Question

Much of the intense competition in the financial services industry comes from products that are the most standardizes, such as mortgages, automobile loans, money market accounts, savings accounts, and so on. These products will offer very low profit margins. If you managed a small community bank today, devise a strategy to compete in this environment.

Answer 1

Yes, indeed. Intense competition in the financial services industry comes from products that are the most standardizes, which offer very low profit margins.

It is very important to strategize and create a differentiator to win customers:

-Creating a process to remove duplication of work.

-Creating a customer-centric culture in the organization.

-As the product is standardized then a key differentiator is personnel involved in the transaction.

-Analysing the wrongs and strategizing the plans to make it right in future.

-Building the best Fintech landscape possible by using computer programs and other technology to support or enable banking and financial services. It is become a need to provide the most advance technology to a customer which keeping is easy to use and secure. We are living in a smartphone carrying generation where banks have started leveraging by using technology/innovation to capture market share from the competitors in many areas of financial services. Specially the retails customers have been loving the mobile app based experience for all their banking tasks.

-Reduction of un necessary expenses which can be ignored.