-branch services is crucial for retaining
this valuable segment.

• Seniors (76+): This group makes up 10% of the customer base and prefers a
mix of in-branch and phone banking services. Personalized and accessible
services are important for retaining this segment.

4. Effective Digital Marketing Channels

• Social Media: Widely used by 85% of banks, it has an average ROI of 12%
and a customer engagement rate of 35%, making it the most effective channel
for broad audience reach and engagement.
• Search Engine Marketing (SEM): Used by 60% of banks, SEM achieves the
highest average ROI of 15% and a customer engagement rate of 30%. It is
particularly effective for attracting new customers through targeted ads.
• Email Marketing and Content Marketing: Email marketing is used by 70%
of banks with an average ROI of 10% and a 25% engagement rate. Content
marketing, used by 65%, has an average ROI of 9% and a 20% engagement
rate. Both are valuable for personalized communication and building brand
authority.

5. Campaign Effectiveness Varies

• New Account Opening: Campaigns have a conversion rate of 5.5%, a retention

rate of 70%, and a cost per acquisition of NPR150. These campaigns are
effective for acquiring new customers but need competitive offers.
• Credit Card Promotion: With a conversion rate of 4.0% and a cost per
acquisition of NPR100, these campaigns are effective in attracting customers
seeking credit products.
• Loan Services: Campaigns have a conversion rate of 3.5%, a retention rate of
60%, and a higher acquisition cost of NPR200, indicating the need for targeted
offers to attract loan customers. Commented [U6]: your findings does not meet with your
Objective.

23
s

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• Wealth Management Services: These campaigns have the highest conversion
rate of 6.0% and a retention rate of 75%, though with a higher cost per
acquisition of NPR300. They are effective in attracting high-value customers
interested in investment services.

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 CHAPTER-III

SUMMARY AND CONCLUSION

3.1 Summary

The data analysis on the marketing of banking and financial services reveals several
key insights. Digital transformation is pivotal, with digital banking users increasing
from 1,200 million in 2019 to 1,800 million in 2023, and customer satisfaction
improving from 78% to 85% in the same period. The global banking sector experienced
revenue fluctuations, notably a 3.1% decline in 2020 due to COVID-19, followed by a
strong recovery in 2021 and steady growth thereafter. Customer segmentation
highlights that Millennials prefer mobile banking, Generation X prefers online
banking, Baby Boomers favor in-branch services, and Seniors prefer a mix of in-branch
and phone banking. Effective digital marketing channels include social media, SEM,
email marketing, and content marketing, with social media achieving the highest
customer engagement. Campaign effectiveness varies, with wealth management
services showing the highest conversion rates and retention, despite higher acquisition
costs. Overall, understanding digital trends, customer preferences, and optimizing
marketing strategies are crucial for banks to remain competitive and achieve growth.

3.2 Conclusion

The comprehensive analysis of marketing in the banking and financial services sector
underscores the critical importance of digital transformation, customer segmentation,
and strategic use of digital marketing channels. The significant increase in digital
banking users and improved customer satisfaction highlight the successful adoption of
digital services. The sector's resilience is evident in its recovery from the revenue
decline during the COVID-19 pandemic, followed by robust growth. Detailed customer
segmentation reveals distinct preferences across demographics, from millennials
favoring mobile banking to baby boomers preferring in-branch services. Effective
digital marketing channels, including social media, SEM, email, and content
marketing, demonstrate varying levels of ROI and engagement, emphasizing the need

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for a multifaceted approach. Campaign effectiveness varies by service type, with
wealth management services showing the highest conversion rates despite higher
acquisition costs. Overall, banks must continue to innovate digitally, understand
diverse customer needs, and optimize marketing strategies to remain competitive and
achieve sustained growth in a rapidly evolving market.

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3.3 References

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Lopez, R. (2020). Studied customer perceptions of chatbots in online banking services.
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