fee based services

8/3/2019 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



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



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




C hange in attitude

Re - skilling

Product knowledge and awareness

Persistence




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




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




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



Fee based servicesCo rp o rate Fee based services

C ash management services ± integratedpayment/receivables solutions

Documentary credits and Guarantees

Bill discounting

Factoring




Forfaiting of export receivables

Foreign Exchange services

Merchant Banking

Registrar, underwriting and custodial services




Leasing

C redit rating

Asset management

C orporate credit cards




Mergers, Acquisitions and recapitalisation advisory

S upplier strategies ± control of travel andentertainment expenses

Recommendations on savings process and riskmanagement

Better visibility, improved compliance




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



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




Bills pay - utility bills payment

S afe deposit lockers

File tax returns online

Health Insurance at discounted rates ± group medclaim floater policies




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



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




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




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



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




Buyers¶ credit ± financing through overseasbranches/correspondent banks

Executing international payments/advanceremittances

S uppliers¶ credit ± credit sales effected by the supplier




S hipping guarantees and delivery order

Management of currency exposures throughderivatives

Trade account information ± credit report on thesupplier



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



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



Fee based servicesDirect GuaranteesIndirect guarantees

Advance payment GuaranteePerformance bondPayment guaranteeTender / bid bondGuarantee for missing bill of ladingS tand- by letter of credit



Fee based servicesC redit C ards

S ilver / Gold / Platinum cards

Fuel / airlines cards

Women¶s card

Forex / prepaid card



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



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



Fee based servicesW ealth management

Wealth accumulation ± transformation from savers toinvestors

Wealth preservation ± protection of wealth

Wealth transfer ± transfer to legal heirs at minimumcost



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



Fee based services

W ealth managementGoldReal EstateBank DepositsEquity and mutual fundsDebt instruments

Arts & C raftsDerivatives



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



Fee based services

W ealth managementPractice independent thinking

Practice inactivity, not hyperactivity

S tay within your circle of competence

Ignore stock market forecasts

fee based services

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