Banking, Finance and Investment

• Unit 1 covers marketing management in the finance and investment environment.
• The Banking, Finance, and Investment Marketing Management Course consists of four components:
  • Banking Industry
  • Insurance Industry (Financial Security and Protection Industry)
  • Real Estate
  • Emerging Investment Consolidation

Examples of Financial Institutions

• BDO
• Unionbank
• Security Bank
• Bank of the Philippine Islands
• Metrobank
• Citibank
• Landbank
• Philippine National Bank
• United Coconut Planters Bank
• Development Bank of the Philippines

Nature of Most Financial Institutions

• Geography is not a limiting factor for banks
• Banks are the most common establishments due to the need for physical presence
• Banks and financial institutions possess limitless expansion opportunities due to unique commodities
• Banks used to be navigation landmarks
• Banks reflect the street they are situated on and serve as landmarks
• Negative aspect: It is difficult to stand out in a competitive environment.

Impact

• Banking and other finance-related institutions heavily support promotions and advertising
• Banking and investments are tradable under unique circumstances

Dependence

• EVM for payroll accounts
• 97% (11M people in Metro Manila) get salaries via banking services
• Banks act as intermediaries
• In 2022, all government service fees and registrations used bank infrastructure
• Full cashless payment migration might be 100% by 2024

Delayed Gratification

• Investment is buying monetary asset for income or sale at higher price
• Investments must provide future income or higher sale price to qualify

What Are Your Assets?

• Written proof of ownership is needed
• Assets need to be registered under a National Level Authority to act as protective measures
• The Insurance Commission is the government agency in the Philippines that supervises insurance-related assets
• Insurance Commission and Banko Sentral ng Pilipinas are supervisors

Extended Relationships

• Customer Lifetime Value (CLV) is the net profit contribution over time
• CLV is utilized in finance to engage with customers through their lifetime
• Businesses aim to grow with clients through their lives, not just target profitable stages

Cooperative Pooling

• Individuals pool limited money to form a cumulative fund
• The cumulative fund is the result of cooperative pooling
• If a cooperating member has an accident, resources are used
• Marketing professionals ensure the cooperative pool retains an ideal membership number
• Excessive material is needed
• Goal is to extend relationships.

Brand Asset Valuator Tool (from IMC)

• Relevance: Connection
• Differentiation: Standout
• Esteem: Feelings
• Knowledge: Information
• Outright Desire: Not applicable to banks

Positioning Statement/Tagline

• Brand Personality includes Sincerity, Excitement, Competence, Sophistication, and Ruggedness

Finance Positioning/Tagline Rules

• Empathic (BDO/BPI)
• Project Consumer Confidence (METROBANK)
• Builds Rapport (UCPB;its personal)
• It is important to establish a familiar, comfortable relationship

Finance Positioning Statement Principles

• Should practice ease of pronunciation
• Everything is in one breath
• Symmetry needed

Basics of Value

• It is complex in the finance sector
• Tangilbe assets give specific benefits and features
• For Finance, Value is actual monetary equivalence

Appreciation and Depreciation

• Appreciation: Increase in value over time
• Depreciation: Decrease in value over time

Buyer's and Seller's Markets

• Buyer's Market: Supply exceeds demand
• Seller's Market: Demand exceeds supply

Types of Value

• Acquisition: Price initially purchased (equivalent to SRP)
• Market: Price in the marketplace now (equivalent to the Market)
• Intrinsic: Non-economic factors like sentimental value

Banks

• Perfect place to start four-sector survey
• Can be a dangerous industry
• Can face imprisonment for failing to follow regulations
• Much of currency happens in benches in bankd

Core Business of Banking

• Primary way the organization sources revenue

Financial Intermediation

• Core activity
• Bread and butter of banks.

Interest Differential

• Measures gap between similar interest-bearing assets

Local and International Investment

• Banks can provide savings, current, and time deposit options

Types of Negotiable Instruments

• Promissory Note: Written promise by one party to pay to another at a set date
• Check: Written order directing a bank to pay from drawer's account to payee on demand
• Bill of Exchange: Order by one party to another to pay a third party at a specified date

Stale Checks

• Stale: Checks more than 6 months after issue (January 1 means June 2)
• Banks will charge a stop-payment fee
• Stop-payment is not guaranteed if processing
• Crossed Check: Exclusively for deposit
• Endorsed Check: Transferred to an individual
• Re-Discounting: Check encashed with value reduction in favor of the third party
• DAIF (Drawn Against Insufficient Funds): Returned due to lacking funds, often called a "bounced check."
• DACA (Drawn Against Uncleared Deposits): Returned because of pending deposits

Stop Payment

• Stop Payment is blocking a lost check, with a fee of 5,000 pesos or 1%
• Prevent payment by blocking checks that are issued erroneously or lost

Interest Bearing Assets

• Deposit Asset: Funds entrusted by depositors
• Receivable Asset: Retail Customer Lending (Individual accounts/ Credit Cards)
• Business Lending Solutions (B2B): Revolving Credit Facility & Tranche Capitalization

Monetary Policy and Currency Management

• Central bank handles the Monetary Policy (e.g., Bangko Sentral ng Pilipinas)

General Mass Circulation

• Banks function to circulate bills

Unified Banking Filtration

• Banks remove old bills from circulation

Banking Org Structure

• Business Intelligence: Uses analytics and segmentation. Focuses on market segmentation, customer profiles to drive decision-making
• Customer Relationship Management (CRM): Customer Interaction & Loyalty programs enhance Customer Engagement
• Automation & Digital Banking: Self-service, mobile apps, and AI streamline reduce costs
• Compliance: Banks ensure standards, cybersecurity, and fraud prevention
• Portfolio Management: Manages portfolio, products, and wealth strategies
• Portfolio Management aims to optimize institutions and clients.

Different Types of Banks

• Banks can be Universal, Commercial, Thrift, Savings, Cooperative, Rural, Foreign, Specialized Government, or Islamic

Difference of Universal Bank and Commercial Bank

• Universal Bank: Has all commercial powers and can invest in non-allied enterprises
• Allied Enterprises bring pooled funds into similar firms in finance, as well the other 4 sectors
• Non-Allied enterprises invest in other industries with fewer restrictions
• It is important to avoid excessive liberality to profits.

Thrift Bank/Savings Bank

• Thrift Banks and Saving Banks are used interchangeably in the Philippines
• Smaller counterparts of universal commercial banks
• There are different way of counting the assets, the network, the deposit levels, and the loan disbursement of both banks. Also, the structure of everything is different but they share an ownership.

4 Types of Market Segmentation

• Demographic: Visually verifiable segment
• Geographic: Segmentation includes Habit or Transit places
• Behavioristic: segmentation in The way people DO
• Psychographic: Segmentation is based on THINK

Segmentation to Personalization

• Old Demographic is now considered Profile Data.
• Old Psychographic is now Historical Data.
• Old Behavioristic is now Situational Data.

Cooperative and Rural Banks

• Banks are supervised by Bangko Sentral ng Pilipinas (BSP)
• Cooperative banks are overseen by the Cooperative Development Authority (CDA)
• Rural Banks: Supervised by BSP

Cooperative Principles

• There must be intervention of the regulatory
• 7 Principle: Voluntary & Open Membership. Democratic Member Control, Member's Economic Participation, and Cooperatives

Foreign Banks

• BPO (Business Process Outsourcing) Companies (ANZ and Deutsche Bank that are not foreign Banks in the Pilippines
• Foreign Bank is where can open their account or banks

Specialized Government Banks

• Development Bank of the Philippines (DBP): Authorized for government contracts

Islamic Bank

• The Shaira Law is why the Integrated Economy (ASEAN) is ultimate impediment.

Fundamental Products (Islamic Finance Contracts)

• Contracts follow: Musharakah, Mudharabah, Wakalah, Takaful, Qard, Ijarah
• Partnership: Musharakah
• Profit-sharing: Mudharabah
• Agency: Wakalah
• Takaful: Islamic Insurance
• Qard: interest-free loan
• Ijarah : Leasing (securing collateral)