More than Supervision: Identifying Opportunistic Bank Behavior through Marketing Tools

Banking literature looks at analysis of advertising in banks primarily from the perspective of interaction between banks and their customers. At the same time, the problems of interactions between some banks and their customers may pose challenges and result in a crisis of confidence in the entire banking system. Problems arising in relationships between banks and their customers may be accompanied by customer runs on banks within a banking system, which may often occur in emerging economies. In Russia, runs frequently are caused by the revocation of bank licenses. Most of these banks with revoked licenses were aggressive in the consumer lending market and in attracting retail deposits. These banks sought to achieve individual results and disregarded the consequences for the entire banking sector, and as such, demonstrated opportunistic behavior. Given the prevalence of such tendencies in emerging economies, central banks should supervise banks in order to identify such behaviour at its early stages. This requires closer attention be paid by central banks to the marketing policies pursued by banks. The proposed model allows supervisory authorities to measure the quality of bank marketing activity, detect opportunistic behavior at its early stage and increase confidence in the banking system. The proposed methodology aims to improve the quality of regulating the entire banking market, as well as the instruments used in the assessment of the banking services market.