Evaluating Bank Account Types Offered to International Students:


  • 2 CHAPTER 1
  • 4 1.1 Research Aims
  • 5 1.2 Research Objectives
  • 6 CHAPTER 2
  • 8 CHAPTER 3
  • 10 3.1 Sample
  • 11 3.2 Sampling Strategy
  • 12 3.3 Primary Research
  • 13 3.3.1 Questionnaire for Students
  • 14 3.3.2 Questionnaire for Bank Personnel
  • 15 3.3.3 Consent Letter
  • 16 3.3.4 Cover Letter
  • 17 3.4 Secondary Research
  • 18 3.5 Research Design
  • 19 3.6 Procedure
  • 20 3.7 Qualitative Analysis
  • 21 3.8 Quantitative Analysis
  • 22 3.9 Percentages
  • 23 CHAPTER 5


The main aim of the study was to investigate evaluate the major banking institutes in Newcastle and distinguish the services and account types offered to international students. For the study, four banks were selected among which three were United Kingdom based and one was an international bank. The banks included in the study were HSBC, Lloyd’s TSB, Barclays and National Westminster (NatWest).

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By using two questionnaires; one from the international students and other from the bank personnel, the present study assessed the important factors that were considered significant in selecting the bank and the importance of students as customers for the banks. The results suggested that there was little different in the basic facilities offered by the four banks, but Lloyds TSB was the most popular among the international students due to its variety of student accounts. In conclusion, the research offered an insight into the management and the marketing strategies that banks can make use of to attract international students as potential customers.



The aim of the present study was to evaluate the major banking institutes in Newcastle and distinguish the services and account types offered to international students. For the study, four banks were selected among which three were United Kingdom based and one was an international bank. These banks were: HSBC Lloyd’s TSB Barclays National Westminster (NatWest) The researcher compared the services, interest rate, few charges and the ease of accessibility of these banks to the international students with they region they resided and attended their respective colleges or universities. The topic of the present research was selected by the researcher because the issue of how international students select their banks in Newcastle has been given considerable attention by researchers. The reason for this is that most international students who come to Newcastle are without local bank accounts and in the long run most students need such a facility to work on completing transactions such fees payments, living expense, accommodation and fulfillment of other financial needs. Investigating such information would assist banks to recognize the suitable management and marketing strategies required to attract new students as customers and keep hold of existing ones (Kaynak & Kucukemiroglu, 1992). The relevant literature indicates that a great deal of research effort has been put into investigating the bank selection decisive factor for international students in the United Kingdom. Researches on bank management and marketing are not a new phenomenon. In fact, a lot has been written on the subject of bank management and marketing with the bulk of the literature relating to banking behavior of general customers. A broad range of marketing paradigms related to customers has been examined, including market segmentation, attitudes, purpose, inclinations, bank loyalty, bank selection choices, bank representation, bank service value, contentment and multiple bank users (Garland 2002). One marketing concept related to customers that has fascinated abundance of researches has been the thought process of customers or the grounds on the basis of which customers decide to interact with particular banks (Anderson, Cox & Fulcher, 1976; Evans, 1979; Kaynak, 1986; Boyd, Leonard & White, 1994). A thorough examination of the present literature ascertains the generalization related to the thought process of retail customers. The population of interest in the vast bulk of such customer researches has been the general customer. Only a few of researches have intended for younger age groups such as the undergraduate section of the market though over past few years, the bank management have started to take vast interest in this section of the population (Mokhlis, Nik Mat & Salleh 2008). Even though greater parts of undergraduate students are unemployed and their earning comes largely from educational loans, they offer an exceptional business opportunity for banks. First, in regards to their buying power, the student segment is growing and has turned lucrative (Ayadi 1996). With the development of educational services in United Kingdom, the amount of international students in further and higher education has been increasing rapidly over the years. Secondly, students are expected to require a bank account to settle their tuition fee or parental funding and might be taking care of their personal financial matters for the first time (Kaynak & Whiteley 1999). Those students who do not yet hold bank accounts would be required to open one as they begin college because all transactions are done through the students’ bank accounts. Regardless of their comparatively basic banking requirements, students are considered an important segment in the market at the level in the buying cycle where they might be more receptive to marketing strategies from financial institutions (Thwaites & Vere, 1995). 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 and salary earning customers will bring revenue to the bank. They must understand that student customers are also possibly lucrative market section and prospect market earnings will be attained by banks only if they target this up-and-coming section and win them (Grady & Spencer 1990). Banks that would get hold of student segment must know the significant factors that decide the basis upon which students choose between financial institutions (Kaynak & Yavas 1985). Bank marketers must be capable of discerning what is central to student customers in the market and how their force compares with those of their competitors (Cicic, Brkic, & Agic, n.d). United Kingdom has an extensive history of inviting international students to educate themselves in its colleges and universities. According to UCAS (2009), “In the UK in 2009 there were 1.8 million full-time undergraduate students in higher education, which included over 104,000 international students.â€? The rapid growth in the amount of international students in the past few years has become a significant supply of export revenues, and it surely has the ability for further rapid growth. It had been recommended that provided with the right support, the amount of international students studying in UK universities could more than double in the next few years (Higher education’s importance goes well beyond teaching 2009). There are numerous factors involved in offering of student accounts in nearly all financial institutions. It might be due to growing the customer base or acquiring the new customers in the budding stage. In the contest to get hold of more and more customers and attract the younger generation, the financial institutions are offering various types of products and services. International students studying in the United Kingdom need to look after numerous things once they have arrived at their respective colleges and universities. These include accommodation, health, money matters, registration, etc. But the first and the foremost duty of a student on arriving in United Kingdom is to open his or her account in order to carry out the required financial transactions. Even though, the student cannot open a bank account until he or she has arrived and enrolled at the college or the university, but Barclays now offers a bank account that can be opened before arriving in United Kingdom (International Student Handbook 2009). In order to open a bank account, an international student needs to first decide on the bank and the account that he or she requires. Some banks offer first-time students a Student Account with special advantages. However, each bank offers different facilities, and the student would need to compare and decide which one will be best for him or her (International student: banking Information 2009). Once the bank has been chosen, the student needs to take his or her passport along with his or her student visa to the chosen bank. If the student belongs to EU, then he or she is also required to take the national photo identity card as well (Opening a UK bank account 2003). Furthermore, the banks also require a letter or certificate from the university confirming the student’s United Kingdom study details. Moreover, in order to open an online or a telephone account, the bank may require more proof of the student’s identity (You can bank on it: opening a bank account in the UK 2004). The reason for banks requiring proof of ID is because the law of UK states that all financial services companies must do everything they can to ensure their services are not being used for financial crime. Because of this, banks must avoid accounts from being opened under fake identities. They must ask each and every individual who wants to open or operate a bank account for documents to prove their identity (International student opening a UK bank account, n.d) As Newcastle has gained the one of the top most position in the United Kingdom for further education, therefore the need for the student to open bank accounts to carry out their financial transactions has risen as well. This is because most international students who come to Newcastle are without local bank accounts and in the long run most students need such a facility to work on completing transactions such fees payments, living expense, accommodation and fulfillment of other financial needs. Thus, the banks have recognized the significance of international students as potential customer and it is due to this fact, the banks in Newcastle are aiming to improve their clientele by attracting students to open bank accounts in their respective bank through different marketing strategies and incentives. As a result, numerous bank representatives are seen roaming around in the first week of the academic year in various universities and colleges marketing their benefits to the potential customers. These bank representatives provide students with information regarding various services and benefits that are offered at their respective banks. They would also provide information regarding the different accounts that can be opened at the banks. The most common type of accounts are: Deposit account or ‘basic account’ Current account Student account The banks also offer a number of facilities to their customer to make their financial transaction more convenient and easier. These facilities include: Cash withdrawals available at Post Office Debit Card ATM ATM Card Direct Debit Online Banking Telephone Banking

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