With the portfolio approach, it is considered that any banking product from the moment of its inception goes through a number of stages of development, collectively called the product life cycle (LCP). The number of stages in the product life cycle is different, but experts distinguish the main four:
Introductory stage
Growth stage
Maturity stage
Decline stage
The introductory stage of the product life cycle is characterized by low sales volumes and often negative financial results (losses). This usually does not last long and is explained by the action of the following factors: the unknown of the product to consumers and the associated high level of expenses for its promotion; limited opportunities for distribution, etc. In this regard, some banks prefer not to be the first, but to introduce products that have already proven themselves in the market.
For example, bank cards are at the introductory stage in Russia (mainly in provincial markets). The purpose of the bank is to familiarize customers with this type of service, the emphasis is not on details, but on the fact that the bank has begun to provide services of this kind.
After passing the introductory stage, the product is in the growth stage. At this stage, competition intensifies, because other banks are also looking to add a successful product to their assortment. At the same time, the goals of the communication policy are changing: since the product is already known, the emphasis is on making it recognizable, differentiating your product from similar products. This stage is characterized by both a decrease in prices for products for which a high price was initially set, and an increase in the price of cheap products. The product can be modified in the direction of better conformity of its characteristics to the needs of consumers.
Financial results at this stage become positive and acquire an upward trend. In the domestic banking market, most of the products are just at the stage of growth.
After the growth stage, the product enters the maturity stage. A characteristic feature of this stage is a slowdown in sales growth and an increase in profits. The competition is starting to subside. Changes to the product and organization policy are required. Prices may be slightly reduced. Distribution activity decreases, attention switches to other products. As profits decline, measures can be taken to reduce costs.
During the decline phase, products are characterized by a sharp decline in sales and a constant decline in profits. The bank's task is to “scoop out” the remaining potential and remove the product from the assortment (you cannot wait until it becomes unprofitable).
A feature of banking services is that, depending on the market, certain services may be at different stages of the life cycle. In one market, a product may be growing, and in another, it may be at a stage of maturity. In Russia, this can be seen when comparing the Moscow and regional banking markets. The duration of individual stages for different products may also be different. The value of the product lifecycle concept for competitive strategy development lies in alerting bank managers to the need to develop new products to replace the outgoing ones, which helps to ensure stable sales and profit levels.
In the most general terms, strategy formulation boils down to defining the target market and methods of competition (low cost, differentiation and focusing strategies) for the bank as a whole, as well as the optimal dynamics (growth and reduction strategies) for individual business areas.
The following phases of the life cycle of a banking product are distinguished:
Introduction to turnover (characterized by a rapid growth in sales);
Growth (the number of sales is stabilizing, competition between banks for the end consumer is increasing, the banking product is being improved);
Recession (can be stretched over tens of years, due to the commitment of clients and banks to the usual forms of cooperation).
Classification of banking services.
The classification of banking services is based on a number of criteria that characterize the features of their provision to customers.
By focus on meeting the needs of the client, there are:
Direct services that satisfy the immediate wishes of the client;
Indirect or ancillary services that facilitate or make more convenient the provision of direct services without generating additional profit for the client and generating additional income or reduced costs when using direct services.
According to the segmentation of customer groups, the following levels are distinguished:
1st level - products and services that may be in demand by a large number of consumers (account opening, cash management, clearing services);
2nd level - services requiring a special level of training of banking personnel (asset management, investment services);
3rd level - services requiring professional knowledge in the use of services (services in the field of corporate finance, management of mixed assets);
4th level - services that require special knowledge in the field of financial planning.
Banking requires the formation of a portfolio of services offered, the organization of trade and their sale to the end consumer, i.e. needs a banking market. The banking services market is the sphere of market relations that provides supply and demand for banking services in order to meet the needs of customers.
The constituent elements of the banking services market are:
regulation of relations in the banking services market by the norms of national and international law;
availability of a portfolio of various services;
free pricing for banking products and services;
• combination of methods of market and state regulation of the banking services market to maintain its relative stability;
transparency of information on the state and development trends of the banking services market, its participants;
unlimited number of participants.
In the structure of the banking services market, according to several criteria, various segments can be distinguished.
For the object of purchase and sale within the framework of the commodity structure of the market:
credit services market;
deposit services market;
payment services market;
investment services market;
the market for trust services;
the market of consulting services;
cash services market, etc.
By consumer groups:
wholesale market - a market for services for enterprises and organizations;
retail market - a market for services for individuals and individual entrepreneurs.
By the territory of the bank's activity:
local banking market, limited to the city, region;
national banking market - within one country;
international banking market.
Each of the selected segments can be subdivided into smaller parts depending on the goals and objectives set by the bank.
Sales channels for bank products and services.
There are many classifications sales channels for banking products... These include direct sales,cross sales ( cross-selling in the bank), remote.
In addition, sales of each type of banking services can also be organized through various channels... For example, consumer loans - sell through corporate sales channel(employees of verified companies), retail canal (street canal) as well dozens of others(outdoor advertising, TV, radio, mailing, etc.).
Also, from the point of view of bank marketing, it is very important analyze data on sales channels and determine the most effective channels.
Channels for increasing sales of consumer loans
Depending on the issuer - the organization that issues and supports PCs, and therefore on the scope of application, the following types of cards can be distinguished:
- banking, issuer - bank;
- trade, issuer - shops;
- fuel, issuer - filling station networks;
- transport, issuer - transport organizations;
- telephone, issuer - telephone companies;
- joint(co-branding), the card has several issuers.
Depending on the method of recording and processing data on the PC card, they are divided into the following types.
- Embossed- information is applied to the surface of the card by embossing or thermal printing.
- With bar codes- information is applied to the surface of the card in the form of a barcode.
- With magnetic strip- information is entered on a magnetic stripe, which is then placed on the surface of the card.
- Integrated circuit... Cards in this category are subdivided into the following subtypes:
- memory cards... A chip of low performance is used, which, as a rule, allows only storing information without the possibility of overwriting the latter;
- microprocessor, or smart cards- programmable devices capable of reading, writing and processing information.
By payment cards are divided into the following types.
- Account cards. Cards of this type are tied to a specific personal account, with which, according to accounting rules, all payments for card transactions are made. There are two types of card data:
- debit cards. The card is tied to a specific current account, card payments are allowed within the free balance ( available balance) on the account, overdraft (borrowing money from the issuer) is unacceptable. It can be used to pay for goods or services, as well as to receive cash within the balance in the bank account. One of the variants of this card are the so-called prepaid cards, where a pre-deposited amount is used as an available balance;
- credit cards. They serve to obtain a user loan, the holder uses the issuer's funds, and then pays off the arisen debt. The maximum amount of ship debt ( credit limit) is determined by the card issuer. These cards can be divided into three categories:
- payment cards. The card works with a current account, but allows an overdraft within the specified limits. The overdraft debt must be paid at the end of each month,
- revolving overdraft cards. The card works with a current account with a permissible overdraft, there is no requirement for monthly repayment of outstanding loans,
- revolving credit cards. The card works with a loan account, there is no requirement for monthly debt repayment.
- Cards without an account. Provide transactions not related to payments. As a rule, this is access to services or discounting (calculating the cost taking into account certain factors or providing the holder with discounts or other benefits by the card issuer) when paying for goods or services.
According to the duration of use, cards are divided into the following types:
- disposable. Cards work only in data reading mode. As a rule, these are prepaid cards, in which the available balance decreases during the use of the card and cannot be replenished;
- reusable (rechargeable). The available card balance can be replenished.
According to the method of reading, cards are divided into the following types.
- direct reading. The card is powered by a special reader; in addition, direct contact between the reader and the contact area of the card is required;
- contactless. They allow using the card without direct contact with the reader. The power supply of the card is based on the principles of electromagnetic induction.
The following are distinguished by the number of applications supported by the card:
- single-purpose cards- support one application;
- multipurpose (multiapplication) cards - support multiple applications.
7.2. Plastic Card Standards
The standards used in the manufacture and sewing of plastic cards are shown in Table 7.1.
| № | Name | Content |
|---|---|---|
| 1 | ISO / IEC 7810 Identity cards - Physical characteristics |
|
| 2 | ISO / IEC 7811 "Identification cards - Method of recording" |
|
| 3 | ISO / IEC 7812 "Identification cards. Numbering system. Registration procedure for issuer identifiers" |
|
| 4 | ISO / IEC 7813 "Identity cards. Bank cards" |
|
| 5 | ISO / IEC 7816 "Identification cards - IC cards with contacts" |
|
| 6 | ISO / IEC 4909 Identity cards - Track 3 data content of magnetic stripe |
|
| 7 | ISO / IEC 14443 "Identity cards. Contactless integrated circuit cards with contacts. Contactless reading cards" |
|
| 8 | ISO / IEC 15693 Identity cards - Contactless IC cards with contacts - Radio communication cards |
|
7.3. Card appearance
The ID-1 format map is a parallelepiped with rounded edges with certain parameters (Table 7.2). Cards of ID-2 and ID-3 formats differ only in size; in terms of other physical characteristics, they coincide with cards of ID-1 format. ID-000 cards are produced as a part that is extracted from an ID-1 card (to remove an ID-000 card from an ID-1 without the use of auxiliary tools, a relief zone is located around the perimeter of the ID-000 card).
| P / p No. | Card type | Width, mm | Height, mm | Thickness, mm |
|---|---|---|---|---|
| 1 | ID-1 | 85,60 | 53,98 | 0,76 |
| 2 | ID-2 | 105,00 | 74,00 | 0,76 |
| 3 | ID-3 | 125,00 | 88,00 | 0,76 |
| 4 | ID-000 | 25,00 | 15,00 | 0,76 |
Front side
The front of the card contains the following information:
- financial institution logo;
- payment system trademark;
- embossed data;
- card chip pins (for cards with integrated circuits, the location is determined by the ISO / IEC 7816-1 standard).
Embossing implies the formation of embossed characters, which can later be used to print these characters on special forms using a device called an imprinter. The ISO / IEC 7811 standard specifies the acceptable characteristics of embossed symbols, as well as the location of two embossing zones on the face of a payment card.
The first embossing area is designed to position the embossed symbols of the card identification number, as defined by the ISO / IEC 7812 standard. The card identification number is equivalent to the PAN (Primary Account Number). PAN is no more than 19 digits in length and consists of the following parts.
- Major Industry Identifier (MII). Industry affiliation of the card. The first digit can take the following values:
- Issuer identifier. Digits from the second to the sixth. The first six digits together form the Issuer Identification Number (IIN).
- Client account identification number. Digits from the seventh to the penultimate one, no more than 12 digits.
- Luhn Check Parity. Determined according to the ISO / IEC 7812 standard. The last digit is PAN.
The second embossing zone can contain four rows of 26 characters each. As a rule, this zone contains the validity period and the name of the cardholder.
Downside
A magnetic stripe is located at the top edge of the back side of the card (if there is one). The data is stored on three tracks, with the first two being read-only and recording identification information; the third track can be used in read / write modes and is intended for storing and modifying data used in transactions.
There is a place for the cardholder's signature under the magnetic stripe. Also, on the back of the card there may be a photo of the card holder and some additional information.
Rice. 7.3.
The site contains the following contacts:
- VСС - card supply voltage;
- RST - reset signal;
- CLK - synchronization signal;
- GND - ground;
- I / O - input / output;
- VPP - voltage for EEPROM programming;
- RFU - reserve;
- USB cards use redundant pins like D + and D– to implement a USB communication channel.
7.6. Smart card file system
The smallest logical unit of information in a smart card according to ISO / IEC 7816 is data item(DE - Data Element). In physical memory, the item is represented by data object(DO - Data Object). Each data object is represented by three fields:
- tag (tag) - encodes the class, type and identifier of the data object;
- length (length);
- value (value).
The collection of data items forms files. Each file has its own number or identifier, consisting of four 16-bit digits. There are two types of files in smart cards, shown in Fig. 7.4.
Rice. 7.4.
- DF (Dedicated File) - directory files. Define sections of the user part of the EEPROM and containing other files. The sign that the file is a directory is the zero values of the last two digits of the number. According to the ISO / IEC 7816 standard, the file system can support up to 62 DF files (01 00, 02 00,…, 3E 00). The smart card must contain at least one DF file called MF - Master File. This file is numbered 3F 00 and is the root of the tree structure that represents the file system.
- EF (Elementary File) is an elementary file. Contains smart card data. Each elementary file must belong to a DF file. Belonging to a particular DF file is displayed in the first two digits of the elementary file number, which repeat the first digits of the DF file number, of which this EF file is a "descendant". Each DF file (including MF) can contain up to 63 EF files.
Information about a file, whether it be a DF-, MF- or EF-file, is stored in the file header, which is called FCI - File Control Information, and is presented in table. 7.3.
| Tag | Data object content | |
|---|---|---|
| DF file | EF file | |
| 81h | File Size - file size | |
| 82h | File Descriptor - file descriptor | |
| 83h | File Identifier - file identifier | |
| 84h | DF Name - file name | DF Name - file name |
| 85h | DF Attributes - file attributes | |
| 86h | Conditions for creating descendant files | Access conditions |
There are three types of elementary files:
- Secret- secret files designed to store key information;
- Working- working files are used to store data necessary for organizing interaction with external applications (terminal and issuer's host);
- Internal- internal files designed to store data necessary for the operation of card applications (transaction counters, wallets, certificates).
7.7. Commands for working with smart cards
To carry out operations with the card, you must have a terminal. In the case of magnetic stripe cards, the terminal reads information from the magnetic stripe or writes information to the third track of the magnetic stripe. In the case of using a smart card, the interaction between the card and the terminal is carried out according to the "client-server" principle (the card acts as a server, the terminal acts as a client). The interaction between the smart card and the terminal is carried out using the following layers of the OSI model:
- physical - defines the characteristics of electrical signals of interaction between the terminal and the card;
- channel - interaction is carried out using TDPU-units (TDPU - Transmission Protocol Data Unit) asynchronous protocols T = 0 and T = 1 according to the ISO / IEC 7816 standard;
- applied - interaction is carried out using C-APDU (Command Application Protocol Data Unit) blocks, containing requests from the card, and R-APDU (Response Application Protocol Data Unit) blocks, containing responses to these requests from the terminal.
The structures of these blocks are presented in table. 7.4 and 7.5.
The list of commands used to work with smart cards is given in table. 7.6.
| № | CLA | INS | Command | Description |
|---|---|---|---|---|
| 1 | 08h | 1Eh | Application Block | lock the selected application |
| 2 | 08h | 18h | Application Block | unlock the selected application |
| 3 | 08h | 16h | Card clock | lock all card applications |
| 4 | 00h | 82h | External authenticate | cardholder authentication |
| 5 | 08h | AEh | Generate Application Cryptogram | choice of applied cryptogram |
| 6 | 00h | 84h | Get Challenge | random number generation for cryptographic algorithms |
| 7 | 08h | CAh | Get Data | reading data objects |
| 8 | 08h | A8h | Get Processing Options | initiation of transaction execution |
| 9 | 08h | 88h | Internal Authenticate | card authentication |
| 10 | 08h | 24h | PIN Change / Block | change / block PIN-code |
| 11 | 08h | B2h | Read Record | read record in file |
| 12 | 08h | A4h | Select | file selection |
| 13 | 08h | 20h | Verify | PIN check |
7.8. Ensuring the security of transmitted data
Data security in smart cards is provided by solving three problems:
- card and owner authentication;
- encryption of transmitted data;
- generation of message authentication codes (MAS).
Card and owner authentication consists of two stages.
- Mutual authentication of the owner and the card. The procedure algorithm is as follows:
- the terminal asks the card to generate a random number and determines the encryption algorithm;
- the card, using the built-in generator, generates a random number, transmits it to the terminal, and also encrypts it using the specified encryption algorithm, using the PIN-code written in the card as a key;
- the cardholder enters the PIN-code on the terminal keyboard;
- the terminal encrypts the random number received from the card using the selected encryption algorithm using the PIN-code entered by the user as a key. The encryption result is sent to the card;
- the card compares the encryption result with the sent value. If the values match, it means that the cardholder has entered a PIN that matches the one stored in the card, i.e. mutual authentication of the card and the owner was successful.
Most smart cards have a built-in counter for the number of incorrectly entered PIN codes. Upon reaching a certain value of this counter, the card is blocked.
- Mutual authentication of card and terminal. The procedure algorithm is as follows:
- the terminal generates a random number, sends it to the card and determines the encryption algorithm;
- the card encrypts the received value using a predetermined algorithm on a secret key known only to the card and the terminal, and sends the calculated value to the terminal;
- the terminal performs the same actions and compares the received values. If they match, it means that mutual authentication of the card and the terminal was successful.
- information encryption is carried out as follows. The terminal selects a symmetric encryption algorithm (as a rule, this is a specific algorithm for a specific issuer) and informs the card about the selected algorithm, after which a shared secret key is generated, on which the transmitted information is encrypted. The secret key is generated for each new transaction.
- pre-personalization data recording.
- Card personalization:
- recording information about the issuer;
- recording information about the cardholder;
- download applications used by the issuer's payment systems.
- Card issue:
- placing the chip in a plastic case;
- applying the logo of a financial institution;
- application of the trademark of the payment system;
- application of embossed data.
- Using the card.
- Cancellation of the card. The reasons for card cancellation can be as follows:
- the card has expired;
- the available balance for disposable cards has been used up;
- all memory cells reserved for data are filled;
- the security of the card has been compromised. access to the envelope with the card. In this case, it is not necessary to open the envelope. Such an attack can have serious consequences, since the attacker, in addition to the data from the card, also knows the data of the addressee, i.e. the owner of the card. Physical access to mail is extremely easy (for example, in dorm rooms or mailboxes along the road).
There are many varieties of this attack. For example, a very common attack such as "Bump-and-run" (literally "bump and run"), when the contents of the victim's wallet becomes available for viewing in a busy queue, elevator or subway.
Some consumers with smart cards with sufficient reading range prefer to simply hold the wallet near the reader rather than pull the card out. This is the basis of attacks, during which the attacker's readers with powerful radiation can read the customer's credit card information while he simply reads the sign and gets close enough to the attacker's reader. Another place where an attacker can illegally read data from a smart card is in the gym, where visitors often leave their wallets in an unguarded locker by the door.
Listening. When listening, an attacker uses an antenna to record data transmitted during communication between the reader and the smart card. Since eavesdropping occurs during live communication (for example, in a store), external protection (case) will not be able to prevent such an attack. The success of an attack depends on many factors, including the reading range.
Submitting a repeated signal. In this attack, the attacker transmits an exact copy of the radio signal received by the transceiver during the last operation between the reader and the smart card. While simple attacks of this type are easy to prevent (timestamps, one-time passwords, Q&A cryptography), more complex attacks can still be successful. In this attack, known as a "relay" attack, the attacker transmits a signal from a legitimate device through one or more rogue devices to a legitimate target, which may be at a great distance from the attacker. The distance at which an attack succeeds depends mainly on the latency allowed by the protocol.
It is obvious that the developers of payment systems based on smart cards are forced to fight against the attacks considered. You can adopt the technique described below, which allows you to successfully defend against such attacks.
Reception is based on the use of a special blocking device - "Faraday cage", a shell impervious to radio waves in the form of a metal mesh or a casing. Today, customers can buy a "Faraday Cage" made in the form of wallets or special cases. Such solutions can successfully protect smart cards from illegal scanning. However, when the card is removed from such a case to make a purchase, the attack becomes possible again. Obviously, credit card makers should at least mail them in Faraday's Cage to avoid Johnny Carson's Attack.
Undoubtedly, in the near future, we should expect the emergence of a whole range of measures designed to ensure the safety of contactless payments.
Most likely, the new generation of cards will be equipped with a mechanism to disable them, i.e. transfer to passive mode, in which reading data from the card will be impossible. To make a payment, the user will need to "turn on" the card, possibly using a special jumper on the card itself. Also, activation of the card can be realized using the built-in light sensor, i.e. in complete darkness (for example, in a wallet). With such protection, an attacker will not be able to withdraw funds from the card. It is possible to implement a similar function based on the built-in thermal sensor, which will activate the card when touched by a human hand.
The small and medium-sized business (SME) segment is important for banks, but at the same time, it still differed from other clients by the lack of sufficient experience in working with financial institutions. Banks also preferred to work with retail, providing SMEs only with loans and basic settlement services.
If we compare small and medium-sized businesses with the corporate segment, then the former is characterized by higher risks of insolvency. That is why, when working with SMEs, a clear tracking of the client's life cycle is required, as well as more cautious banking strategies aimed at maximizing the real or projected value of a client throughout the entire life cycle.
Market situation
In recent years, banks have received the main income in the SME segment from lending. However, with the cooling of the credit market, all participants come to understand that loans are only a part of the banking business. Strengthening regulation on the part of controlling government agencies, a decrease in profitability from lending, and the entry of new players into the market are only a small part of the factors that are pushing banks to increase risk-free commission income.
In the west, this trend has been traced for more than 3 years. So, according to the study "Trends in transaction banking report", in 2011, 77% of Western banks have already seriously thought about commission income, singled out the transaction business in a separate direction and began to restructure the structure of income.
In the banks of the Life financial group, we are also looking towards increasing fee and commission income, since they do not carry such risks as income from lending. The challenge we face in 2013 is to double the growth rate of non-interest income in the SME division.
The task looks not difficult and has at least two solutions.
- Attracting new customers and increasing additional sales.
- Increase income from existing customers.
The first task of attracting new customers, one way or another, is solved by all banks on the market, but little is said about increasing income from the existing base, and the actions of banks in this direction are not so noticeable. Having seriously engaged in this process, we faced a number of difficulties, which we could solve only by starting to model the customer life cycle.
The life cycle of an SME client in banks
The classic life cycle of an SME client in a bank is shown in the figure in green (areas 2-6): a client comes to the bank, starts working and brings some income to the bank, and usually leaves after 2-2.5 years, either closing the business or enlarging and changing the bank.
The strategy we have developed for working with the client's life cycle is aimed at lengthening it and increasing the lifetime profitability from the client in each of the three areas that we allocate for ourselves:
- earlier attracting clients,
- increasing the current profitability per client,
- work with customer churn.
In this article, we will not talk about revenue growth due to earlier customer acquisition (blue area 1 in the figure) and churn (blue area 5-7), but will only touch on the growth of income from existing customers.
After attracting and stabilizing income from the client, the main task of the bank is to select and offer products and services that solve the problems of the client's business. In fact, at the moment when the client began to work with the bank and bring a stable income (reached plateau 3-4 in the figure), the bank must conduct a serious analysis of its activities and offer him a set of cross-products that are relevant at the current time - this will increase profitability (blue fill in area 3) and maintain it in the future (blue fill in area 4).
Having offered the client a business solution, increasing loyalty and profitability from the client, the bank will need to control this process and not miss the stage of the client's withdrawal into the outflow (blue section 5-7). Working with churn implies a deep knowledge of the client, the specifics of his business and needs - only due to these factors it is possible to keep the client at an early stage and extend his life cycle in the bank.
Thus, having built the client's life cycle, we have identified the critical stages for ourselves and those actions that we can take to increase the client's lifetime profitability.
Life cycle - from theory to practice
In FG Life banks, work with clients is carried out by personal managers, using CRM as one of the main tools. Setting the task for managers to increase lifetime profitability from clients, we had to give them tools for effective work - a kind of triggers signaling in CRM when and what product to offer to the client at each stage of the life cycle. Thus, we switched to using mathematical analysis, modeling and targeted marketing tools.
After analyzing the base, we allocated segments for each bank of FG Life, for each region and business area, depending on the client's life in our database, his profitability and the list of services used. If we consider each parameter separately, it seems that we are collecting seemingly elementary things. However, examining all the data in the aggregate, we reveal quite interesting patterns.
The assignment of a client to a particular segment is recorded in the client card in CRM. For each large segment (group), we single out a characteristic set of services - based on the totality of data, we build a profile of an ideal client. Comparing in the future the profile of using the bank's services for a real and an “ideal client”, we single out real customers with an incomplete range of services and carry out cross-sales, developing those lagging behind to a typical profile.
In practice, business managers receive triggers in CRM for the clients they accompany: what services need to be offered to the client, give recommendations to low-income clients.
By comparing the profitability and lists of services of a real and "ideal" client, we can display in CRM the level of potential profitability of each client, which stimulates managers to develop clients and make cross-selling.
Triggers built on the basis of segmentation and mathematical modeling with the recommendation of relevant services to the client are just one of the tools that help the business manager to offer the client a solution for the business. Other tools and work with churn of small and medium-sized businesses will be discussed in the following articles.
First of all, we sell the service, not the product, because if we fail with the service, then very soon nobody will buy our product.
Julius Fleischmann
Life cycle of banking products
One of the important factors in the successful conquest of the market is the analysis and subsequent planning of marketing activities, taking into account the stages of the life cycle of a banking service.
The life cycle of a banking product is a process that must describe all the elements of marketing from the moment a decision is made to provide a specific product, its entry into a specific market, and until its exit from the market. This is a set of sequential states of finding a product on the market, each of which over time is characterized by the state of the external environment, a set of used marketing strategies (Fig. 2.1.1).
Consider the traditional stages (stages) of the life cycle of a banking product: the stage of introducing a new service to the market, or the introductory stage; growth stage; maturity stage; stage of decline, or stage of decline (decline stage) (Fig. 2.1.2).
Rice. 2.1.1. The life cycle of a banking product
Rice. 2.1.2. Stages of the life cycle of a banking productSource: compiled by the author on the basis of T. Nikolaeva. Bank marketing. M .: EAOI, 2009.224 p.
In the first stage, the goal of marketing is to create a market for a new service. Typically, a modification to a familiar service increases sales faster than a major innovation. At this stage, the competition is inactive. Losses are due to the existence of a high level of costs for the provision of services and poor marketing. Depending on the specifics of the service and the market, the bank sets a high or low entry price for its product for the client. The characteristics of the stage are shown in Fig. 2.1.3.
Rice. 2.1.3.
Banking service- a banking operation (a set of banking operations), reflected in accordance with the rules of accounting in credit institutions on a separate account or a group of accounts grouped by the criterion of economic homogeneity.
Banking product- this is the subject of an agreement between the bank and the client. Both individuals and legal entities can act as a client. The subject of the agreement can be any operations and services offered by the bank, and their combinations.
In the second stage of growth, the goal of marketing is to expand the sales and assortment groups of a particular service. Sales are increasing, the bank is making high profits. In accordance with the growing market, modified versions of the basic service are offered, which meets the interests of a particular client, expands sales. For this there is a price range and persuasive advertising is used. The main characteristics of this stage are shown in Fig. 2.1.4.
Rice. 2.1.4. Growth stage of the life cycle of a banking productCompiled by the author
During the maturity stage, banks try to maintain their distinctive advantage for as long as possible. Competition is peaking and waning, and discounts are spreading. At this stage, services are provided to the mass market, clients and counterparties with average incomes. The characteristics of this stage are shown in Fig. 2.1.5.
During the decline or decline, products are characterized by a sharp decline in sales and a constant decline in profits. The bank's task is to scoop up the remaining potential and remove the product from the assortment (you cannot wait until it becomes unprofitable). The main characteristics of this stage are shown in Fig. 2.1.6.
Rice. 2.1.5. Maturity stage of the life cycle of a banking productCompiled by the author
Rice. 2.1.6. The final stage of the product life cycleCompiled by the author
During the downturn, there are three alternative marketing lines:
- 1) a gradual decrease in marketing costs due to a decrease in the volume of services offered and the number of their distributing branches (branches). At the same time, the bank should start offering a range of other specific traditional and non-traditional services;
- 2) revitalizing the volume of services offered, that is, changing the market position by modifying the service itself, finding an alternative market and / or form of sale, ways of promoting services to customers and advertising;
- 3) termination of production and provision of these services. A feature of banking services is that, depending on
market, certain services may be at different stages of the life cycle (Fig. 2.1.7).
Rice. 2.1.7. The final stage of the life cycle of a banking productSource: Information portal "Best Schemes". URL: nintten.appspot.com.
In one market, a product may be growing, and in another, it may be at a stage of maturity. An example is the heterogeneity of regional banking markets. The duration of individual stages for different products may also be different. The marketing results of these products are different, and this prompts bank managers to make different decisions in response to changing market conditions.
For example, the lending market in the Kostroma region is characterized by the availability of offers for the purchase of trucks, as well as used imported and domestic cars, and an almost complete absence of offers for lending to used equipment for commercial use. Over the past years, the priority area in the activities of credit institutions of the Magadan region has been mortgage lending, as well as the issuance of inappropriate loans to legal entities.
The program of providing investment loans to support entrepreneurship on preferential terms is the main one for the Sverdlovsk region. Currently, lending to legal entities is a priority area of activity for many Moscow banks, where legal entities can receive loans for a variety of purposes: replenishment of working capital, purchase or reconstruction of fixed assets (real estate, equipment, transport), purchase of copyrights, payment of salaries to staff and so on.
Decisions regarding the creation of a new product must be rational, carefully prepared and executed. This mainly concerns the initial stages, which determine the success of the product's introduction to the market. When creating a new product, the following set of actions is performed:
- identification of sources of innovation;
- selection of new products in terms of the goals of the organization, its resources and customer needs;
- conducting marketing analysis to determine demand, potential sales and product prices;
- product creation;
- product testing on trial markets;
- making decisions about changes in the product and its improvement, if necessary;
- introduction of goods to the target market / abandonment of goods.
Thus, the effectiveness of bank marketing depends on the life cycle of the product and its modification and is closely related to its perception by consumers, which changes when one of the components of the product changes.
Security of the card business: business encyclopedia Aleksanov A.K.
Main stages of the claim cycle
So, the holder, based on the information from the extract, sends a claim to the issuing bank. According to the rules of the IPS, a claim can be filed both in the form of an application written by the client himself, and in the form of an Expedited Billing Dispute Resolution Form filled out according to the client's words and signed by a bank representative. Many banks allow the filing of a protest petition from the holder by e-mail or fax. The author strongly recommends that his colleagues also require holders to submit claims in the form of original paper documents, certified by the applicant's handwritten signature. This will come in handy in order to avoid possible misunderstandings if the case eventually comes to court proceedings under the laws of the Russian Federation between the client and the bank (and this, alas, is quite possible).
An important aspect is the registration of the date of acceptance of the claim: according to the laws of the Russian Federation, the date of filing a claim is determined by the date of the postmark, which can serve as a subject of dissatisfaction among the holders in the event of a significant delay in the delivery of the letter to the bank. For example, in the terms of the bank for servicing cards, it is stated that the period for considering claims is, say, 50 days. The letter was sent on the 10th (according to the date of the postmark about sending), and arrived at the issuing bank 15 days later. As a result, the bank will formally have only 35 days to resolve the problem, which does not fit into the working ranges of the claims cycle of the Ministry of Railways. When developing client documents and tariffs, such points should be taken into account.
Upon receipt by the bank of the holder's claim on disagreement with the operation reflected in the statement, as a rule, the holder is informed about the terms of consideration and settlement of the claim. The IPS recommends that the bank employees responsible for the claim cycle keep in touch with the applicant by communicating by e-mail. It is strongly discouraged for the card claims department to communicate directly with customers by telephone. In a telephone conversation, information can be misinterpreted, which, in turn, will cause the loss of the claim cycle and financial losses of the issuer or the holder's dissatisfaction.
After a statement of disagreement with the write-off (specifically with the write-off) of funds from his account is received by the cardholder, an employee of the department conducting the complaint is faced with the problem of choosing the appropriate code for the reason for the protest. The importance of this point is that the issuer is given only one chance to choose a chargeback RC. In case of an error, there will be no second attempt, the game is over. In rare cases, the issuer has the right to send a chargeback with a new reason code upon receipt of the accompanying documentation from the acquirer upon resubmission.
Currently, it is customary to divide all codes of reasons for protests into five conditional categories (for ease of memorization, they are grouped by the first letters of the Latin alphabet):
A - authorization-related (related to authorizations);
B - (bad) faith (fraud, dishonest merchant);
C - cardholder disputes (the actual claims of cardholders);
D - documentation problems
E - erroneous processing.
So, having received the client's application, the issuer must take the first and most important step in the claim cycle, namely, select a chargeback reason code (RC). In this case, the circumstances of the case should be taken into account (how the operation took place, the mode of reading data from the card, card imprint) and the essence of the claim, the presence and content of the circumstances of the case stated by the client (prof. True nature of dispute). At the same time, it is important to comply with all the requirements of the payment system to the issuer when issuing a particular protest code. For example, if the description of the code says that before the protest, the client must contact the outlet and make an attempt to resolve the issue on his own, then the bank is obliged to recommend the client to do this, since if the proceedings come to arbitration by the IPS, the fact of the client's appeal to the outlet and the result of this appeal will be taken into account by the payment system when making a final decision on a disputable situation.
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