Abstract
Abstract: The research sought to analyse the impact of emerging market trends as measured by competition, technology and consumer demographics on the development and marketing of financial service products in Zimbabwe post dollarization. The Zimbabwean financial service sector has been largely characterised by new and changing market trends since dollarization. These trends have largely manifested in the form of entrance of new players in the market, a growing informal sector at the expense of the formal financial sector and the emergence of new technology paving way for the need to develop and market new financial service products. There is therefore need for financial service providers in Zimbabwe to continually embrace innovative product development and marketing strategies so as to shape banking products to fit consumers’ evolving financial needs much of which are well beyond the realm of traditional banking products. An explanatory research design was adopted in conjunction with a descriptive research design. Results from the study indicate that the entry of new financial institutions, removal of barriers between institutions, emergence of non-regulated financial institutions, increased consumer access to financial information owing to increased adoption of technology, market fragmentation and increased formal unemployment have a significant impact on the way financial service products are structured, provisioned. In light of that, it is recommended that financial service providers should design and tailor new business models to suit the emerging market environment.Keywords: Emerging market trends, development, financial services, Zimbabwe, post-dollarization
Highlights
According to Gundani (2015) the financial services sector remains the bedrock for economic development by virtue of it being a conduit for economic transactions
Estelami (2012) asserts that there has been a significant shift in the type of competitors that traditional financial service providers have to compete with today as insurance companies, telecommunication companies through mobile money which were primarily providers of predefined financial products are encroaching the boundaries and can provide products related to investment, time deposits, retirement planning and other services traditionally provided by banking and investment institutions
The findings of the research indicate that the removal of boundaries between financial institutions has affected to a great extent affected the uptake of financial services in Zimbabwe as indicated by a high mean of 4.59 and a low standard deviation of 0.74 which is indicative of the high significance of the impact as banks can offer insurance, microfinance and investment products while microfinance banks can offer microfinance services and accept deposits from customers
Summary
According to Gundani (2015) the financial services sector remains the bedrock for economic development by virtue of it being a conduit for economic transactions. The liberalization of the Zimbabwean financial sector through the Economic Structural Adjustment Program (ESAP) in 1990 saw a shift from a state interventionist to a more market driven financial system This created new opportunities for entrance of new players into the financial services sector and gave rise to the emergence of new business classes notably microfinance institutions which came as a response to the need for provision of micro credit by Small to Medium Enterprises and the informal sector which had been largely ignored by the formal financial sector. The Zimbabwe financial sector followed a largely oligopolistic banking structure marred by a few expatriate banks such as Barclays and Standard Bank which continue to dominate the market until today This was a heavily segmented structure which confined categories of financial institutions to specific types of business (Moyo, 2008). Building societies were only limited to real estate and mortgage financing, commercial banks were limited to the provision of short term working capital finance and merchant banks were responsible for wholesale and long term financing
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