Finding Opportunities in Retail Banking with Market Research

Retail banking is the face of the bank. Focusing on mass consumers, an extensive branch presence is considered key to maximising customer reach.  However, it’s the core banking products, offerings and service levels that are vital to continued growth supporting the bank’s customer and revenue base.

Developing a strong product portfolio to suit consumers’ needs

More governments and financial institutions are working to win over the unbanked population in developed and emerging markets. Banks are offering competitive products to new consumer segments, which has led to market saturation in many countries. Understanding competitors has become more important than ever before.

With a changing economic and technological landscape, banking is experiencing a fast pace of digitization. Banks are faced with traditional challenges in offering the right product and services. They also need to keep up with the changes in technology that are impacting both product design and delivery, which influences key investment decisions for the bank.

As a product development manager in a retail bank, it is vital to be well versed and updated on the latest trends in the banking sector, as well as understanding consumer spending patterns.

While the retail banks can rely on internal market research to understand consumer behaviour regarding existing products, getting an external perspective is required to understand the banks current standing in the market with respect to the local and global market trends – especially for banks interested in expanding into new geographies.

Having an independent market research expert eyeing global markets, products and services becomes vital to a successful product and market development strategy.

How market research can help you make the right decisions

Consider the case of expanding into Egypt. Apart from knowing key banking players and the kind of products they offer, your in-depth research also requires you to understand the following information about consumer expenditure patterns.

Consumer segmentation and insight:

  • How are different consumer segments split by income and wealth?
  • How much do consumers spend on housing, food, shopping etc.?
  • What is the average income per household?
  • What is the split between banked population vs underserved population?

Card use:

  • What is the penetration of cards in the country?
  • How many cards are owned by a person on average?
  • What is the average spend per card?
  • How prevalent are other cards such as pre-paid cards or store cards?

Digital and mobile payments:

  • Do consumers use digital platforms to make payments?
  • What is the status of mobile payments in the country and what mobile wallets are popular?
  • If consumers pay on digital platforms, what categories do they spend the highest on, retail or foodservice?
  • What is the level of POS terminal penetration in the country?

Competitive intelligence:

  • Who are the leading banks and what is there strongest offering?
  • What is the average spend per card by the competitors?
  • What strategies are banks employing to increase card spend? Are they partnering with retailers and restaurants?

Using market research to answer your questions can offer a clearer picture when entering new markets. As you gather information from multiple sources, various products may be defined differently across the globe, which adds the challenge of gathering cross-comparable and actionable data.

Market research industry experts can translate local research sources into standardized definitions to offer comparable data and insights into consumer behaviour and banking products.

Having visibility across a number of banking players can help identify key competitors and also help identify potential targets for mergers and acquisitions by understanding market composition and identifying players with similar strategic outlook, which may offer alternative routes of entering the market.

Banking sector data alone may not be enough to devise a well-integrated strategy, as the sector becomes saturated and banking gets more integrated into lifestyle choices. Banks are moving beyond their traditional roles by partnering with retail and foodservice, which are becoming important points of spend.

Knowing penetration of card payments and e-commerce and its impact on sales strategies is equally important for banks to design their offers and services. Quantitative and cross sector insights of a market can help you uncover greater details about consumer lifestyle and spending patterns.

Learn more about how Euromonitor International can help retail banks stay ahead of the competition.