UK student banking revisited: Influences and the decision-making process
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Janki Tank was a student on BA (Hons) Business Degree, specialising in marketing, and this paper is based on her final year Major Project.
Katherine Tyler is the Director of the Westminster Service Sector Research Centre and Principal Lecturer in Marketing, Harrow Business School, University of Westminster. She received her MA from the Annenberg School of Communications, University of Pennsylvania, and MLitt from Cambridge University, where she was a Thouron Fellow. She publishes in the area of services business markets, especially in financial services. Her current research projects include buyer-supplier relationships in hedge funds, the international market in equity securities, and a pan-European study of procurement for healthcare.
Abstract This study explores the student decision-making process and in particular the criteria that influence students’ choice of retail bank for their account. There has been little recent research in this area and this study updates previous research in line with the changes to the student banking industry. Students are now much more sophisticated in their choice decisions, and location convenience, which proved to be an influential factor in previous studies, is no longer given with such importance. Keywords
Banking, student, behaviour, influence, decision-making process
INTRODUCTION
Katherine Tyler University of Westminster, Northwick Park, Watford Road, Harrow HA1 3TP, UK. Tel: +44 207 911 5000 x7306 e-mail: [email protected]
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There is a scarcity of research on UK students’ consumer behaviour in retail banking; what exists is not only out of date, but also has significant gaps. Studies of students show that locational convenience1 and free banking2 were important criteria for youth in determining choice of bank. The current research updates these studies, which did not examine special student packages or technological developments within financial services. ‘Since the withdrawal of the . . . grant system, students have had no choice but to rely on the Student Loans Company, the generosity of their parents or their bank’3 when funding for their higher education. In light of these financial burdens, retail banks have introduced special student packages, with the hope of
Journal of Financial Services Marketing
Vol. 10, 2 152–164
securing greater returns in the future as ‘graduates should secure more highly paid employment’.2 THE STUDENT MARKET Retail banks have invested in attracting the student market. The aim in acquiring a large share of the student market has been to ensure future profitability. Targeting the student market would facilitate greater cross-selling, as these consumers are likely to purchase a wide array of financial products throughout their lifecycle. Students are likely to purchase more financial products than a person who has not pursued further studies.4 It is estimated that students’ average level of debt in 2002 was £10,000, ‘an increase of £6,700 from that in 1999’.5 This highlights the severity of the financial
# Henry Stewart Publications 1479–1846 (2
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