The Role of Marketing in Banking Industry

It is said that the banking sector mirrors the larger economy – its linkages to all sectors make it a proxy for what is happening in the economy as a whole. Indeed, the Bangladesh banking sector today has the same sense of excitement and opportunity that is evident in the Bangladesh economy. The fundamental structural changes in the recent years have taught us many lessons. A combination of developments arising from technological advancements and a liberalised marketplace – disintermediation, blurring of traditional roles and boundaries, emphasis on shareholder value-creation – has led to a transformation of the banking sector. The banking industry in Bangladesh has become more and more developed and is functioning progressively. Customers have more opportunities for selection of more suitable places to buy and use banking services and satisfy all their demands. But at the same time, they have also become more fastidious and expect higher standards from banks, such as more friendliness in service styles, more effectiveness in solving all their complaints, or more modernisation when it comes to equipment and tools. Here the terms ‘Marketing’ and ‘Banking’ blend together inextricably.

Marketing has lately entered the banking industry not in the form of marketing concept, but in the forms of advertising and promotion concept. It has been realised that marketing transcends advertising and friendliness. Earlier, it was recognised that personal selling was not necessary. The bankers even eliminated the word ‘selling’ and they called the function of customer-contact ‘business development function’. But gradually they have begun to realise that marketing is a lot more than smiling and friendly tellers.

As far as the evolution of bank-marketing is concerned, the bankers have now come out of the ivory towers and reached out to the masses. A large number of deposit and loan schemes are now being developed according to the requirements of different sections of society as per the national priorities in Bangladesh.

A personalised service-oriented industry: Banking is a personalised service-oriented industry. The marketing approach involves anticipating, identifying, reciprocating (through designing and delivering customer-oriented service), and satisfying the customer’s needs and wants effectively, efficiently, and profitably. To bring satisfaction to customers, banks have had to improve their service quality to keep their old customers and attract more new and potential ones.

Service quality can be defined as the difference between customers’ expectations of service performance prior to the service encounter and their perceptions of the service received (Asubonteng et al., 1996). Quality service for banks has a positive effect on the bottom-line performance of a bank and, thereby, on the competitive advantages that could be gained from an improvement in the quality of the service offered, so that the perceived service exceeds the service level desired by customers. Nowadays, with increased competition, service quality has become a popular area of academic investigation and has been recognised as a key factor in keeping the competitive advantage and sustaining satisfying relationship with customers.

A customer’s long-term relationship can be empirically represented by following a sequence that includes trust, which influences relational commitment, which in turn influences customer loyalty. Trust depends on confidence in another partner. The importance of trust in banks lies in its contribution to the strengthening of interpersonal relationship. For instance, regarding service failure in banks, trusting the banker may allow the costumer to believe that poor product quality was a simple error that will not be repeated or which will be addressed.

Commitment is defined as an enduring desire to maintain a valued relationship [Moorman, Deshpande, and Zaltman, 1993]. Commitment to the bankers suggests that the customer has an investment in the relationship.

Customer loyalty is a behavioural and attitudinal predisposition to stay with the seller in the long-term [Oliver, 1999].

All three ensure a successful customer service and banks will keep their strong customer-centric orientation image to the customers, which will help banks in further development. Customer satisfaction represents a modern approach for quality in enterprises and organisations and serves the development of a truly customer-focused management and culture.

Service delivery: Service is all about expectations. When it comes to products, people expect a good quality product based on the price they are willing to pay for it. When it comes to service, expectations can get a little fuzzy. When a customer begins a relationship with you, he or she already has a specific set of expectations. These expectations are based on their perceptions of you, your company and your industry. They are formed through past personal experience, and the experience of others with whom the customer interacts.

In case of the banking industry, customer retention plays the critical role in customer service. Customer retention is potentially an effective tool that banks can use to gain a strategic advantage and survive in today’s ever-increasing banking competitive environment. The key factors influencing customers’ satisfaction and ensuring customer retention of a bank include the range of services, rates, fees and prices charged. It is apparent that superior service alone is not sufficient to satisfy customers. Prices are essential, if not more important than service and relationship quality.

There are compelling arguments for bank management to carefully consider the factors that might increase customer retention rates in Bangladesh. Unless a bank can extend its product quality beyond the core service with additional and potential service features and value, it is unlikely to gain a sustainable competitive advantage. Thus, the most likely way to both retain customers and improve profitability is by adding value via a strategy of differentiation while increasing margins through higher prices. Today’s customers do not just buy core quality products or services; they also buy a variety of added value or benefits. This forces the service providers such as banks to adopt a market-orientation approach that identifies consumer needs, and designs new products and redesigns current ones.

Quality of personnel: In businesses where the underlying products have become commodity-like, quality of service depends heavily on the quality of their personnel. This is well documented in a study by Leeds (1992), who documented that approximately 40 per cent of customers switched banks because of what they considered to be poor service. Indeed, customer satisfaction has for many years been perceived as a key to determine why customers leave or stay with an organisation. Organisations, especially banks, need to know how to keep their customers, even if they appear to be satisfied.

Launching new schemes with advertisements attracts new depositors. However, what ultimately sustains the process of generation of new deposits and continues the acceleration of deposit mobilisation is the quality of customer service as perceived by clients. Banks’ performance in different banking services like withdrawal of cash, collection of cheques, quality and adequacy of infrastructural facilities available to customers, attitudes of bank employees towards customers, promptness, and general attitude have to be analysed and evaluated before strategy formulation.

Services under one roof: Innovation and renovation are the keys to success in service marketing including banks. The provision of all the financial services under one roof is the concept of modern banking. The banks are now not just the clearing houses, but are the best marketable places too. Foreign banks have realised this fact long ago and they have been providing the best services as per the requirement of their customers. In line with them, state-owned and local private banks are advancing ahead in Bangladesh. The competitive scenario has made banks to provide customised products and services. Customers have many options today.

In today’s banking, the role of information desk has become very important. Customers may require some assistance in various transactions, in which the help desk should be able to provide services promptly with dignity and honour.

Human resources: In the context of Bangladesh, banks have to understand the changing needs of customers, their aspirations and expectations to create value. Banks should also have a strong customer-tied management system. To manage growth and continuity in business, human resources play an important role. The new-generation private sector banks and foreign banks enjoy a lead in this regard when compared to state-owned and old generation private sector banks in Bangladesh. Banks may follow a feedback system to know the customers’ expectations for improving the level of customer satisfaction to the maximum level.

There is a need for professionalism and market-oriented banking in our country. Market-oriented banking will require a new culture: a disciplined, professional, and committed manpower; employees trained for specialised services; specialised branches; strong marketing organisation in different banks; aggressive selling; meeting new customers’ expectations; and cost-effective and efficient services for gaining customer satisfaction and loyalty. Banks should remember that, it is so tough to make a customer enter a bank, but it is a fraction of second for a customer to move from one bank to another. Competition is increasing at a regular basis and customers are enjoying it. The more the competition, the better the services banks need to provide for business retention.

E-learning and the benchmark Bangladesh has created

“Pola ta re diya gelam apner kachhe. Haddi amar ar chamra apner.” [My child from now on will be under your supervision. Bones are mine and the rest is yours.] Once upon a time in Bangladesh, our parents used to shoulder responsibilities of his/her sons/daughters to the teachers in these particular approaches. Recently approaches may have changed either in line with the changes in education systems or changes of approaches in other developed or developing countries but the scenario has not changed enough. Students are advancing and to step in line with them, parents are following the advanced path and initiating modern strategies with the help of technologies. Recent blessings are internet and its advancement in education sector. May be I’m wrong but still our parents are afraid of internet and the use of modern inventions.

But one thing must not be forgotten that each and every action has an opposite and equal reaction and the verdict goes with modern technologies as well such as internet. I must confess that the age i.e. 12-18 is not an ideal age for a boy/girl to enter into the world where one can ruin his/her life forever and diminish the dream of parents but one thing I have to say which I have learnt from different finance course instructors during my undergraduation tenure is “No risk, no gain.” And if parents could realise it, then I believe that the days are not so far when our upcoming generation will not be afraid of taking part in any competition where the champions of other developed countries will be participating.

In a longitudinal study spanning 4 years at Deakin University Palmer and Bray (2001) found that “Student computer usage was rising… Student access to the Internet was rising …Student usage of the Internet was rising … The proportion of students with access to the Internet at home was rising … Student usage of email was rising.” Then why we, the proud mass crowd of Bangladesh, will step behind. The government has already initiated e-learning as their target is to digitalise the country within 2021 but the real scenario is completely unexpected. And the government itself will be afraid of knowing that how alarmingly our parents or instructors are welcoming e-learning. I’ve worked in the field with a view to initiating e-learning in several schools in Dhaka City and elsewhere and it is a matter of surprise that parents are keen to purchase a burger or pastry to his/her child which costs Tk 100 but they are not showing their interest to purchase a software which will help their child to step ahead with the help of e-learning.

The phenomenon of globalisation has transformed world trade, communications and economic structure in the 21st century and consequently, the complexion of higher education sector too has undergone a sea change in the last two decades. Although higher education, science and technology have always been international endeavours, of late, they have acquired new dimensions and features. Internationally, a majority of the institutions offering higher education is making strenuous efforts to revise its academic orientations and the course delivery strategies in the light of the interplay of these global changes and emerging challenges.

E-learning, one of the tools emerged from information technology, has been integrated in many educational programmes. The rapidity with which children and young people are gaining access to online, convergent, mobile and networked media is unprecedented in the history of technological innovation. Recently, information technology has been viewed as a solution to educational institutions’ cost and quality problems. Information technology in teaching and learning has created a need to transform how students learn by using more modern, efficient, and effective alternative such as e-learning. E-learning has started to make way into developing countries and is believed to have huge potential for the government of Bangladesh struggling to meet a growing demand for education while facing an escalating shortage of teachers. It is seen as a tool for raising the number of students who have access to higher education, especially marginalised groups in rural areas, by being a cheaper and more flexible alternative. Challenges are however plentiful; in many developing countries like Bangladesh, there is a lack of vital e-learning components such as computers, electricity and skills and the active, participative student that is required for interactive learning is also very rare in countries where the tradition is to teach in a more didactic manner.

E-learning can be viewed as the delivery of course content via electronic media, such as Internet, Intranets, Extranets, satellite broadcast, audio/video tape, interactive TV, and CD-ROM. It is one of the new learning trends that challenge the traditional “bucket theory” or the banking concept of education. The banking concept of education assumes that the instructor owns the knowledge and deposits it into the passive students who attend the class. And by this way the whole process goes on.

In this context, online learning or e-learning mode has emerged as a major higher education option before the global student community in general. Higher education institutions operating in countries like the US, UK, Australia, New Zealand, European Union (EU) and various other developed countries are making efforts to re-adjust in the light of the contemporary challenges and Bangladesh is no exception to this inevitable transformation. While advanced countries responded to these pressures of globalisation rather more successfully with their vast resources, Bangladesh is still in the process of designing strategies to re-adjust to the dynamic phase of global reforms in the higher education sector.

E-learning itself is a term that is complex, and that attracts a degree of controversy and disagreement. In developed countries, sophisticated computers and telecommunications are on the verge of reshaping the mission, objectives, content, and processes of schooling. In line with that, e-learning has emerged as one of the fastest moving trends in education today. Now ICT education incorporates the use of the computer, its peripherals and internet services within the student learning process and the teacher delivery process. Computer usage in schools has made many positive impacts and developments into learning. However the acceptance of ICT by schools, as with the current emergence of online learning has been slow. However, in reference to Computer Based Learning (CBL), it can be said that monitoring teacher and student attitudes is significant for structural usage, acceptance and success.

I have discussed a lot regarding e-learning. But now it is high time to realise what e-learning practices are? Activities that are distinctly different from real world learning practices for example special interest e-groups; subscription and access to e-journals; access to databases of information on research; digital archiving and access to those archives; access to institutional repositories; email exchanges with supervisors and fellow students; bulletin board access; online browsing and searching formal access to resources, reading lists etc. and completion of assignments using a virtual learning environment; and anytime/anywhere access to information and exchange. Learning is never an entirely passive activity in the real world or via e-learning.

Even the most instrumental of learning activities requires some accommodation of existing learning patterns and configurations to new learning. In e-learning, because the learner is often isolated physically from other learners in the network, he or she has to make an extra effort to contribute to the e-learning community. Learning is never a simple ‘read-off’ from the tissue of connections made by others; it requires some engagement and contribution. Even though some e-learners may contribute little, and simply feed off the contributions of others; but it still takes some awareness and engagement to benefit, even from such a seemingly parasitical position. Now it’s time to explore social informatics. Essentially, social informatics is an interdisciplinary body of theory that includes consideration of the design, uses and affordances of information and communication technologies, particularly in social, institutional and cultural contexts.

It is interested in the ways in which new information and communication technologies change the patterns and potentialities of social interaction. Borrowing from sociology, social interaction is conceived in terms of strong and weak ties and their initiation, maintenance and development. Information and communication technologies, and the online and offline communities that are made possible as a result, are seen to enable the maintenance of weaker ties and the possible strengthening of strong ties, partly through the increase in communication that takes place. This increase to a new dimension of social interaction makes for more than just a re-purposed version of offline learning. It creates a larger, more complex space for interaction, with multiple modes of communication, greater distances of potential interaction, and compressed/enhanced synchronous and asynchronous means of communication.

I must have to admit that e-learning is distinctively different from conventional face-to-face learning, or solitary learning by an individual in a library or a monastic cell. The digitisation of text makes for easier and more rapid transduction; the availability of an extended community of learners, with the teacher taking his/her place alongside learners, extends the possibilities of learning. When applied to e-learning, the freedom of the individual is clear. Within the confines of the course or programme and its requirements, the individual learner has the freedom to define his or her network of learning. Because the learner moves in and out of the electronic environment of learning, even in so called ‘100% online’ learning programmes, he or she builds a web of discourses and patterns for learning that becomes distinctive. E-learning, then, transforms the nature of learning for the contemporary learner; it does more than ‘enhance’ an existing state of affairs, and much more than provide a re-situated version of conventional learning. It creates a web of networked communities that in themselves are generative of learning, but in combination and association, provide a richer, more extensive opportunity for learning.

Engagement in e-learning makes for a different kind of learning. In conventional learning and scholarship, there is an authoritative, hierarchical power system at work. The teacher acts as mediator for the student between the body of knowledge, as enshrined in books, journals and other forms of print. Knowledge is seen to exist, to be added to by research, and to be guarded by editors of journals who, among others, protect and preserve the discourses of induction into that community. In e-learning, however, the canonical texts are themselves committed to digital format and thus become at once more malleable, and more open to critique that has the same status as the original text.

A digital electronic text can more easily be broken up, annotated, re-aligned, and incorporated as part of a dialectic or at least dialogical exchange. The digital spectrum of access and use is evident not only internationally, but also within societies. Access is distinguished from use in that it is one thing to have access to a networked computer, and another to use that privilege to good and full effect. But we know that many people in society, more specifically in Bangladesh, do not have access to a computer, and if they do, may not have access to fast broadband connectivity. There is thus a spectrum of access which means that some learners will be relatively disadvantaged. Such disadvantage may not affect the quality of learning, but it will most certainly affect the type of learning and the range of resources those are available.

Access is an issue of systemic economic inequality. Use is more a matter of individual engagement with the possibilities and affordances of new software and connectivity, and tends to manifest itself generationally rather than socio-economically. Successful preparation for online learning is not significantly different from classroom preparation. As with any new concept, however, it is important for an instructor to communicate how existing practices integrate with a new concept. High dropout rates are not a function of the online learning environment – they are a function of poor course design, lack of instructor familiarity of the environment, and learner preparation. Preparing learners to learn online is perhaps the greatest skill that e-learning can offer. In an era of lifelong learning, skills for acquiring knowledge play a greater role in success than do knowledge concepts.

For a country like Bangladesh where the government and even several social bodies are concerned with implementing e-learning, for them I think that in the preliminary stage, it is important to understand all challenges. Because e-learning most often is being transferred from the developed world we need to know not only what challenges that are already found and to some extent met in the developed countries, there is also a need to understand which additional challenges, if any, there may be in developing countries.

The most frequently mentioned challenges concern issues relating to the course given. Concerns are raised about the content of the course, the activities undertaken during the course, the support functions provided, and the delivery mode of the course. The first issue identified here is the curriculum which stipulates much of the course actions and content. There are discussions on the need to develop new curriculum specifically designed for an e-learning setting; thereby showing awareness that e-learning is different from traditional class-room based teaching. The choice of pedagogical model is also found to have effects on learning. There are discussions on which pedagogical methods are appropriate for e-learning and many discussions concern a shift from a more instructor-centred approach to a learner-oriented approach where the students take ownership of their learning.

Besides, the characteristics of the individual student, and in some cases the teacher, are much researched in developed countries, less so in developing ones. Student motivation is a factor and it must be signified deeply. Highly motivated students perform well in most cases whereas non-motivated students tend to drop out. The relation between motivation and other e-learning factors is rarely elaborated; the reasons for success or failure in the studies are simply referred to as personal motivation or lack of motivation. Technological challenges cannot be over looked. The use of ICT for distance education evidently makes access to the technology an enabling or disabling factor and in developing countries like Bangladesh, the issue of access is often discussed in terms of availability of so called tele-centres and internet cafes. Finally there is the issue of localisation; to what extent the technology and software should be adapted in order to fit local culture and languages. Localisation in this case is about embedding cultural and religious values and aesthetics into the design of the technology and software.

Let me point out some good things about e-learning at a glance:

* E-learning may result in cost savings.

* E-courses can be monitored more easily than the traditional classrooms.

* On-line learners can make use of the electronic mail to establish communication with faculty members.

* The advantages of student-centred teaching approach which provides round the clock accessibility to course materials and providing just-in-time methods to assess and evaluate students’ progress.

* Majority of the e-learners have stated that they never resort to any kind of malpractice and further reiterate that they always comply with the course requirements. This undoubtedly ensures the much-needed quality of the e-learning and also the commitment of the e-learners paving way for successful functioning of the concept of e-learning.

* Designing for learning explores the design of learning activities and programmers to make effective use of e-learning systems. Understanding my learning explores learner participation in and experience of e-learning, taking into account activities such as planning and reflection that cut across individual programmes, as well as participation in learning tasks and assessments.

* Learning is seen as internalising the representational and communicative means of the subject of discourse.

Development of educational systems and methods are driven by practical, political and technological agenda. These pressures cannot be ignored but need to be balanced by appropriate consideration of knowledge of methods and theories that enable education to meet its needs. A classification into researching effectiveness, representation, and knowledge sharing offers a way to progress many of the problems identified in the fields of organisation, technology and pedagogy in education. It helps the development of a roadmap by facilitating both the identification of dependencies in the communication of concepts within the roadmap by use of these simple vocabularies – effectiveness, representation, and knowledge sharing, to enable simple overviews to be generated.

I have attempted to argue that e-learning changes the nature of learning in a number of significant ways. If we accept the premise that learning is socially situated, and those e-communities are different from conventional learning communities in classrooms in schools and elsewhere, then it follows that e-learning is different from conventional learning. Crucially, e-learning extends the horizons of learning in space, resource and time. The notion of transactional distance is important to understanding how e-learning is different from conventional face-to-face learning. Such extension requires more from the learner in that he/she has to make selections from the possible available resources, as well as decide how and when to engage in the e-learning community.

The nature of knowledge itself is affected by digital technology, particularly in the levelling out of the relationship between existing knowledge, the teacher and the student. Rather than a hierarchical conception of knowledge, e-learning and its technologies promote a flatter, more democratic, more potentially dialogical relationship between the learner and knowledge. Furthermore, knowledge is seen to be in a state of perpetual development. Last but not the least, any new theory of e-learning needs to bear in mind that just as learning was always subject to a spectrum of access and use, according to socio-economic, geographic, cognitive and motivational factors, so too e-learning is actually stretching the spectrum of access and thus use still further.