CC BY
25
Section 12. Philology
Section 12. Philology
Stepanov Aleksej Alekseevich, Moscow State University of Economics, Statistics and Informatics, Kemerovo branch, Lecturer of economic disciplines E-mail: AStepanov@mesi.ru Bondareva Evgeniya Petrovna, Plekhanov Russian University of Economics, Kemerovo Branch, Assistant Professor, Department of Foreign Languages E-mail: bondarevaep@list.ru Chistyakova Galina Victorovna, Plekhanov Russian University of Economics, Kemerovo Branch, Assistant Professor, Department of Foreign Languages E-mail: galvik06@mail.ru
Effective communication with credit experts of commercial banks (some aspects of work of small innovative enterprises at higher education institution)
Abstract: Small innovative enterprises at higher education institutions provide non-standard educational services for various categories of consumers. The work of the banking sector of economy is one of the objects of research carried out by the enterprises mentioned. The article deals with the description of speech strategies used by commercial bank credit experts. The research is intended to help potential borrowers to understand credit conditions offered by the banks in detail.
Keywords: speech strategy, small innovative enterprise at higher education institution, educational service, credit expert, commercial bank, client, consumer loan.
Public-private partnership is a set of forms of medium and long-term interaction of the state and business for the solution of socially significant tasks under mutually agreed terms. A small innovative enterprise at higher education institution is one of the most relevant ways of realization of this partnership. Such enterprises are established due to synergy of financial, scientific, technological, personnel and methodical resources of an educational institution and business structures. The scope of activity of small innovative enterprises ranges from introducing innovative technologies in production process to providing up-to-date services focused on consumer interests. The enterprises provide non-standard educational research and development, practice-oriented, methodical and other services for various categories of consumers.
The work of the banking sector of economy is a timely topic requiring special attention in the workflow of small innovative enterprises as consumer spending and consumer lending are the main driver of the GDP growth in the current market conditions. Any government is certain to be interested in
this driver functioning in the long run. Consumer lending is extensively developing in the Russian Federation. Moreover, experts note the upsurge of unsecured consumer lending. However the increasing number of loans is accompanied by the growth of consumer loans in arrears. This fact indicates that more and more citizens meet financial difficulties due to various circumstances and cannot pay a loan off in time.
The number of commercial banks in Russia has considerably increased against the background of rapid development of the retail lending market. The purpose of the credit organizations is to form extensive credit portfolio in the shortest possible time. The bank doesn’t worry if a borrower is unable to meet the credit agreement conditions. The security service will help the bank to get the money back or the overdue credit will be bought out by one of numerous debt recovery agencies. As the regional portfolio of consumer credits grows, the number of the bad loans also increases.
The reason of such an ambiguous situation is in good advertising and adequate marketing policy of credit organizations.
86
Effective communication with credit experts of commercial banks...
The announcement “Sale of credits” and people offering bright leaflets of some banks with tempting proposals have become a common thing today. We all have got used to endless sms messages and email letters from some banks. These tools are working successfully and they earn huge profits for the banks as the credit that can be taken out with only one document in five-minutes time implies a very high interest rate.
Appeared at the market of consumer lending brokerage firms also play an important role. For a definite commission these firms “will help” everybody to get a loan “under the best possible conditions” no matter how clear your credit history is and how much money you earn.
Availability of credits (point-of-sale loans, on-call loan specialist coming to your workplace, etc.), a simplified procedure of drawing up loan documents, a great number of credit consultants being perfect masters in strategies of persuasion make customers subscribe under unprofitable credit agreements.
The target of this work is to identify the speech strategies used by credit experts dealing with the bank clients. According to O. S. Issers the speech strategy is “the cognitive communication plan that controls the optimal solution of the speaker’s communicative tasks in conditions of the lack of information about the partner actions” [1, 100]. Procedurality of a speech act implies the choice of definite speech patterns used to influence on the interlocutor as “strategic planning of speech is carried out by selecting some speech steps aimed at achievement of the target” [2, 204].
Banks carefully choose both their borrowers and the bank’s credit officers. It results from the necessity to minimize the risks assumed by the bank while granting a loan and the intention to maximize the loan portfolio. The lower the risk is the higher profit the bank gets and the less the bad debts portfolio is That’s the reason the bank staff advising clients is thoroughly trained before the independent work and is guided by the effective consultation algorithms and speech patterns.
The data for this study were collected by means of the interview with 15 loan officers of different commercial banks based in the Kemerovo region. The analysis of the interviews let to distinguish several speech strategies. The consultation algorithms and speech patterns used by a loan officer aim to conceal some unattractive loan conditions. To assess all pros and cons of a loan offer the person who comes to a bank for getting a loan needs to understand exactly what the loan officer talks about, i. e. what speech strategies he uses to make him subscribe a loan agreement. The strategies identified through the analysis are listed below.
1. Strategy “Active search”. Surveys carried out by credit organizations show that 65 % of borrowers found out about the opportunity of getting a credit in some shops or trade centers or through direct-mail advertising. As the result loan officers are in permanent active search. They visit organizations, make phone calls to potential customers, hand out promotional materials. Potential clients should be aware that the only aim of these contacts is to make them get a loan by any means. The piece of advice that can be given to a potential
«victim» is as follows: if you have no need in getting a loan at present pay no attention to a bank’s tempting offers.
2. Strategy “Care and attraction”. The conversation with a bank customer begins with establishing the rapport. As a rule, a loan officer finds out the first and the middle names of the client to address only officially afterwards. The officer makes it not because he is very polite. His only aim is to establish the customer’s loyalty to the bank’s services. Psychologists consider that being addressed by the first and middle names the client feels significant and special for the bank. The officer usually makes only the illusion of some special esteem and care of the client. Nevertheless, this strategy works quite successfully.
3. Strategy “Target”. The customer is always asked the questions like “What is the target of your loan?” or “What do you need the loan for?”. He strongly believes that the loan officer is looking for some credit product that is the most advantageous for him. However this is one more illusion. The true goal in this case is to elicit the key motives and needs of the client to use them afterwards for “processing the client’s objections” connected with the high interest rate, expensive insurance, etc.
When the client hears the arguments aimed to meet his needs he unconsciously misses the information about the interest rate, the insurance rate and some other important conditions.
4. Strategy “Demand loan”. Loan officers present a specific banking product based on the needs of the client. However you should not think that the bank has created tens and hundreds of various loan programs. It is not so. As a rule, the range of services offered by commercial banks is limited to 4-5 key loan programs. For effective presentation of the bank’s products the loan officer uses the patterns like “According to your need...”, “This product can perfectly meet your needs.”, etc. These and similar speech patterns make the client believe that this is the only bank that can offer him some special credit product.
5. Strategy “Camouflage”. While communicating with a client the loan officer is obliged to greet, answer the questions, describe the bank’s products and say good bye very politely with a warm smile. The essence of this behavioural model is to leave a positive impression of the visit to the bank. The client does not necessarily agree to get a loan at that very day but the bank managers are absolutely sure that he will come again to the place where he felt comfortable. This is the reason to pay your attention to the loan terms exceptionally and ignore smiling loan officers, a cozy atmosphere, a pleasant colour range and the office ergonomics.
6. Strategy “Speech deception”. The key stage in the work of loan officers is the Work with Objections block. The purpose of this stage is to convince the client that the offered loan conditions are quite acceptable for him. The point of the high interest rate is commented like this, “Ivan Ivanovich, the interest rate of what bank do you compare our offer with? Do you know that in other banks there are large hidden commissions which nullify the attractive interest rate by the total
87
Section 12. Philology
overpayment?" Another argument might be, “Ivan Ivanovich, in fact, the rate is not as high. You’ve said that you will pay the loan out in advance so the total payment will be much lower in your case!" There are two aspects to remember here. At first, you as a client can face some financial problems that prevent you from full repayment before the maturity date. As a result the amount of the overpayment will be quite substantial. Besides, according to the banking legislation of the Russian Federation, banks are not allowed to include any hidden commissions in the loan cost. So, all similar arguments are used with the only purpose to bring a potential client to the right decision.
7. Strategy “Game of terms”. Some bank’s clients don’t understand the difference between the interest rate, the overpayment and the total cost of a loan. This circumstance is often used by banks. For borrowers to be aware of the main loan terms there is the following explanation. The total cost of a loan is the expenses for serving the loan expressed in percentage that include interests on credit, different commissions and other costs covered by the loan agreement and the bank’s tariffs. The total cost of the loan is expressed in an interest rate and is tied to the amount of the principal debt. Let’s assume that some borrower gets the loan of 100 000 roubles for 5 years period. The agreement states that the total coat of the loan equals 200 %. It means that the borrower will pay back extra 200 000 roubles in the form of commissions, payments, interests above the loan amount. As a result, the total sum of the payments will make 300 000 roubles. Loan officers do not usually comment on the total cost of the loan but appeal to the interest rate instead to disorient the customer.
8. Strategy “Pseudo-economy”. Advertising or loan officers often use the phrase “The annual overpayment will make only 15 %" This wording creates some favourable impression about the bank and diverts the customer’s attention from the real loan terms. In this case the borrower should always remember to multiple the rates by the number ofyears that is the period of the loan. If the period is 5 years so the overpayment will account 75 %. Besides this strategy is mainly used by the banks that offer their clients the highest interest rates.
9. Strategy “Additional sale”. In case the bank client wants to get a short-term loan he often refuses life and health insurance. However the bank doesn’t have full credit-back guarantee in this case. So to persuade customers loan officers change the term “Insurance" to “Financial protection"
They say “We offer you the financial protection not the life or health insurance!" This term creates an impression of safety and care. However the borrowers should be alerted that the difference is only in terminology not in the amount saved.
10. Strategy “Back question”. The client that is not happy with the credit conditions asks the loan officer some specifying questions. The loan officer uses the Back-question strategy, cf.: “Your interest rate is too high!" - “Do you really consider our interest rate to be too high?" - "Yes, I do!" -"What is important for you: true information or pleasant deception?" - “True information, of course!" - “Well, you should understand that today any other bank offers loans on the same conditions but you’ll have to pay some additional insurance as well as hidden commissions. While our bank is fully honest with you! We do offer you the best conditions as our rate is all inclusive!" A potential borrower should be very careful of this speech strategy as during such conversation he gives the loan officer additional information to be easily persuaded.
11. Strategy “The active listener”. The essence of this strategy consists in the ability “to keep correct silence" (to give a potential borrower possibility to speak out, to express his/her fears). A loan officer keeping correct silence creates an illusion that he/she is fully interested in the client’s problems and is trying to find the most profitable loan terms. The customer is absolutely sure that such a good person can’t deceive him.
12. Strategy “Shift to the future”. Bank employees quite often attract their potential borrowers by some benefits that they can get in the future: “You doubt if it is worth getting a credit card? This is the money just in case! If you don’t use the card you pay nothing! But if you need some money one day you won’t have to borrow it at your friends or relatives. Just use your credit card!". The possibility to have “near" money without any additional costs always tempts people.
So, the given list of strategies used by loan officers is not complete for sure. Not to be caught on the hook potential borrowers should be aware of these strategies and tactics. Besides it’s a good idea to study some bank terms to understand what is going on while you are in a hank. Moreover before the visit to a bank the borrower should clearly understand what exactly he needs and what loan conditions he is able to meet. We consider that small innovative enterprises at higher education institutions can provide some educational services to eliminate financial illiteracy.
References:
1. Иссерс О. С. Коммуникативные стратегии и тактики русской речи: монография/О. С. Иссерс. - 3-е изд., стер. -Москва: УРСС, 2003. - 284 с.
2. Чистякова Г. В., Бондарева Е. П. Коммуникативные стратегии и тактики в самопрезентациях (на материале русско-и англоязычных сайтов знакомств)./Г. В. Чистякова, Е. П. Бондарева//Филологические науки. Вопросы теории и практики. - 2014. - № 11 (41). - Часть 2. - С. 203-207.
88
