Marketing Financial Services: Global Banks Interest on Expats Population - Essay Example

Marketing Financial Services: Global Banks’ Interest on Expats Population Global Banks’ Interest on Expats Population In the present day context, the expats’ population is growing at a steady rate. According to the 2009 Expat Economics report, it was postulated that wealth in the form of earnings of expats has been moving to East i.e. Middle East and Asia at a larger percentage from Western nations. Moreover, the report reveals that investments amongst expats significantly remain positive. It was further identified that savings of expats have been more since moving abroad while very few debt on the other hand. In addition to this, the report also highlighted that virtually two-third of the expats have more disposable income in their host country than in their home country. At the same time, it is been identified that expats tend to use a variety of channels for saving and investing large proportion of their wealth in the current financial environment. Due to the higher earnings, expats are investing considerable proportion of their capital in real estates and equities. This is because the expats probably view long-term investment opportunities as a safer option particularly during the time of economic uncertainties (HSBC Bank International Limited, 2010). Similar findings were accumulated by the 2012 Expat Explorer Survey, which reveals that expats have reacted to global economic downturn by changing their saving and outlay patterns. Moreover, the survey findings also identified that expats currently are interested in longer term investments (HSBC Bank International Limited, 2012). Moreover, it is recognised that expats often need to confront with various problems related with wealth management, banking and currency management. Hence, expats have become one of the potential customers for global banks for attracting them towards their numerous services in turn enjoying the benefits of having large customer base while simultaneously helping expats to effectively deal with these problems. Global banks view expats as their target customers for increasing customer base and revenue. The global banks with their services, such as services related with tax obligation intend to provide valuable guidance to expats to make their life easier in a new country and seek greater profitability out of the services rendered by the banks to expats’ population. As stated earlier, expats have generally high salaries as well as they are confronted with many financial challenges, in such cases global banks intend to lure the savings of expats towards the banks with their numerous products and services to enhance their overall profitability and enlarge their customer base. It is worth mentioning that it is often very difficult for expats to open bank accounts in a new country (Telegraph Media Group Limited, 2013). Thus, the global banks are currently engaged in resolving the problems faced by the expats in the host country concerning the opening of a bank account and their wealth management. Furthermore, the global banks are considerably engaged in helping expats to prepare for life in the new country and simultaneously attract them towards the various services introduced by the global banks particularly for expats’ populaces. Moreover, the growing earnings of the expats have also attracted global banks to frame their strategies and offer services in order to maximise their share of profitability and extend their service areas by effectively meeting the wide range of expats’ needs and wants (HSBC Bank International Limited, 2012). Another primary reason for global banks growing interest on expats’ population is the fact that expats extensively deal with foreign currency. Often expats convert one currency into another or transfer the currency of their living country to their home country. Contextually, it facilitates global banks to avail the benefits from these activities by rendering facilities such as easy money transfer and currency convertibility services to expats (HSBC Bank International Limited, 2013). Moreover, expats are also engaged in making considerable investments in various financial tools. Thus, in order to avail the opportunities from the investments made by expats and gain substantial benefits from their investments, global banks are currently attracted by expats’ population. Thus, the potential prospects are related with expats’ population for banks to increase their profitability and customer base with their various products and services which has resulted in expats’ being of interest to a global bank in the current global financial scenario. Expats Living in Hong Kong and Singapore and Their Interest in Financial Services Moving to Hong Kong is often viewed as a daunting and an exciting experience. Essentially, Hong Kong is evolving as a major international centre as well as it is transforming into an important trade and cultural hub. Despite the global financial crisis, the Hong Kong Dollar remained stronger than many other currencies of the world (ExpatInfoDesk International Limited, 2013). In the recent times, Hong Kong has emerged as one of the favourite destinations for expats’ population. This is due to the low level of taxation and higher standard of living that have drawn expats’ from around the world to become an important part of the country’s population. Moreover, it can also be viewed that Hong Kong offers wide employment prospects for expats’ population especially in the fields of finance, information technology (IT) and logistics (The British United Provident Association Limited, 2013). The graduate expats from Western nations having potential professional qualifications and knowledge in law and accountancy are relatively in greater demand and also possess the highest possibilities of securing work within the foreign country. It is important to note that Hong Kong does not entail withholding of employment income, thus taxpayers have to pay tax on lump-sum basis as opposed to monthly income basis (InterNations GmbH, n. d.). On the other hand, Singapore is considered to be one of the best places to live in by many people. Moreover, Singapore is Asia’s one of the most imperative trade and finance locations. At the same time, Singapore ranks fifth wealthiest country of the world according to the Gross Domestic Product (GDP) status. Moreover, the country is also the fourth largest foreign exchange trading centre in the world. Due to these facts, expats from all around the world move to the country in large numbers on an annual basis (ExpatInfoDesk International Limited, 2013). Singapore offers expats with among the easiest ways to get acquainted with safe and modern environment. Additionally, Singapore also offers progressive atmosphere to raise family due to the availability of high quality education facilities, strong security means and low priced homes where expats can find easier for bringing up their children. Healthcare facilities are also high quality indeed. Moreover, the country offers a wide range of opportunities for those highly educated expats with strong experiences. A number of significant opportunities are available in finance and banking sector of the country. Additionally, opportunities also exist in IT, shipping and electronics industries. It is worth mentioning that tax regulations are quite stringent in Singapore as compared to Hong Kong (InterNations GmbH, n. d.). Expats moving to Hong Kong and Singapore need not have to worry about their wealth management. There are several banks offering financial services to Expats in Hong Kong and Singapore. These services may include: Saving and current accounts, Time deposit accounts Foreign currency accounts Standing orders Money transfer Credit Current exchange Direct debits Investment advice Insurance services Source: (HSBC Bank International Limited, 2013) In addition to above stated services provided by banks in Hong Kong and Singapore, telephone banking and internet banking are also common services offered by banks to expats in these countries. Almost all the services stated above have potential advantages to expats. These services have been introduced while keeping in consideration the needs and the wants of expats living in Hong Kong and Singapore. Moreover, both Hong Kong and Singapore have been emerging as among the favourite destinations for expats because they are handsomely being paid for their services in these nations. Moreover, due to the healthy wages and salaries, expats have greater disposable income for investment and saving. However, expats are often faced with the problem of investment. Contextually, expats are unable to make best investment decisions in Hong Kong and Singapore. Thus, they are in need for investment advices so that they could profitably channelize their earnings as well as savings in order to secure better future for themselves and their families. Hence, the financial institutions should understand the need for expats investment decisions and provide them with valuable advices on their investments. Moreover, the services provided by financial institutions in relation to expats’ investments should not only be limited to providing valuable advices but the financial institutions should also convince them to make investments in certain particular investment tools for safeguarding their interest and future with highest possible returns on their investments. Role of Financial Institution (FI) in Assisting in Raising an Expat Family’s Children Moving overseas with children is not always an easy task. It is important to make sure that an expat and his/her family members adapt to new society and country with least effort and time. Many challenges are faced by an expat family while raising their children in an expatriate environment. At the same time, children who accompany their parents in different societies also are confronted with a few of the major challenges to adjust within a new environment (Timberchase Financial, LLC, 2012). According to the Expat Explorer Survey 2012, Hong Kong provides children friendly and safe atmosphere for expat parents to raise their children. However, the survey postulated that the United Kingdom’s (UK) is positioned among the lowest safety nation in terms of raising expats’ children (HSBC Bank International Limited, 2013). Contextually, having an understanding of how much disposable income is available to invest and to save is a crucial factor for consideration; however these aspects are of greater essence for expat families moving to a new society and country. Finance is critically important for every individual either for a native or an expat in order to smoothly meet the requirements of their own as well as their family members. Moreover, expats are often subject to different tax, healthcare and legal systems. Thus, an expat needs to understand how he/she can best avail the opportunities available in the new country for his/her own benefit (Guardian News and Media Limited, 2013). For instance, in this context an illustration of a financial institution i.e. HSBC can be provided. Hong Kong based HSBC operating in Singapore and Hong Kong provides expats with the understanding of their financial goals. Contextually, this financial institution researches the investment opportunities and identifies protection policies available for expats in the country. Furthermore, it recommends solutions according to plan priorities and degree of risks associated with the decision (HSBC Bank International Limited, 2013). Moreover, the financial institution i.e. HSBC helps the expats to effectively cope with the challenges of transferring money as well as making payments across the countries and also to efficiently deal with the risks coupled with currency fluctuations. As far as the raising of children is concerned, it can be stated that providing children quality education in the modern day context is quite an expensive task in abroad. Consequently, many financial advisors consider expat families to effectively plan the future of children as early as possible. Thus, HSBC providers various services and advices to expats relating to opportunities and tax-efficient savings and investments that could help expat families to build up education pot for ensuring the long-term prospects of school and university fees which remain less affected even in the rising inflation scenario (Guardian News and Media Limited, 2013). Contextually, in order to ensure safer life of family and children of an expat, this financial institution provides life insurance services in case any member within the expat family is diagnosed with any serious illness. Moreover, the financial institution also provides facilities to increase or reduce the expat life insurance cover as well as the term of the policy. Thus, financial institutions such as HSBC significantly facilitates expats with flexible system of life insurance policy and adequately guarantees expat parents to care and raise their children even in expensive and unfavourable situations. Implications of Expats’ Experiences in Europe for Financial Services In the recent times, expats living in Europe have been severely affected by the global economic downturn. Satisfaction of Expats within Eurozone nations has not been much impressive in the recent past. However, despite the poor performance of the European economies, expats in these nations have long-term mindset and at the same time they are willing to effectively cope with the problem of economic fluctuation (HSBC Bank International Limited, 2012). Contextually, expats in Europe have significantly altered their pattern of saving and investment. Nearly a quarter of the expats’ population have made investments on real estates. The financial crisis witnessed by Eurozone considerably contributed towards the alternation of investment patterns of the expats’ population. Currently, 37% of the expats’ population in France has made investments in long-term prospect (i.e. real estates) while it was only 29% during the time of their first relocation. Similar trends were also identified in the UK, Italy, Germany and Spain. The changes in the investment patterns were up from 10% to 18% in the UK, 23% to 28% in Italy, 14% to 18% in Germany and 35% to 39% in Spain. The alternation of investment pattern towards real estates has been performed at the expense of cash saving by the expats. Thus, financial institutions in the Eurozone have to face with a reduction in the proportion of cash savings. Contextually, only 17% of expats’ investments are held as cash saving in Spain as compared to 25% after the financial crisis in Europe. The UK also witnessed similar fall in the cash saving proportion. Earlier in the UK, the cash saving percentage of the total investment was calculated as 38% while currently the cash saving percentage has dropped to 30% only (HSBC Bank International Limited, 2012). Due to the growing inflation faced by Expats in Europe, it has resulted in stagnation of the saving accounts in many financial institutions. Moreover, the financial crisis witnessed by Eurozone has transcended expats’ living in Europe with certain interesting challenges and opportunities. The weakening value of Euro due to the financial crisis has dramatically reduced the savings of expats in the form of Euro with financial institutions while on the other hand those expats living in the UK were able to gain certain degree of advantages due to some protection available with Pound Sterling. The falling Euro has resulted in expats diverting their concentration on foreign currency trading through either securing savings or actively participating in the money market (Miran, 2012). At the same time, expats in developing countries are leaving behind the European countries in terms of disposable income provided to them. Consequently, the expats are now preparing themselves to move in Asian countries such as Singapore and Hong Kong. Consequently, financial institutions in Europe are likely to be affected by reduced saving accounts due to the reduction of expats’ population in Eurozone. Moreover, it is been identified that most of the British expats are unwilling to return to the UK. Simultaneously, nearly, 68% of expats in the UK and 48% of expats in France are unhappy with the current state of economic condition prevailing in these countries of Europe (Limited HSBC Bank Vietnam, 2013) The above addressed scenario does not depict a healthy condition for financial institutions operating in Eurozone. The financial services witnessed low trust of expats due to the financial crisis and poor performance of the financial markets. The falling trust has a significant impact on the financial institutions operating in Europe. This situation has led to a significant fall in the revenue of financial institutions and their revenue generation capability (Social Market Foundation, 2011). Thus, financial institutions should introduce certain effective investment schemes and provide expats valuable advices so that their confidence continues to flourish on financial institutions in Europe. Table of Contents Marketing Financial Services: Global Banks’ Interest on Expats Population 1 Expats Living in Hong Kong and Singapore and Their Interest in Financial Services 3 Role of Financial Institution (FI) in Assisting in Raising an Expat Family’s Children 6 Implications of Expats’ Experiences in Europe for Financial Services 9 References 12 References ExpatInfoDesk International Limited, 2013. Moving to Hong Kong. Expat’s Manual. [Online] Available at: http://www.expatinfodesk.com/expat-guide/deciding-on-the-right-country/top-expatriate-destinations/hong-kong/ [Accessed January 30, 2013]. Guardian News and Media Limited, 2013. Expat Family Challenges. Expat Guide to Finance. 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