Competition analysis

In a competitive financial and banking market, any financial institution in the market should know at least the following aspects about competitors: who are the competitors; what are their goals; what are their strategies; what are their strengths and weaknesses; and what are their usual responses to market changes.

Competitor Identification refers to knowing the names of the main providers of financial products and services similar to their own offering.


This includes not only identifying financial institutions that operate in the reference market by offering similar products and services, but also taking into account the category of competitors of companies that by the nature of financial products and services complement their own offer.

For example, if we want to identify competitors for the car loan product, we will consider all financial companies that offer credit products for car purchases as competitors, but also those that offer loans for personal needs.

Competitors Goals are determined by many factors, including: company size, history, current management, and economic data.

Knowing these aspects, the financial institution will need to get detailed information about sales, market shares, profits, percentages, capital, etc.

However, some of the necessary data is confidential and therefore difficult to obtain.

However, the annual report of financial institutions can be an important source of data. Also, to fill in market information, it is important to evaluate the following parameters:

  • Market Share - the position of an individual company in the market relative to its competitors.
  • Weight in mind - the number of clients who assign their financial institutions in response to the question "Name the first Bank that comes to mind".
  • Affective weight - the number of clients who assign their own financial institution in response to the question "Name the Bank you would like to work with".

Once all this data is collected, the next step is to convert it into useful information. This process is made possible by evaluating the differences between your own financial institution and your competitors in order to determine strategies against your competitors.

The process of determining competitive strategies is periodically carried out by the financial institution, since it is not static. Market competitors periodically review their strategy and may use different strategies for different services.

Identifying strengths and weaknesses is another important aspect in analyzing competitors. This is achieved using SWOT analysis (strengths and weaknesses; opportunities; threats).

Competitor response type Analysis completes the process of monitoring competitors by evaluating how they can respond to any market movement made by their own financial institution.

Monitoring competition behavior is the process by which a financial institution seeks to identify competitors ' goals, strategies, strengths and weaknesses, and possible responses to changes in the market.


10 February 2020

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