Business strategy in student banking - Essay Example

Another 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 open 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 population who has the likelihood of earning a larger income than any other section of the population.

As stated by Duncan, Smeeding & Rodgers (1992), only individuals 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 paid 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 skill to build up an existence in the student market through suitable attainment and maintenance strategies is thus expected to have an effect on banks’ future market share and revenue (Thwaites & Vere, 1995).

International students signify as a significant market for financial institutions such as banks. The skill to value, comprehend and deal with the precise needs of this segment section of the population is now a vital market reality (Cicic, Brkic, & Agic, n.d). Bankers can no longer maintain their conventional belief that only business.