Ph.D, Krukhmal O.
Ukrainian Academy of Banking
of National Bank of Ukraine (Ukraine)
Ph.D., Evchenko N.
Ukrainian Academy of Banking
of National Bank of Ukraine (Ukraine)
DEPOSIT POLICY OF
BANKS BASED ON BEHAVIOR OF CONSUMERS
Essential
precondition for the stable positions of the bank in competition for the
depositor and successful realization of the purposes of the deposit policy is
to research the spectrum this kind of services offers other appropriate banking
institutions within the region or target group of clients and developing
relevant strategy in the market. Taking into account escalation of interbank competition in terms of deposit outflow especially
important are the issues of formation of such a strategy in the area of deposit
services that can be able to turn a simple depositor to a reliable partner of
the bank and to provide them with strong and a long lasting business
relationships.
In order to
determine strategic directions deposit policy banks will analyze changes in
deposit base and define features
behavior of consumers of deposit services due to banking crisis.
In late 2008 and the first half of 2009 significantly
reduced the volume of bank deposit resources as a result of the financial
crisis in the country. Outflow of deposits in the banking system was 20%, some
banks have lost more than half of the deposit resources. In the second half of 2009
there has been a growth of deposits. In 2010, the banking system exceeded the
level of deposit base before the crisis
period. Retail deposits increased in 2010 on the 28.5%. Deposits in
national currency grown more prompt rates than the deposits in foreign currency
– 41,6% and 17,4% respectively (Fig. 1).
Thus, in crisis conditions an important factor that
influences volume of deposit resources
is the public trust. The most effective way to return trust of the customers of
the bank is the formation of positive public opinion about its activity.
Therefore, the primary task of the deposit strategy is to support its image as
a stable and reliable bank. For solving this task first of all responsible
service of PR and marketing. Also equally important is to extend the range of
deposit products offered to depositors, and the introduction of loyalty
programs to retain customers and attract new depositors.
Fig. 1 – Dynamics of individual
deposits in national and foreign currencies during the period from 1/1/09
to 1/4/13*
*Compiled according to the National Bank of Ukraine [1]
While
developing the measures for each of the above strategies, the bank is necessary
to consider changes that have occurred in behavior of consumers of deposit
services because of banking crisis.
These
changes first of all influenced the selection of the term of deposits, currency
of deposits, type of products and allocation strategies of clients (fig. 2).
Ànalysis leads to
the following conclusions:
1. Period of stability. Clients reducing terms of investment. An important
factor is possibility of choice of expiration of deposit agreement.
2. Period of crisis. There is an active
diversification of the portfolio of deposits by currencies. For clients the preferred is the possibility
of withdrawal of deposits and increased rates when increasing the volume of
deposits.
Fig. 2 – Features behavior of consumers of deposit
services due to banking crisis
3. Post-crisis period. Some clients are
«players» that choose banks which offer a very high interest rates, others –
the stability and guarantees.
So, the bank
deposit policy
based on behavior of consumers
for increasing the deposit portfolio should be directed to attracting of new
clients (strategy of development and strategy of diversification); retention of existing clients (penetration strategy); implementation
of new directions in the development of products and services (innovative
strategy).
References:
1.
A site of National Bank of Ukraine [Electronic resource] / Bank
supervision. Data from financial reports of Ukrainian banks. – Access mode: http://www.bank.gov.ua/control/en/publish/category?cat_id=73845.
– Title from screen.