Strategic and marketing implications of consumer behaviour in financial services

As competitive liberalisation and the application of technology in the crea tion and distribution of financial services have increased consumer choice in the UK personal financial services industry, so consumer behaviour has a ssumed a greater role in determining the strategic environment in which fin ancial service providers operate. This paper explores the relationship betw een consumer behaviour and the strategic choices facing financial service f irms by developing a framework of consumer behaviour and linking the forms of behaviour that flow from that framework with the distinctive characteris tics of financial services. It is the interaction between form of consumer behaviour and type of financial service instrument that determines the stra tegic environment within which financial service providers operate. Based o n that interaction the paper develops a contingency view of financial servi ces strategy and argues that to be successful, financial service providers will need to move away from broad service provision and adopt more focused strategies that reflect far more closely the strategic environment in which they operate.