A report to be published by VRL in
August, Industry Dynamics, Market Trends and Opportunities,
Marketing Spend and Sales Strategies in Retail Banking, will
show that 45% of respondents are more optimistic about revenue
growth over the next 12 months than the previous 12-month period.
Douglas Blakey reports
Go deeper with GlobalData
An extensive survey of senior banking industry
executives surveyed by VRL and Timetric in the first half of 2012,
finds that almost one-half of those questioned are upbeat about
revenue growth prospects in the next 12 months.
Among the mid-sized banks, 41% expect a growth
in revenues, while 23% are less optimistic.
Regional variations abound with banks based in
the US, Asia Pacific, the Middle East and Africa more optimistic
about revenue growth than their European counterparts.
This is indicated by the fact that 77% of
banking industry respondents from the Middle East and Africa, and
60% from America, are ‘more optimistic’ about revenue growth, while
only 29% of respondents in Europe anticipate growth.
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By GlobalDataIn Europe, 39% of respondent expect no change
while 30% are less optimistic.
Optimism in the emerging markets is largely
driven by the growth of the industry in nations such as
China, India, Brazil, Russia and Indonesia.
In these locations the banking industry has
proved to be relatively resilient to the global financial crisis as
they are comparatively closed economies and have stringent
regulatory frameworks.
China was identified as the leading-emerging
market by 47% of respondents. China’s rapid economic development
has made it an attractive destination, not only for banking but
many other industries.
The nation has emerged as the second-largest
economy in global terms, meaning banks and other financial
institutions are anxious to establish operations in this location.
Solid economic fundamentals and stringent regulations have helped
the Chinese banking sector to record positive growth and reduce its
exposure to external market conditions.
Growth in these emerging economies is driven
by the increasing volumes of middle class consumers, large
population rates, strong economic growth and domestic
consumption.
In addition, these nations provide positive
growth potential in terms of infrastructure which will act as a
growth driver to the banking industry, particularly in terms of
commercial banking.
The report, Industry Dynamics, Market Trends
and Opportunities, Marketing Spend and Sales Strategies in Retail
Banking provides data and extensive analysis on global banking
industry companies’ media spend, marketing and sales strategies,
practices and business planning within the industry.
In particular, the report analyses:
- How global banking industry companies’ media spend, marketing
and sales strategies and practices and business planning are set to
change in 2012–2013; - Data and analysis about the current size of the marketing and
advertising budgets of global banking industry companies and how
spending by banks and other financial institutions will change,
providing an insight into marketing behaviour; - Future growth plans of banks and other financial institutions,
and M&A activity in the global banking industry, and - The opinions and strategies of business decision makers and
competitors and also examine their actions surrounding business
priorities.
The main business priorities identified by
respondents from banks for 2012 are to ‘improve operational
efficiency’, ‘capital and risk management’ and ‘introduce new
products and services’.
Executives anticipate increased levels of
consolidation over the next 12 months. The main reasons for this
are: changing capital requirement regulations, pressure on the
bottom-line of companies forcing them to look for inorganic methods
of growth, a growing focus on divestitures and a desire to increase
their global market presence.
According to 58% of respondents, ‘banking for
SMEs’ is expected to record a high level of demand over the next 12
months, while 50% suggest that ‘wealth management’ will be an
important product during this period.
Among the respondents from other financial
institutions, 50% expect ‘wealth management’ to be a high-demand
product while 46% expect demand to increase for ‘debit and credit
cards.
Marketing budgets set for modest
increase in 2012
The average size of the annual marketing
budget of global banking industry respondents’ companies is $70.5m
for 2012.
Timetric and VRL’s industry survey revealed
that the average marketing budgets, of both banks and other
financial institutions, are expected to rise by a mere 1.7% over
the next 12 months. Bank’s marketing budgets are expected to
increase by 2.2% in 2012–2013, while the marketing budgets of other
financial institutions are expected to increase by a mere 0.4%.
In general, marketing expenditure is expected
to remain constant over the next 12 months. Cost controls, a
restructuring of existing marketing spend, the presence of large
budgets coupled with market uncertainty, are considered the key
reasons for such expectations.
Banking firms are restructuring their budgets
to increase expenditure on online marketing campaigns, while
rationalizing expenditure on traditional platforms.
A significant proportion of respondents from
both banks and other financial institutions expect to increase
their marketing expenditure on ‘social media’, ‘online portals’,
‘mobile’, ‘corporate and brand websites’ and ‘email and
newsletters’.
These respondents plan to shift their
marketing expenditure from traditional marketing channels to more
modern online marketing channels due to the cost effective nature
of modern media.
Customer retention, customer acquisition and
cross-selling and up-selling are considered to be the main
marketing objectives for 2012.
Of all respondents from banks, 67% consider
‘customer retention’ to be a ‘very important’ marketing objective,
while 55% each consider ‘customer acquisition’ and ‘cross-selling
and up-selling’ to be ‘very important’ marketing objectives.
A total of 28% of bank respondents and 30% of
other financial institution respondents expect an increase of up to
5% in their workforce in the next 12 months.
By contrast, 24% of respondents from banks and
18% from other financial institutions expect a steady decrease in
staff recruitment over the next 12 months.
Again, there are notable regional variations
with 58% respondents from the Middle East and Africa expecting a
‘steady increase’ in the workforce level, while 35% and 39%
respondents from America and Asia Pacific respectively expect the
workforce to increase up to 5%.
The European sovereign debt crisis has had an
impact on workforce levels.
In total, 41% of respondents from Europe
expect a decrease, with 33% expecting a ‘steady decrease’ and 8%
expecting a ‘large decrease’ in employment levels.
The full report containing over 130 pages
and 63 tables of proprietary data will be published in August
2012
