Formal ties in financial networks: professional clusters in financial services marketing

Abstract

Purpose – The purpose of this paper is to investigate the role of formal ties in the marketing of financial services and thus provide evidence concerning the relationship between formal ties and the customer appeal of banks and investment banks. Design/methodology/approach – The paper uses correspondence analysis to study formal ties between financial market actors and relates them to customer rankings. The formal ties are described as intra-, inter- and extra-organizational ties. Findings – The authors find that there are several formal ties between financial market actors and provide compelling evidence illustrating how the attractions between financial service providers are related in several ways to the existence of formal ties between market actors. Research limitations/implications – The research is limited to formal, as opposed to informal, ties. The authors examine the essential implications of such ties. Practical implications – In practice, banks and investment banks should consider the implications of formal ties and market connections to improve their performance. Social implications – Networking is a tool for the marketing of financial services and should be understood as such. Originality/value – The originality of this study consists in showing the relevance of various attributes in studying networks in financial markets and in contributing to an understanding of social attributes and formal organization.