What Skills Have I Developed?
As financial capital becomes easily transferrable from one location to another, this has resulted in companies having the ability to establish new factories and resource centers in other countries due to the ease in which funding can be transferred. It is based on this that through a study of financial services marketing, I have developed a better understanding of how financial markets operate, how consumers view financial institutions, and the various responsibilities and ethical codes of conduct that come with working in this particular field.
Understanding the Impact of Consumer Spending on Financial Services
When going over what I learned in the course, I happened to remember the correlation between consumer spending, financial markets, and how this impacts financial service marketing. The main problem with consumer markets in economies such as those within the U.S., Europe, and the Middle East is the fact that consumer spending is at an all-time low which has resulted in the current economic downturn since consumer spending is the primary basis of economic recoveries or recessions (Fornell, Rust & Dekimpe 2010, pp. 28-35).
Unfortunately, the inherent problem with the current situation is that it creates a vicious cycle wherein low consumer spending results in companies reducing various aspects of their operational capacity (i.e. manufacturing of products, low-level employees etc.) in order to remain in business which results in even lower consumer spending since people don’t have jobs to support themselves anymore. An example of the effect of such behavior by major corporations can be seen in the U.S. wherein up to 8% percent of the population is unemployed due to workforce cutbacks employed by various companies in an attempt to continue to remain viable despite lackluster local demand (Larson and Hamilton 2012, pp. 218-230).
What I learned from this situation is that financial institutions tend to develop a considerable degree of “hesitance” in that they become more reluctant than ever to loan out money or to spend. While many would view this as an adverse situation, what I learned from the course is that such an environment of fear creates opportunities for companies to steal market shares through brand differentiation (Taylor 2009, pp. 77-80). This means showing a willingness to lend, to understand the plight of consumers, and to take the necessary risks (to a certain degree) in order to grow the organization while others are merely trying to conserve what they have (Taylor 2009, pp. 77-80).
It is based on this that I have come to realize that this course has helped to change the way in which I think analytically regarding financial services. Whereas before I would normally view an economic recession as the worst time to market any form of product, I now realize that in such an environment of fear and hesitation acts the ideal ingredients for an organization’s success by offering consumers the services they crave while everyone else is shunning them. I saw one notable example of this through the various Silver and Gold Plus credit cards that were being issued by various banks to consumers that have been labeled as “high risk” (Taylor 2009, pp. 77-80).
While normally banking institutions would shun such consumers due to the possibility that they would be unable to pay the bank back, the fact is that by implementing a higher than the normal interest rate and limiting the amount of money that could be spent per card, the financial institutions that had marketed such cards found a new and profitable venture (Harad 2013, pp. 18-20). This is just one of the many observations that I have made over the past few months and it is based on this that I can state that the way in which I view risk has been completely changed.
Knowing When to Shift to New Consumer Markets
From this course, I have come to realize that sticking to a particular course of action when it comes to financial service marketing is the surest way to ruin a company. It is necessary to adjust based on what the current market environment shows. The problem with the current consumer market situation in both the U.S. and Europe is the fact that the atmosphere of economic uncertainty and the fact that there is widespread unemployment has drastically reduced consumer spending (Oumlil & Williams 2011, pp. 274-286). Low consumer spending results in wasteful operational costs such as storage, utilities, taxes, worker salaries, and employee benefits (Theron and Terblanche 2010, pp. 383-402).
The fact is the current consumer market situation within the country is not conducive towards sales and, as such, numerous companies and financial institutions are suffering because of it (Sashi 2011, pp. 296-308). Through this course, I have learned that one possible avenue of approach that can be implemented is to shift resources towards foreign markets that have not been as adversely affected by the current economic downturn and focus financial service marketing efforts there instead of in cathartic local markets.
Asian markets such as those within China and the A.S.E.A.N (Association of southeast Asian Nations) present themselves as viable consumer markets due to the fact that despite the slowdown of various western economies, eastern economies have actually grown on average by five to eight percent annually (Meester et al. 2010, pp. 725-741). This is due to the fact that as the expense of doing business within western nations rises companies start to shift their manufacturing operations to other countries with far lower operational expenses. I would not have otherwise known that such a strategy could be feasible if it was not taught to us through various readings and lectures.
Ethical Advertising
Another important lesson that I learned from the study of financial services marketing is the concept of ethical advertising and how it is an important facet of developing a plan for a financial institution. Businesses are primarily profit-driven and, as such, seek to maximize profits and reduce costs in any way that they can. Barriers to doing so come in the form of laws that either limit particular practices (such as environmental conservation laws), outright ban particular practices (as seen in the case of laws against corporate collusion and the formation of monopolies) or implement measures that constrain a company’s ability to produce goods at a far cheaper rate (labor laws and local tax rates) (Ivan 2012, pp. 101-104).
In the case of financial services marketing, getting around such barriers can often entail “stretching the truth” so to speak when it comes to offering particular products and services. For example, when examining the cause of the financial crisis a vast majority of the blame can be heaped on the exposure of multiple institutions to toxic subprime debt (Cherchem 2012, pp. 109-114). It was seen that the unpaid mortgage debt was intentionally wrapped in a package of high rates of insurance, was given triple-A accreditations by various financial institutions, and was advertised to multiple firms and holding companies as a safe and lucrative bet given the state of the real estate industry (Chuah & Devlin 2011, pp. 456-469).
As we now know, this blatant unethical method of financial marketing resulted in billions of dollars in losses for investors which in turn brought the global economy to its knees. Various U.S. based companies get away with such actions by stating that they were unaware of such practices since the work was contracted to another company yet it is obvious that there is no way that they would not have known given the savings/profits they gain from such practices (Chuah & Devlin 2011, pp. 456-469).
It is based on this and other examples given throughout the course that I came to the conclusion that when it comes to marketing financial services, it is important, to be honest to clients, to state the truth, and above all focus on the well being of those that you are advertising to (Thwaites and Lee 1994, 377-390). By doing so, creates a distinct level of trust between you and your clients which results in better long-term relations rather than a relationship of mutual distrust.
Understanding How Learning about Financial Service Marketing has affected my Behavior
By completing this course, I have become aware that I:
- Have flaws in my knowledge regarding financial services
- That I suffer from hubris
- The inability to see beyond my own ideas
- I judge before knowing and I am a pessimist till the end.
Since the start of this course, my understanding of these inherent flaws of mine has increased. I have noticed for the first time my bad habits, my errors in judgment, and everything that has held me back from truly exercising effective choices when it comes to financial services marketing. While it may be true I have achieved a relative modicum of success, rising above others, being at the top of my game so to speak, but it is only at the start of these lessons that I have learned lately that I ask myself this question: at what cost has my rise to success been? I imagine at times the number of ideas I have shot down, the indifference with which I have regarded my fellow students, my lack of emotional sentimentality, my avoidance of conflict resolution, and my weakness in the face of pressure.
I compare these to the strengths which I have gained at the completion of this course: my strength of character which has seen me through many successful classes, my adherence to cold logic, my decision-making process which has executed a great number of successful papers and assignments and finally my sheer determination to succeed which has propelled me forward. Yet after comparing what I am to what I could become I find myself severely lacking, not only in a professional sense but in an emotional sense as well.
My strengths have led to the creation of numerous weaknesses that fester beneath the surface just waiting to be released. As I undertook this course I realized that I have to resolve my indifference, my closed-off emotions, my reluctance to resolve topics that I do not understand, and finally my inability to think on my feet. This inherent overconfidence and faith in a flawed set of skills will cost me dearly in the future should they not be resolved. It is due to this that I undertook this course with the full intent of knowing what I must do to become a better financial services manager and a better person when it comes to utilizing proper decision making.
Determining how the Skills Developed Will Help me in my Future Career
It is the skills that I have developed in this course that reinforced for me the notion that I wanted to be in a position where I can be the one that turns the cogs rather than being one of the cogs myself (i.e. being a boss instead of just an employee). In terms of my overall development by the end of the course with the skills that I have developed, all I can say is that I come out from a changed person. I understand now what problems I had with the various concepts that used to elude me and I now know what processes to utilize in order to effectively create a marketing concept for financial services. In terms of overall satisfaction, I would have to say that I am only 95% satisfied with the end results of this course.
I have learned many techniques that I will definitely employ once I get into the workforce and there are various unique viewpoints that I have come to adapt to my own, yet, there is a distinct lack of sufficient, on hand practical training in actually being able to put what was learned into practices using mock examples of marketing situations. It is based on this that I realized that despite all the skills and training I have accumulated; I still have much to learn. Aside from that, the overall level of education was superb and I definitely learned a lot.
Reference List
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