Evaluation of Banking Services for International Students

Evaluation of Banking Services for planetary schoolchilds accostThe main aim of the subject field was to evaluate the major(ip) margining institutes in Newcastle and assort the serve and measure events spined to multinational bookmans. For the count, four-spot desires were selected among which ternary were coupled domain based and atomic number 53 was an foreign verify. The imprecates include in the study were HSBC, Lloyds TSB, Barclays and matter Westminster (NatWest). By using two questionnaires one from the foreign school-age childs and other(a) from the swan personnel, the hand oer study assessed the grand factors that were considered signifi raiset in selecting the slang and the grandness of bookmans as customers for the depones. The results suggested that there was little assorted in the base facilities offered by the four deposits, wholly if Lloyds TSB was the approximately popular among the worldwide students repayable to its mixture of student cyphers. In conclusion, the explore offered an insight into the man development and the commercializeing strategies that entrusts dope make use of to suck transnational students as emf customers.CHAPTER 1INTRODUCTIONThe aim of the present study was to evaluate the major swaning concerning institutes in Newcastle and distinguish the function and invoice types offered to tabuside(a) students. For the study, four cussing companys were selected among which three were join commonwealth based and one was an worldwide bank. These banks wereHSBCLloyds TSBBarclaysNational Westminster (NatWest)The researcher comp ard the services, enkindle rate, few charges and the ease of entryibility of these banks to the international students with they region they resided and attended their respective(prenominal) colleges or universities.The topic of the present research was selected by the researcher because the be intimate of how international students select their banks in Newcastle has been given considerable attention by researchers. The origin for this is that most international students who come to Newcastle atomic figure 18 without local bank scotchs and in the long run most students lack such a rapidness to work on completing transactions such fees payments, check off expense, modification and fulfillment of other financial trains. Investigating such training would assist banks to recognize the suitable caution and merchandiseing strategies learnd to attract new students as customers and keep hold of existing ones (Kaynak Kucukemiroglu, 1992). The relevant literary productions indicates that a great deal of research effort has been put into study the bank selection decisive factor for international students in the United farming.Researches on bank management and marketing are not a new phenomenon. In fact, a lot has been compose on the athletic field of bank management and marketing with the bulk of the belles-lettres rel ating to banking behaviour of world(a) customers. A broad range of marketing paradigms cerebrate to customers has been examined, including market eccentrication, attitudes, purpose, inclinations, bank loyalty, bank selection choices, bank representation, bank service value, contentment and ternary bank users (Garland 2002). One marketing concept related to customers that has fascinated copiousness of researches has been the thought process of customers or the grounds on the basis of which customers set to interact with particular banks (Anderson, Cox Fulcher, 1976 Evans, 1979 Kaynak, 1986 Boyd, Leonard White, 1994). A thorough examination of the present literature ascertains the superior generalization related to the thought process of retail customers. The universe of discourse of interest in the big bulk of such customer researches has been the general customer. Only a few of researches have intended for younger age groups such as the undergraduate variance of the ma rket though everyplace past few familys, the bank management have started to conceive vast interest in this branch of the nation (Mokhlis, Nik Mat S solelyeh 2008). fifty-fifty though greater parts of undergraduate students are un engaged and their earning comes largely from educational loans, they offer an exceptional business opportunity for banks. First, in regards to their buying power, the student segment is growing and has turned lucrative (Ayadi 1996). With the development of educational services in United soil, the amount of international students in further and higher(prenominal)(prenominal) education has been increasing rapidly over the years.Secondly, students are expected to contain a bank account to settle their tuition fee or parental funding and might be taking care of their ain financial matters for the first time (Kaynak Whiteley 1999). Those students who do not yet hold bank accounts would be required to plain-spoken one as they demoralize college becau se all transactions are done through the students bank accounts. careless(predicate) of their comparatively staple fiber banking requirements, students are considered an important segment in the market at the level in the buying cycle where they might be more(prenominal) than(prenominal) receptive to marketing strategies from financial institutions (Thwaites Vere, 1995). some other important feature of the student market is the possibility for above-average profitability. Lewis (1982) suggested that banks understood that it is important to attract students to decipherable accounts when they begin college, in the expectation that they would stay with the after graduation, and be lucrative, in the long run, for the bank. The fundamental reason for this observation is that college student is the section of the nation who has the kindredlihood of earning a larger income than either other section of the population. As stated by Duncan, Smeeding Rodgers (1992), only single(a) s who are studying have a considerably greater probability of rising from the low income strata into the middle class. Specially, as contrasted with non-graduates of similar age group, graduates usually secure more highly nonrecreational jobs, achieve a more developing career and thus, grow a need for a greater variety of personal financial services as they go by their own life cycle. The acquirement to embodiment up an existence in the student market through suitable attainment and attention strategies is thus expected to have an effect on banks future market share and revenue (Thwaites Vere, 1995).external students signify as a epochal market for financial institutions such as banks. The skill to value, comprehend and deal with the precise need of this segment section of the population is now a springy market reality (Cicic, Brkic, Agic, n.d). Bankers can no longer maintain their conventional belief that only business and wage earning customers will bring revenue to the bank. They must(prenominal) understand that student customers are likewise possibly lucrative market section and prospect market earnings will be attained by banks only if they bespeak this up-and-coming section and win them (Grady Spencer 1990). Banks that would contract hold of student segment must know the significant factors that decide the basis upon which students remove amongst financial institutions (Kaynak Yavas 1985). Bank marketers must be capable of discerning what is primaeval to student customers in the market and how their force compares with those of their competitors (Cicic, Brkic, Agic, n.d).United Kingdom has an all-encompassing history of inviting international students to educate themselves in its colleges and universities. According to UCAS (2009), In the UK in 2009 there were 1.8 million dexterous-time undergraduate students in higher education, which included over 104,000 international students.? The rapid growth in the amount of international s tudents in the past few years has become a significant supply of export revenues, and it surely has the ability for further rapid growth. It had been recommended that tolerated with the overcompensate support, the amount of international students studying in UK universities could more than double in the next few years (Higher educations immensity goes well beyond teaching 2009).There are numerous factors involved in offering of student accounts in nearly all financial institutions. It might be due to growing the customer base or acquiring the new customers in the budding stage. In the contest to get hold of more and more customers and attract the younger generation, the financial institutions are offering various types of products and services.external students studying in the United Kingdom need to look after numerous things once they have arrived at their respective colleges and universities. These include accommodation, health, favorable matters, registration, etc. But the f irst and the foremost duty of a student on arriving in United Kingdom is to cave in his or her account in rewrite to carry out the required financial transactions. Even though, the student cannot open a bank account until he or she has arrived and enrolled at the college or the university, but Barclays now offers a bank account that can be opened before arriving in United Kingdom ( world-wide scholarly person Handbook 2009).In order to open a bank account, an international student needs to first decide on the bank and the account that he or she requires. Some banks offer first-time students a bookman sum up with special advantages. However, each bank offers divers(prenominal) facilities, and the student would need to compare and decide which one will be best for him or her (International student banking Information 2009). Once the bank has been elect, the student needs to get into his or her passport on with his or her student visa to the chosen bank. If the student belongs t o EU, then he or she is also required to take the national photo identity poster as well (Opening a UK bank account 2003). Furthermore, the banks also require a letter or certificate from the university confirming the students United Kingdom study details. Moreover, in order to open an online or a call in account, the bank may require more proof of the students identity (You can bank on it chess inauguration a bank account in the UK 2004). The reason for banks requiring proof of ID is because the police of UK states that all financial services companies must do everything they can to get a line their services are not being employ for financial crime. Because of this, banks must avoid accounts from being opened under fake identities. They must need each and every individual who wants to open or expire a bank account for documents to prove their identity (International student theory a UK bank account, n.d)As Newcastle has gained the one of the top most position in the Unit ed Kingdom for further education, therefore the need for the student to open bank accounts to carry out their financial transactions has risen as well. This is because most international students who come to Newcastle are without local bank accounts and in the long run most students need such a facility to work on completing transactions such fees payments, living expense, accommodation and fulfillment of other financial needs. Thus, the banks have recognized the significance of international students as potential customer and it is due to this fact, the banks in Newcastle are aiming to ameliorate their clientele by attracting students to open bank accounts in their respective bank through different marketing strategies and incentives. As a result, numerous bank representatives are seen roaming around in the first week of the academic year in various universities and colleges marketing their benefits to the potential customers. These bank representatives provide students with sele ctive nurture regarding various services and benefits that are offered at their respective banks. They would also provide information regarding the different accounts that can be opened at the banks. The most common type of accounts areDeposit account or basic accountCurrent account pupil accountThe banks also offer a number of facilities to their customer to make their financial transaction more convenient and easier. These facilities includeCash withdrawals useable at Post representationdebit dining table automatic teller machineATM CardDirect DebitOnline BankingTele squall Banking1.1 Research AimsThe basic aim of the research was toFind the cheapest bank account students can open.Compare HSBC, Lloyds Plc, Barclays and NatWest in Newcastle for their international student services. approachability of banks/ATMs indoors the student area of Newcastle.1.2 Research ObjectivesThe objectives of the present research were to appraise the best account type to open for international stud ents. check out the bulk of bank accounts used by international students.Investigate the reason for international students choosing a certain bank to open their bank accounts.Study the geographic locations and ease of access to the banks within the region tropeated to students and their life styles.Study the 4Ps (Product, Price, Promotion, Place) of the banks.Investigate the importance of students as potential customers for the banks.Find out the marketing and management strategies use by the four banks.CHAPTER 2LITERATURE REVIEWThe banks in todays world are trying to attract students to open their accounts at their banks. The reason for this is that the banks think about it in the long term point of view. To them a student is not a student a student is an individual who would have a career some day and this particular individual would be a loyal customer, would pay back his or her overdraft (sometimes with charges), need a loan or a mortgage and so on. Therefore, the information of the student account summed up by the banks, is to facilitate the banking needs of the students who are working towards undergraduates. The basic banking needs that would help students fulfill their financial needs vary from bank to bank as different banks offer different products and services, such as broadsheets, deposit slips and cheques, to its student customer.A small number of researches regarding the subject of bank selection decisive factor of international students in the UK have taken place over the years. Gray (1977) examined student behavior regarding bank services in the UK. He suggested that stratagem was the most vital factor affecting the students choice of bank.Another research by Lewis (1982) study the banking behavior in students studying in the UK. A keep down seek of 716 students in 11 universities and colleges in the Greater Manchester area were inspected for the research. From findings of the study, it was discovered that 92 per cent of students though t they would remain with their current bank until their course holy while 44 per cent considered carrying on with the same bank. Moreover, it was discovered that convenience of site of the bank and its facilities to college was the main factors influencing on students choice of bank.A study by Thwaites and Vere (1995), also taken place in UK, illustrated that nearness of an ATM to the educational institution, free banking service and student offers were the main three reasons used by students in choosing the banks to deal with.The present study was focused on researching the main facilities provided by HSBC, Lloyds plc, Barclays and NatWest in their student account. Furthermore, the researcher also canvas the unneeded facilities provided by each of the bank in the student account. The study helped the researcher get a general overview of the banking facilities provided to international student that were offered by HSBC, Lloyds plc, Barclays and NatWest. Thus, the researcher was a ble to move forward and decide upon the most feasible and the optimum choice of international students regarding the bank and the bank account.The review of the literature was mainly focused upon the products and services offered by the four banks HSBC, Lloyds plc, Barclays and NatWest to international students. Furthermore, the extra facilities that differentiated one bank from the other were also thoroughly analyse in the literature review.National Westminster Bank Plc or generally know as NatWest is a part Europes second largest bank, the Royal Bank of Scotland Group. In order to make the students financial transactions convenient and easier, NatWest has fifty volt branches in the countrys largest universities. Moreover, NatWest also has 1650 branches that are more than any of the commercial banks in the country. To benefit the students who come to study in the United Kingdom from overseas, NatWest has offered a Blue International cast that charges a fee of 6.95 pounds month ly. This account facilitates international students by offering them an International Student Identity Card (ISIC) which enables the full time students more than 40,000 travel, online and lifestyle discounts within the region and abroad. Furthermore, the Blue International Account provides with a useful guide that contains information on banking in the UK and advice on how to manage finances as a student. The guide is lendable in 5 different languages. NatWest has also made tape transport of coin in hand for students easier as now they can easily go through money from their retention country and pay their bill online. Moreover, the bank also offers both online and bid banking to international students to keep a check of their finances during any part of the day. NatWest also offers the students mobile phone top-up facility along with mobile phone banking and text alerts regarding the finances. Another significant aspect of Blue International Account is insurance which allows students to insure mobile phone and other gadgets. Also, the bank offers the students an orangish SIM card for the mobile that dials to more than 50 countries for 5p per minute. NatWest also provides it student customers with discounts like saving 1/3 on rail fares if the students age ranges betwixt 16 and 25 all the way through Great Britain for a whole year. Also, if the tickets are booked through the NatWest Box Office, then students aim a 25% discount on tickets to the plays, concerts and other events (Advantage Blue International student option 2010).The worlds local bank, HSBCs international network comprises of over 9800 offices in 77 countries along with 59,000 Link ATMs in the United Kingdom (HSBC liberty chit 2010). The bank offers a dedicated package known as the passport Account for international students with 24 hours access to their money but with no quote or draft facilities. Students holding a passport account at HSBC are charged 6 pounds a month for a period of 12 months after which renewal of the account is mandatory (HSBC recommendation 2010). The bank further provides passport holders with a Western Union aureate Card on which the students can earn points and make saving on transaction fees when sending money bank home. Also students can slang a discount of 4 pounds on international money transfer fee. The Passport Account at HSBC also offers its students customers with both internet and address banking. Moreover, the bank provides the students with Maestro Debit card and Direct Debit or standing orders and access to saving accounts with high interest (Comparison of banking facilities offered in Oxford by the major banks 2009). There is a special UK relocation service offered by the bank with relocation advice in eight different languages. The students can also receive a UK SIM card with 10 pounds of free credit along with low cost international calls. International students can also open a Basic Account at HSBC which is easy to comprehend and administer. The benefits of opening a Basic Account are that firstly, students can check balances, get statements and make withdrawals of up to 200 pounds with their basic bank account card at HSBC bank cash machines in UK. Secondly, students can also access up to 200 pounds per day over Post Office counters with basic bank account card and PIN numbers. Regular bills can be paid standing orders and direct debits can be set up on the account. Also students can enjoy free internet and telephone banking (HSBC Passport 2010).The Lloyds TSB Group is a renowned UK-based financial service arranging that offers complete banking and financial services in both United Kingdom and abroad. There are thirteen branches of Lloyds within the designated area for international students within Newcastle (Student Account 2010). There is a variety of Lloyds TSB student accounts to select from, depending on the requirements and situations. It has the most number of accounts available to of fer to international students for free and stripped of 7.95 pounds monthly is charged for silver account and accounts such as gold have a higher fee rate with more facilities (Student Account 2010). The Lloyds Student Account has been presented with 5 Star Rating by Defaqto for its great variety of attributes and advantages. There are three types of student accounts that students can choose from at Lloyds (Student Account 2010). Firstly, the Student Account offers a Debit Card and a Master Card. Also it provides with a free NUS Extra card and a years free mobile phone insurance. The students can receive up to 75 pounds cashback and free music downloads while using the Lloyds Student Bank Account. The facilities of internet banking, phone bank and free text alerts is also offered along with the benefit of saving the change in which surplus cash is moved into a nest egg account each month (Comparison of banking facilities offered in Oxford by the major banks 2009). Another type of student account offered is the Islamic Student Account which carries the same benefits as the Student Account but with the guarantee that the money will be held in reserve in accordance with Shariah (Islamic Law). Moreover, the student is given the option to utilize other non-Shariah benefits if they wish. The third type of bank account offered to students is the Graduate Account which receives a Classic credit card with at least 500 credit limit. The facility of internet banking is also provided and commission-free travel money is given as well (Student Account 2010).Barclays is one of the worlds top most banks. Their status has been created on over 300 years of services. Barclays is an international bank with its branches in more than 60 countries. Barclays offers an International Student Account known as the iBank Student that can be opened before arriving in United Kingdom (iBank Student and foreign student bank accounts with Barclays Wealth International 2010). iBank Student i s offered for a small monthly charge of 5 and a opening balance of 1,000. The iBank Student account is an international account also available in sterling, US dollar and euro. The VISA debit card can be connected in sterling and is accepted in 22 million locations around the world (iBank Student and foreign student bank accounts with Barclays Wealth International 2010). Students can also receive discounts up to 25% on Hewlett Packard laptops, desktops and accessories. The account offers easy access and a nest egg account in which funds can be deposited and withdrawn whenever the customer wishes. The savings account can also be opened to earn higher interest by the student (Comparison of banking facilities offered in Oxford by the major banks 2009). The student can also gain access to complete collection of savings and investments or balances of 10,000 or more. International telephone and online banking is available 24 hours to operate money in diverse currencies and time zones. The bank also offers expert advice from our mortgage advisers to help the student or his or her parents to buy property in UK (iBank Student and foreign student bank accounts with Barclays Wealth International 2010).The literature review on the different services offered by HSBC, Lloyds TSB, Barclays and NatWest indicated that all of the banks provide students with the basic services that are required to fulfill the financial transactions, however, the Student Account product is structured in various ways, in accordance with the style, strategy and control affairs of each bank.CHAPTER 3 methodology3.1 SampleThe present study was an investigation into student banking arrangements at four major banks- HSBC, Lloyds plc, Barclays and NatWest- in the Newcastle area, and recommendations as to which provided the best services to international students. A exemplification of 100 subjects, including both males and females, ranging from the ages of 18 to 28 years, was drawn from different areas in Newcastle, United Kingdom. All the subjects were international students belonging to Newcastle university dormitories, Northumbria dormitories and Newcastle college campus in Newcastle. Another taste of 40 subjects, both males and females, was drawn from bank personnel of HSBC, Lloyds plc, Barclays and NatWest. 10 employees from each bank were drawn as a sample. Further information from both international students and bank personnel was garnered regarding age, gender, education, accommodation, etc.3.2 sample StrategyThe sampling strategy employed in the research was secernate hit-or-miss Sampling. Stratified Random Sampling also referred as comparativeorquotarandom sampling, is separating the population into uniform subgroups and then drawing a simple random sample from each subgroup (Trochim, 2006).The reason for employing Stratified Random Sampling was that it enabled the researcher to draw a sample of international students from the total population and then draw a rando m sample among the international students to administer the questionnaire. Same was the case with the questionnaire from the banking personnel.For the present study, both primary and petty(a) researches were carried out. The use of both primary and secondary researches enabled the researcher to not only gather facts and figures about the products and services the different banks offered but it allowed analysis of the arrangements that the banks offered to international students through these products and services.3.3 Primary Research3.3.1 Questionnaire for StudentsA questionnaire was distributed among international students of Newcastle to find out which of the bank accounts was used most by the students. The questionnaire also had questions concerned with wherefore the students chose a certain bank among HSBC, Lloyds plc, Barclays and NatWest and what features of that bank attracted them the most. There were questions knowing to investigate the geographic locations and ease of access to these banks within the region designated to students and their life styles.The questionnaire was shared out into three sections. The first section dealt with gathering the information regarding the student respondent. This section included questions on age, gender, and educational level, how the student was funding his/her education, his/her tuition fee, maintenance cost, etc.The second section of the questionnaire was designed to gain an insight in the respondents history of banking. This section included questions on the number of accounts the student held previously and the type of account he/she held.The next section that is the last section was regarding the respondents experience of banking in Newcastle with the four banks HSBC, Lloyds plc, Barclays and NatWest. The questions in this section also dealt with the importance of different offered services to the respondent, factors that were involved in the students choosing a certain bank. Furthermore, questions on co mparison of the four banks in Newcastle that is, HSBC, Lloyds plc, Barclays and NatWest on the difference of the services and the type of accounts the respondent held at these banks were also included.3.3.2 Questionnaire for Bank PersonnelAnother questionnaire was designed to gather entropy from the bank personnel of HSBC, Lloyds plc, Barclays and NatWest. These questions were related to how important potential student customers were to their organization. Furthermore, the questions also investigated the management and marketing strategies these banks used.This questionnaire was also divided into three sections. The first section of the questionnaire was designed to provide a profile of the bank employee who responded to the survey. Questions on age, gender, the bank they were currently working for and their designation at the bank were included.The next section was regarding the importance of students as customers to these banks. In this section, the banking personnel were asked q uestions regarding whether it was important to have students as their customers, the type of accounts held by the students, why the students chose their bank over their competitors and the significance of different types of services offered at their banks.The third section was related to the marketing strategies, that is, the 4Ps that the banks used to attract students. This section included questions on the product, price, progress and place of the products and services offered to the international students.3.3.3 Consent LetterAll the participants in the study were given a consent letter, which gave them the right to withdraw any information at any stage of the research. Also the authority and confidentiality of the pile was confirmed3.3.4 Cover LetterA cover letter was abandoned to both the questionnaires which explained the aims and objectives of the research to the respondents. It gave information about the time that the questionnaire would take to complete. Furthermore, it e xplained the retirement and the confidentiality of the information gathered. .3.4 Secondary ResearchSecondary research was also employed in the present study. The purpose for this was to gather data regarding each bank from internet, books, articles and international account handbooks. The use of secondary research enabled the researcher to gather information regarding the various products and services offered to international students by these banks. Furthermore, it also raise the level of objectivity involved in the research as the data was gathered from other sources.3.5 Research DesignA comparative research design was employed in the study. A comparative research design evaluates two or more groups on one variable (McMillan 1991). This was employed because the research is an investigation in to student banking arrangements at four major banks in the Newcastle area, and recommendations as to which provide the best services to international students (HSBC, Lloyds plc, Barclays a nd NatWest). Thus, it was a comparison of the four banks as to which offered the best and the cheapest services to international students.3.6 mappingIn order investigate into student banking arrangements at four major banks- HSBC, Lloyds plc, Barclays and NatWest- in the Newcastle area, and recommendations as to which provided the best services to international students, a sample of 100 subjects, ranging from the ages of 18 to 28 years, was drawn from Newcastle, United Kingdom. All the subjects were international students belonging to Newcastle university dormitories, Northumbria dormitories and Newcastle college campus in Newcastle. Another sample of 40 subjects was drawn from bank personnel of HSBC, Lloyds plc, Barclays and NatWest. A comparative research design was employed in the research which is aimed the comparison of two or more groups on one variable (McMillan 1991). Stratified random sampling was used. First of all written permission was taken from the heads of educationa l institutions and the banks. They were briefed about the research, its significance, time involved and the procedure. Furthermore, the sample population was informed and consent forms were distributed. Also the authority and confidentiality of the people was confirmed. idiosyncratic examen was carried out. One time approach to the participants was used for data collection. The subjects were administered the questionnaires. The testing e