Empirical Modelling of Bank Market Exclusion

Driven by higher profit incentives, banks' marketing strategies have tended increasingly to exclude sections of the retail market on socio-economic lines. Ironically, these strategies are now seen to have profitability and social responsibility implications. Little previous attempt has been made to quantify the relationship between bank service access and the determinants that act as deterrents, to improve general understanding of the extent of exclusionary influence of each determinant and the relevant implications. This study examines quantified relationships using the Probit model and data collected through primary research from a developing economy in the Asia Pacific region. Results show that bank-driven pricing strategies may have an overriding effect on other factors. The analysis demonstrates that profits may be increased, socio-economic exclusionary effects reduced and social image improved by voluntarily reconsidering pricing and other bank-driven exclusionary strategies