CHALLENGES FOR BANKS IN MARKETING OF MORTGAGE LOANS

Historically, the youth segment has been the focus of numerous financial research attention and subsequent marketing efforts aimed at attracting and retaining this segment. The youth are seen as particularly attractive to the financial services sector due to its potential net worth. Young people under the age of 25 have been identified as the group showing the strongest preference for personal banking technologies and innovations. The fact that they generally comprise the larger population demographic and the more lucrative segment makes them a very important consumer part for studying personal banking technology choice motives. [1] This paper aims to present an analysis of student choice criteria in the mortgage loans market in Latvia. In particular, the study investigates the relative importance of choice criteria according to students and also analyses differences in the importance of choice criteria with respect to a number of demographic and related factors. A quantitative study drawing data from 257 participants. The study shows that students are choosing a mortgage loan bank on the basis of bank's reputation and personal experience is the most frequently cited choice criterions, closely followed by mortgage loan price (interest rates and fees). This paper offers an in-deph understanding of students' buying behaviour in relation to the selection process, and provides bank managers with useful insight into the development of high quality special students loyalty programs. The results of factor analysis show that criterias influencing the student choice of mortgage products are divided into four groups: additional features of the mortgage credit, brand of bank, recommendations (professional advice and family's recommendations) and low price of the credit. The student choice of bank is largely due to the students loyalty program, therefore bank's marketing professionals should have to directed more resources to the development of programs to youth, rather than on sales promotion activities.