Banking Terms for Bank Exams


1. M&A: In the era of globalisation of business, M&A means mergers and acquisitions. Merger means 2 companies merging to form a new identity while acquisitions mean one company acquiring management control of another company.

2. Marketing: The process of planning and executing the concepts, pricing, promotion and distribution of ideas/goods/services to satisfy individuals/organisational goals is called marketing.

3. 4P’s of Marketing: 4P’s of Marketing are Promotion, Product, Price and Place.

4. Marketing concept: Marketing is the combination of independent activities that are to be carried out by a seller to ensure that the exchange process is smooth, trouble-free and satisfying to all parties involved in the transaction. Marketing concept evolves out of the desire first to identify human wants and needs and then to satisfy them. The modern concept of marketing focuses totally on the consumer.

Types of marketing concepts:

  • Production oriented concept focusing on production.
  • Product oriented concept focusing on the product.
  • Marketing oriented concept focusing on the customer.
  • Selling oriented concept focusing on sales
  • Management oriented concept that focuses on the integration of all business functions with ‘marketing’ as the fulcrum.
  • Social oriented concept focusing on using marketing techniques on issues of social concern.
  • Green oriented concept focusing on the promotion of eco-friendly products.

5. Marketing Environment: It can be defined as those factors that are outside the control of the marketing management function. It can be both micro and macro. Micro marketing environment refers to those forces that are close to company such as internal environment of the company (employees, departments, unions), vendors, customers, competitors, distributors. Macro marketing environment refers to those factors that are part of the larger society/economy such as demographic, socio-cultural, economic technological, natural, legal, political etc. It can impact the micro marketing environment of a company.

6. Marketing Information: Marketing Information means information about customer needs, competitor activities and pricing, competitors’ product portfolio, customer perceptions about the bank’s products & services, market share.

7. Marketing Plan/Marketing strategy: A marketing plan is necessary for success in promoting a bank’s product, establishing goals, focusing on crucial activities for growing the business, establishing new markets and developing new products. It is a plan that nurtures existing customers, develops new customers and retains them.

8. Marketing Penetration: This would mean increasing the number of customers a bank has in new locations.

9. Market Research: Market research is needed for understanding customer needs, assessing the market potential for new products/services, for evaluating customer perceptions of a bank’s products/services, evaluating market share, identifying expansion/diversification opportunities.

10. Market Segmentation: Market segment is the process of dividing a market composed of diverse elements into various sub- markets or segment each of which will tend to display homogenous consumer behaviour. Markets can be segmented on the basis of geographical, demographic, psychographic and behavioural basis.

11. Maslow’s Motivation Theory: The desire to fulfill human wants and needs starts the marketing process of exchange of goods and services. Maslow, the famous psychologist, is the originator of the theory that all human beings have needs which exist in a ladder like format in their minds. At the bottom of the ladder are the physiological needs (Ex: Excretion, eating, drinking, breathing etc). Safety needs come in the next rung of the ladder (Ex: personal safety, safety of property, financial security, health). Social needs occupy the next higher rung of the ladder (Ex: friendship, intimacy etc). Esteem needs come next, (desire for recognition by engaging in activities either professionally or as a hobby that brings recognition to them in the society). The next higher step of the ladder is occupied by growth needs (Ex: the desire to increase their intelligence and knowledge, the desire for something new and beautiful). The highest rung of the ladder is the need for self actualisation. This theory of needs has great implications for marketing. Fulfillment of these needs is the starting point for the creation of a market, the marketing activity and the achievement of economic progress. In order to meet the above needs, which may be recurring (Ex: food) or non-recurring (Ex: marriage), we buy and sell goods and services.

12. Micro and Macro marketing: Marketing activities carried out by an individual business entity is micro-marketing. It defines the activities of individual business entity starting with designing, producing a product or service and making it available to the consumer. They will be pre-occupied with their selling strategy, pricing policy, distribution strategy etc. Macro- marketing deals with the allocation of resources in an entire economy for satisfying the needs and wants of its people.

13. Millward Brown Optimor Survey: Millward Brown Optimor Survey annually selects the biggest brand in the world in terms of current earnings and expected future earnings:

14. MIS: For an economic organization, like a bank, MIS means Management Information Systems. Core banking introduced by many banks is an example of the use of technology in MIS to provide improved customer service

15. Motivation: When the head of an organisation inspires its employees to perform better, it is called motivation.