Reasons Why Expats Could Be of Interest to a Global Bank - Essay Example

CASE STUDY OF MARKETING FINANCIAL SERVICES: EXPATRIATES By 10th, January, Case Study of Marketing FinancialServices: Expatriates Introduction The case study Expatriates focused on HBSC expat research that was conducted in 2008 and aimed at identifying the most preferred countries by the expatriates as well as the aspects that affect the life of expats in the different countries. The essay will focus on why expats are of interest to a global bank, the research design used in HBSC 2008 expatriates research, and the role of financial institution in assisting an expat family with high cost of raising children. Moreover, the implications of expats experiences in Europe for financial services will be discussed. Reasons why Expats could be of Interest to a Global Bank Expats or expatriates are individuals who have left their own country and moved abroad or into another country to reside there, usually for a long period. Over the last few decades, the number of expats across the globe has grown dramatically. This has led to increased need of special banking services to meet the needs of the expats. This is because expats often travel across the globe and thus carry out transactions in different countries. Therefore, most expats may opt for global banks with numerous branches in different countries while others will have different accounts in different countries, which they frequently visit (Jillian 2009; Ching-Hsiang & Hung-Wen 2008). Expatriates are a potentially valuable customer segment that global banks should focus on. This is because this group has special financial needs such as banking. These needs require a different approach from the ones used to deal with issues affecting individuals using banking services within their country (Business Editors 2003; H, W. 2005). For a global bank, it is important to understand the difference in negotiations that characterize the different cultures of the expatriate. This will enable the banks to get the best out of the expats (Richardson & McKenna 2006; Gallagher, 1995). Moreover, expats are a great source of income for global banks since most of them work with the intention of saving. Therefore, the global banks must be able to identify and meet the needs of the expats. Expatriates who operate across different nations often prefer banks that are able to offer exclusive services such as cheap money transfer across the globe (Shelter Offshore 2011; Pavone 2013). There are several reasons why banks consider expats to be of great importance. One reason is the cultural diversity of the expats. This is important since global banks wanting to attract expats must be able to understand the different financial need of expats from different cultures and meet them (Jillian 2009; Selmer, 1999). Expatriates live quite a complicated life. Most expats consider the right banking arrangement as one of the most important aspect while relocating. When looking for an appropriate bank, expatriates consider factors such as the flexibility of the bank in terms of the ease of accessing and transferring funds between countries. The other factor that is important to expatriates is the financial security. Therefore, global banks willing to attract expatriates must comply with international financial regulations. Moreover, solid capital base is crucial since expatriates are on the performance of the banks they choose to invest in (World Bank 2006; Pavone 2013). Most expatriates will invest in banks that have accounts that provide money in varying currencies. This will enable the expatriates transact business across different countries. Expatriates prefer banks that have enhanced international payments since it becomes easy to send money oversees in addition to making payments such as mortgages (Selmer, 1999). Another important factor that global banks dealing with expatriates should consider is availability of debit and credit cards. The cards are preferable if they are available in varying currencies such as sterling, euro, and US dollar. This makes it easy for expatriates to makes purchases in different countries across the globe. Another important feature that global banks should have is international mortgage services. When expatriates move to different countries, some choose to buy homes and settle with their families. Additionally, other expatriates may opt to purchase mortgage in their country of origin without having to send money. Banks in regions such as UK and US often have international mortgage services (Pavone 2013; Jillian 2009). Another reason why global banks might consider expatriates important is their ability to aid in growth of the bank. Most expatriate have large amounts of money and often prefer to operate with a single bank. Therefore, having numerous expatriates can help a bank grow rapidly. A bank can encourage expatriates by offering services such as offshore banking that enables expatriates to carry out transactions from different regions across the globe (Shen & Kram 2011). Another reason why expatriates are of importance to a global bank is that they encourage banks to focus on improving the quality of their services to meet the needs of people from different cultures. This is crucial since global banks operate across different cultures. Expatriates comprise a group that is potentially affluent potential. Therefore, financial institutions should find it important to collaborate with professionals from other fields such as those dealing with taxation to ensure that they are able to create packages that meet the needs of expatriates. The special needs that expatriates should attempt to meet include accommodation, concierge services, as well as the needs of the children such as financing their education (Woods 2003). Research Design and Sampling HSBC Bank International Expat explorer surveys are the most inclusive and diverse expats survey. Additionally, the survey stands out as the most popular expat campaign. The 2008 expatriate survey involved 2,155 expats who were drawn from four continents. The survey focused on the challenges faced by expatriates. The survey was conducted virtually and focused on different issues that relate to expatriates and include lifestyle, earning capacity, ability of expats to be integrated into host communities and the issues that affect the children of expatriates. The research design enabled the researchers to analyses large quantities of data by comparing data from expatriates from different countries. The information obtained was first hand since it was obtained from the people who have been foreigners in the 48 countries covered by the research. The research was conducted from April to June, which allowed the participants enough time to participate in the research (Jillian 2009). The research sample was not fully representative since the study sample was drawn from 48 countries. Moreover, the findings from countries with less than 30 respondents were not included in the final findings. However, the research was the first most representative research on expatriates. Moreover, the research provided fascinating and crucial insights since it covered all the aspects regarding expatriate lives. The findings were important and useful to different institutions particularly those dealing with financial transactions. Moreover, the survey demonstrated that the researchers, HSBC, understood the needs of the expatriates (Jillian 2009). The sample was compiled virtually. HSBC uses different social networks such as Facebook and Twitter to inform expatriates of the survey. The participants were only required to be persons residing in other countries other than their own especially those who have resided for a longer period (ExpatExpert.com 2008). The results provided are visual since they include graphs and charts. Other ways used to present the research findings include league tables, which allow easy comparison of different countries. Moreover, the data is followed by explanations that enable the leader comprehend the research findings. The findings were organized in different tables. The expat earning potential was presented in the expat economics table. The quality of life findings were presented in expert experience league table while the findings on the most preferred places to raise family were presented in raising family abroad league table (Jillian 2009). The findings showed that expatriates provide global financial institutions with a rare opportunity to assess their financial services and improve on them (HBSC 2012). Financial Services Expatriates living in Hong Kong and Singapore might need Over the recent past, Asian countries such as Singapore and Hong Kong have become important destinations for expatriates seeking for opportunities to expand their financial potential. This is because the countries in this region have been experiencing rapid economic growth. Singapore and Hong Kong are amongst the major countries that most expatriates in Asia live. The two countries have been in competition in attracting expats. Moreover, the two countries are amongst the most important financial centers and attract some of the most competent workers from across the globe. Since most expats prefer to work and save, there is high demand for different financial services (Wassener 2012). Most of expatriates are undecided on whether to settle fully and whether to buy property. Therefore, expatriates living in different regions of the world require financial advice on how to spend their money. Moreover, most are unfamiliar with the price of properties and may require financial institutions that can advise them on places where they can buy property (Pavone 2013; Jillian 2009). Some of the worries of expatriate are the security of their assets and the accessibility of daily banking operations. Moreover, expats require tax planning assistance and ways of managing and increasing their investments. Most expatriates who move to Singapore earn considerably high salaries such that they are able to save and enjoy high quality accommodation as well as high level of luxurious living (Shen 2010; Selmer 2000). On the other hand, expatriates in Hong Kong earn the highest salaries amongst all the countries from which the research was conducted. About half of the participants from Hong Kong earned over 100,000 Euros. Therefore, the expatriates greatly require financial services that enable them save their money and earn interest. Since some expatriates would prefer depositing their money in accounts within their home country, expatriates in Hong Kong may require internet-driven financial services (Nuno 2009). This indicates that the expatriates would greatly require financial services. Living in Hong Kong is quitting exciting but can also be daunting. Hong is characterized by expatriates who conduct international financial transaction and is considered an international financial center. Moreover, Hong Kong is an international holiday destination and some expatriates visit the country for leisure purposes. The country in characterized by numerous financial institutions, large industrial factories, Multinational businesses and several entertainment centers where most expatriates spend quite a large fortune of the large salaries they earn (Jillian 2009). Moreover, the Hong Kong Stock Exchange is one of the best performing in the world and expatriates are willing to invest in the financial market. The Hong Kong Dollar is closely associated to the US dollar, which makes it easy for expatriates from countries using US dollar to transact businesses (Clifford 2002). Most of the expatriates in Hong Kong are from Europe. The main factors attracting expatriates to Hong Kong is the reduced taxation and the high standards of living. Other financial services that expatriate in Hong Kong may require include offshore banking services, offshore retirement pensions, trading platforms and help on how to conduct offshore banking. Moreover, expatriates would require taxation planning services and advice regarding offshore fixed term deposits (Jillian 2009). Singapore offers expats the opportunity to enjoy trading opportunities. Although the cost of living is quite high in Singapore, the expats enjoy high quality accommodation. Moreover, they are able to access affordable and high quality education in addition to other services such as healthcare and home services. Moreover, the cost of products such as food is relatively cheap. Therefore, financial institutions in Singapore should focus on enhancing the above services. This will enable them attract more expatriates to invest in (Woods 2003). Expatriates in Singapore prefer, saving some of their fortune, spend some in obtaining accommodation, and enjoy luxurious living. Therefore, expatriates in Singapore are likely to consider buying property and would need financial services that offer mortgages at appropriate costs. The expatriates are likely to worry on the safety of their property especially if they have not been in the host country for a long period. Therefore, financial services that ensure the security of property such as insurance services are important. This is because the Asian continents is often faced by terrorism activities and frauds are likely occur (Selmer 2000). Therefore, financial institution that expats can entrust their property are crucial. Another possible financial requirement for expatriates in Singapore would be a financial institution that allows them to carry out their daily financial transactions conveniently. Expatriates in Singapore enjoy a lot of leisure and are likely to make payment to different companies and businesses. They thus require financial institutions such as banks that are easy to deal with. Moreover, the banks should be able to provide multicurrency personal banking services. Additionally, most expatriates would consider services such as online banking and telephone banking services crucial (Jillian 2009; Shen 2010). Another important aspect that expatriates in Singapore would consider important is optimal tax plans. Expats are often eligible for certain tax benefits. However, most lack knowledge regarding the benefits and would appreciate working with financial institutions that provide information on tax laws and other taxation information relating to their mother country as well as the host country. Therefore, financial institutions in dealing with expats should offer international tax consultancy (Pavone 2013; Jillian 2009). Most expats in Singapore consider accommodation crucial. Therefore, estate planning is significant to them. Therefore, they would need financial assistance on international trusts and estate planning. Expatriates in Singapore could be willing to invest and enjoy the benefits of the thriving economy. Therefore, they may need financial assistance on how to manage and increase their investments (HSBC 2011; Woods 2003). How FI can assist an Expat family with High Cost of Raising Children Some time back, expatriates had a quality life and most of them did not have to pay taxes. However, the cost of being an expatriate is increasing as features such as compulsory payment of taxes characterize it. Therefore, being an expatriate can be challenging especially if the cost of living in the host country is higher compared to ones country of origin. The challenge is even worse when the expat is living with the children due to the high cost of raising children in some host countries. However, financial institutions can play a key role in aiding the expatriates in meeting the needs of their children (Burton 2008; Mäkelä, Känsälä, & Suutari 2011). However, financial institutions are increasingly assisting expatriates in meeting their needs. One of the major needs is bringing up children. The expatriates are required to pay for their children expenses such as education fees. Financial institutions can help expatriates in different ways to enable them care for their children (ExpatExpert.com 2008). One way is through offering insurance covers for the children’s education, health, and wellbeing. Another way that financial institutions can help expats in bringing up their children is through loans. In most countries, expatriates cannot benefit from government loans that are offered to students. Therefore, financial institutions such as banks can offer loans at considerable loans to enable the expatriates pay for their children’s fees. Therefore, financial institutions should provide financial advice to the expats on how they can obtain loans (Burton 2008; ExpatExpert.com 2008; By 1998). Another requirement for the expatriate with children would be comfortable cars that can suit the needs of the family. Moreover, the expatriates will require a home for the family. Getting a good home in a foreign country can be hard. Therefore, financial institutions can provide mortgages for expatriates. Moreover, affordable loans would help the expatriates to them purchase important assets such as cars. Brokers, who are considered part of financial institutions can aid expatriates in obtaining loan. This is because the expatriates may not be eligible for some types of loans. Therefore, brokers can approve the applications by using credit history the expatriate had from their country of origin (Pavone 2013; Burton 2008). The Implications of Expats Experiences in Europe for Financial Services Expatriates experiences demonstrate the economic opportunities in different countries. Moreover, they depict the environment for bringing up children and transacting business that are provided by different countries. Moreover, the implications determine the financial services that require to be invented as well as the improvements that require to be made on the existing financial services. The expats experiences in Europe showed that expats in Europe are willing to learn the languages used in the host countries. This is important to the financial institutions since it means that the service providers can be able to communicate effectively with the expatriates. This reduces the need for financial institutions to train different languages to their employees (HBSC 2012; Jillian 2009; International Money Marketing 2003). Expatriate experiences from expats from France and Spain, which are European countries, showed that they are willing to purchase property. This implies that financial institutions in Europe should focus on developing expatriate programs that focus on easing the process of property acquisition. Moreover, financial institutions should aim at offering financial advice to the expatriates to ensure that they are able to purchase qualitative property. The expatriate’s experiences are important and affect the financial services. The implications are likely to influence the future programs that financial institutions will implement in future. Moreover, the implications are likely to influence the future of financial services in Europe since that will determine the institutions that will invest in this region (Jillian 2009; Opiela 2003). One of the implications of the expatriates experience is that the expats have special needs that require to be addressed differently. There is thus need for financial institutions to develop programs that takes into consideration the needs of the expatriates in addition to being able to support the objectives of the financial institution (HSBC 2011; Jillian 2009). Conclusion Expatriates are a segment of customers that have great potential of increasing the profits of a financial institution. However, expatriates have special needs since they operate across different countries. Expatriates consider different factors while deciding on the banks to invest in. Expatriates usually have unique banking needs that require to be met. Therefore, banks wanting to attract expats should focus on developing programs that benefit the expatriates. However, the banks should still meet its objective. HBSC survey, which was done virtually, focused on the factors regarding the lives of expatriates such as earnings, ease of integration into the community, the lives of their children. The survey demonstrated the increasing need for financial institutions to develop special financial programs as well as banking services for expatriates. Expatriates experiences demonstrate the economic opportunities in different countries. Moreover, they depict the environment for bringing up children and transacting business that are provided by different countries. Over the recent past, Asian countries such as Singapore and Hong Kong have become important destinations for expatriates seeking for opportunities to expand their financial potential. Since most expatriates in Hong Kong are there to make money, financial services should aim at aiding them in making investments and securing their assets appropriately. In Singapore, expats are likely to buy property and require assistance on mortgages. Moreover, Expats in Singapore require flexible financial services. Works Cited Burton, A 2008, HSBC Bank International Expat Explorer Survey 0,. 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