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Emerald Group Publishing Limited
Article Type: Editorial From: International Journal of Bank Marketing, Volume 32, Issue 2.
The papers featured in this issue of IJBM are primarily focussed on facilitating growth and innovation in bank marketing. It has long been recognized that the presence of banking systems is associated with economic growth and prosperity. Yet, in many parts of the world, banking services are not readily accessible to all population subgroups. It is the role of bank marketers to understand how banking services can become more attractive, accessible and beneficial to various market segments. The papers in this issue disseminate market intelligence which can help banks grow in markets that have traditionally been untapped. These include the markets of unbanked customers in Kenya, farmers seeking microcredit products in rural China and potential customers of Islamic banks in Lebanon. Furthermore, growth is examined from a technological perspective by studying the potential that mobile payment systems offer the general population worldwide.
In the first paper in this issue, Katwalo examines the case of unbanked customers in Kenya. Unbanked customers – those who do not have bank accounts with traditional banks – have limited access to the many benefits that banking operations provide the population. Yet, in many parts of the world, the unbanked account for a large portion of the population, significant amount of assets and banking potential. Katwalo examines the banking features that a bank in Kenya needs to offer in order to make banking services accessible and affordable for the unbanked population. To do so, primary data collection involving survey methods was used. The results show that unbanked customers respond positively to specific aspects of services offered by traditional banks. They are more sensitive to the personal attention and empathy expressed by bank employees, and the overall satisfaction experienced in the service encounter. This is an important finding as it helps banks understand the dynamics of how the unbanked can be drawn into the banking system. The results can have positive effects on the banking industry by allowing Kenyan banks to tap into an untapped market potential. This would also have positive effects on the population of unbanked individuals who can benefit from the financial services offered by banking institutions in this region of the world.
The paper by Kong, Turvey, Xu and Liu also focusses on how banking services can be made more accessible to the population. It examines microcredit lending in the rural markets of China, in the specific context of loans for agricultural needs. Of interest in this paper is the relationship between the loan officers and farmers who seek loans for agricultural purposes. The authors study 120 loan officers and 394 borrowers using survey methods. Borrowers were measured in terms of their perceptions of lenders of microcredit products, and lenders were measured in terms of their perceptions of borrowers in the same context. Cluster analysis is then used to identify borrower and lender segments. The findings indicate distinct grouping of borrowers and lenders. Four borrower segments are identified based on the need for credit and overall satisfaction with micro-lending. Two lender segments are also identified based on their financial incentives and lending activities. This is an important paper from a banking perspective, as it focusses on both the supply and the demand sides of a very unique financial market. The research findings can help this market become more active by making micro-lending a viable choice for framers in rural China in need of such credit products.
In the third paper in this issue, Bizri examines the growth potential of Islamic banks in Lebanon. This is an important undertaking since despite the growth of Islamic banking worldwide, Islamic banks have not grown as significantly in Lebanon. In this paper, Bizri focusses on barriers to the growth of Islamic banks in Lebanon. The paper reviews the state of Islamic banking in Lebanon and also examines customer perceptions of Islamic banking in Lebanon. Survey methods were used to contrast the views of customers who bank with Islamic banks vs those that bank with conventional banks in Lebanon. The research findings suggest that the decision to become a customer of an Islamic bank is driven by a series of factors, namely: trust, bank compliance with Sharia principles, past experience with Islamic banks, financial costs, the bank's accessibility and service quality. Further segmentation analysis is used to identify the typical profile of customers of Islamic banks in Lebanon. This paper is significant in that it identifies what characteristics of an Islamic bank make it attractive to its target customers. Furthermore it identifies the characteristics of typical customers of Islamic banks in Lebanon. By doing so, it provides management of Islamic banks concrete directions on how to enhance their presence in the banking markets of Lebanon.
The last paper in this issue of IJBM by Arvidson examines growth in banking from a technological perspective. It is widely recognized that use of mobile devices will revolutionize transaction processing and generate significant potentials for banking institutions as it facilitates a wide range of transaction processing services. However, as with any new technology, the challenge remains on how to persuade consumers to adopt this mode of transaction processing over traditional forms such as the use of credit cards or cash. The findings from a consumer survey indicate that ease of use is a pivotal factor in determining consumers’ first use of mobile payment services. However, other factors also help the adoption process, namely, whether this form of payment has a relative advantage over traditional methods of payment, trust in the process and low perceptions of risk. Furthermore adoption is more positively perceived by older individuals and those of lower income. From an academic perspective, this paper suggests that theories of learning, value creation and network economies can help explain the adoption process as well, if not better than traditional theories on the adoption of innovations. From a practical perspective this paper provides prescriptions on how mobile payments can become a more viable choice for the population and how banks can tap into the growth potential that such innovations present to the industry.
The research studies presented in this issue of the IJBM have focussed on facilitating growth in very unique financial markets. The research findings demonstrate how methodical examination of market needs can help bank marketers tap into previously untapped market potential. This includes providing banking services to the unbanked and the facilitation of micro-lending products in rural markets. It also includes growth that can be experienced in specific segments of the market, for example, by growing the base of customers of Islamic banks or the adoption of mobile payment systems worldwide. It is hoped that the papers in this issue help inform bank marketers on these specific growth potentials and empower them to better serve the unique needs of their customers.
Kent Eriksson and Hooman Estelami