Marketing in Finance & Investment

• Unit 1 discusses marketing across the finance and investment industry.

Nature of Financial Institutions

• Banks are the most common financial establishments due to their physical presence.
• Banks and financial institutions have virtually limitless expansion opportunities due to the unique nature of what they offer.
• Financial institutions purchased 61% of ad seconds on the top two VHF networks in Metro Manila.
• Financial institutions sourced 47% of accelerated SEO revenues.
• Banking and finance significantly support the promotions and advertising industry by facilitating banking and investments.

Investment

• An investment involves purchasing an asset with the expectation of future income or resale at a higher price.

Assets

• Assets require proof of ownership registered under national authority.
• Land/houses are registered at the Land Registry Office.
• Vehicles are registered at the Land Transportation Office.
• Boats/ships are registered with the Maritime Industry Authority.
• Banks are regulated by Bangko Sentral ng Pilipinas
• Insurance companies are regulated by the Insurance Commission
• Stocks are regulated by the Philippine Stock Exchange.

Financial Literacy

• Includes understanding and effectively using financial skills for personal financial management, budgeting, and investing.

Traits to Be Rich

• Extroverted.
• Conscientious.
• Emotionally stable.
• Not neurotic.
• Self-centered.

Customer Lifetime Value

• Defined as the net profit contribution of a customer over time.
• Generally, 60% of customers are profitable, 20% are very profitable, and 20% are non-profitable.

Dependence

• 97% of salaries are paid out via banking services.
• Government service fees and registrations aim for 100% bank infrastructure transfers.
• 100% cashless payment migration is projected by 2024.

Investment Product

• Offered to investors based on an underlying security or securities group with the expectation of earning a favorable return.

Challenges in Finance

• Selling something that cannot be immediately enjoyed.
• Highest form of delayed gratification.
• Exposure to risk.

Cooperative Risk Sharing/Pooling

• A universal principle for financial systems where no single unit exists alone.
• Everyone's earnings and risk exposure vary.
• Money must circulate, so finance should be pooled to maximize its value.

Gain

• An investment or asset's accumulation of value requiring an initial cash outlay.

Loss

• The reduction or decimation of an asset or investment's value.
• Happens based on resources directed towards investment
• Savings deposits gain interest as opposed to salary which is earned.
• Spending salary can result in a loss if stolen or devalued due to inflation

Brand Asset Evaluator

• Assesses a brand through: differentiation, relevance, esteem, and knowledge.
• Brand Strength is combined from Brand Strength/Vitality and Emotional Capital.
• Aims for brands to target Sincerity, Excitement, Competence, and Sophistication.
• Competence is valued in investment marketing.
• Brands should prioritize competence and convenience.

Ultimate Taglines/Statements

• Emotional, Project Consumer Confidence, Builds Rapport
• Should be easy to pronounce and symmetrical

Strong Brand Names

• Should suggest Strength, Energy, Reliability, and Familiarity.

Requirements of a Good Brand Name

• Compatibility with offerings and identity and Memorability

Negotiable Instrument

• A method of value transfer affected by the "time lapse" principle based on the date on the cheque

Value

• Tangible value includes benefits, features, taste, and components.
• Finance is quantified actual monetary equivalent.
• Acquisition value is the price perceived by the owner and fetched in the marketplace.
• Intrinsic value is based on an underlying perception of its true value, which can vary from the market value
• Variables affecting value include Taxation, Growth Rate, Yield, and Non-Economic Factors

Seller's Market

• Occurs when real inventory is low, allowing sellers to raise prices due to high buyer demand.
• The timing of the market is important.

Ponzi Scheme

• A fraudulent investment scheme where existing investors are paid returns from the funds of new investors.
• "Love gift" is the monthly investment earned
• When the funding dries up, the Ponzi scheme collapses and investment is lost

Pyramid Schemes

• Investors earn returns from recruiting others or selling products.

Universal Banks

• Offer commercial and investment banking services.
• They are commercial banks with the authority of an investment house.
• Example financial allied enterprises of a universal bank: leasing companies, banks, investment houses, financing companies, credit card companies, financial institutions catering to small and medium-sized industries, including venture capital corporations, companies engaged in stock brokerage or securities dealership

Commercial Banks

• Accept deposits, offer checking accounts, make loans, and provide basic financial products.
• Does not have additional authority like a Universal Bank

Thrift Banks

• Specialize in savings accounts and home mortgages for consumers in rural areas
• Offer personal banking services, credit cards, and online banking.

Islamic Banks

• Adhere to Shariah law.
• No interest rate percentage (Riba).
• Amanah Islamic Bank is the only one in the country.

Methods Islamic Banks Achieve returns

• Mudharaba: Trust Financing.
• Musharaka: Participating Financing.
• Murabaha: Cost-Plus Trade Financing.

Sukuk - Compliant Bonds

• Based on non-interest security.
• Halal work and earnings are rewarding

Cooperative Banks

• Provide services like personal banking.
• Organized/owned by cooperatives.

Rural Banks

• Serve smaller, rural communities.
• Typically Privately owned

Government-Owned Banks

• A bank, or financial institution, in which a state, municipality, or public actors are the owners

Digital Banks

• The BSP has licensed 6 digital banks in the Philippines by June 2022
• Tonik Bank got its license on June 3, 2021.
• The Overseas Filipino Bank (OF Bank) of the Land Bank of the Philippines got its license on March 25, 2021.
• UnionDigital is a subsidiary of UnionBank and got its license on July 15, 2021.
• UNO Digital Bank was formerly known as UNObank and got its license on June 3, 2021, as well.
• GoTyme is a partnership between the Gokongwei Group and the Singapore-headquartered digital banking group Tyme
• Rural Community Banks

Banks Core Business

• Financial intermediation channels funds with Interest Differentials
• Includes Deposit Assets and Receivable Asset
• Deposit Assets = Deposit Asset (funds in various formats and receivable assets (loan products)
• Paramount to the Industry; supports trade & connects all finance
• Financing: consumption driver, transaction gateway and payment channel.

Deposit Asset

• Savings Account (maintaining balance)
• Current Account (Savings account with negotiable instrument)
• Time Deposits (penalties with early termination and "Special Deposit Accounts")

Checks

• Cheque or Cheque terms for negotiable assets
• Check validity expires after six months or is "Stale"
• May be crossed or marked as a "crossed check" for account deposit only

Business Lending Solutions

• Revolving Credit Facility: a predetermined amount of money
• zTranche Capitalization: periodic fund infusion

Banking Core Marketing Thrust

• Amidst homogenous services and forces beyond institutional control, superior Branding and Innovation are necessary

Touchpoint

• Every encounter between customers and businesses exchanging info, services and transactions.

Omnichannel

• Interactions are where customers meet and data is consistent (online banking is the same as mobile banking)

Decade of Omnichannel

• Facilitates payment, charge verification, and cash collection

Benefits of a Payment Gateway

• Allows millions of transaction users, reduces fraud with payment authentication steps, various payment options and reconcilation

Decade of Payment Technology

• Data mining (profile, historical, situational and behaviour data) and customer life time value

Digital Finance

• Increasing digital financial transactions

Finance and Competition

• Banks compete for the sector of people who have yet to experience the services
• Bank Interest Rates are convered by Banko Sentral(RA7653 ART 2), 1 cabinet and president appointees

Bank Goals

• Aim revenue by Tangible Goods through Marketing Plan, supplement increase of purpose volume by asking existing clients to avail of loans, and open accounts

ALCO

• Supervisory committee coordinate of asset liaibilities

Types of Insurance

• Composite: Provides Life and Non-Life Contracts
• Life: Provides beneficiaries payment
• Non-Life or general insurance
• Reinsure
• Term Life: pays larger death benefit
• Governed by Insurance Commission

Core Business of Insurance

• To Premium (customers paying monthly, quarterly or early), and Investment

Insurance Assessment

• Underwriting and requirement verifications and Risk