We are independent & ad-supported. We may earn a commission for purchases made through our links.
WiseGEEK

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

How Do I Conduct a PEST Analysis for a Bank?

K.C. Bruning
By
Updated May 17, 2024
Our promise to you
WiseGEEK is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGEEK, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

In the process of conducting a political-legal, economic, socio-cultural, and technological (PEST) analysis for a bank, several environmental and regulatory factors are typically considered. Some of the specific things that can affect a bank include local regulations, citizen’s feelings about using banks, and whether the economic climate can support a new financial institution. The analysis can help a bank to determine how to position itself strategically as it determines the best methods for approaching marketing, opportunities, and the development of the business. A PEST analysis for a bank may also be useful in helping to determine whether it is advisable to enter a new market.

The first step of a PEST analysis for a bank is an examination of the political environment. One of the key elements of this task is to determine the overall restrictions and support that can be expected from the government. By studying other banks in the same sector, it can be possible to get an idea of what the current environment is for financial institutions. This is a particularly important step for a foreign bank, as government regulations can vary widely among different countries.

Next, the PEST analysis for a bank will typically be used to determine the economic climate. Important elements to consider include the overall health of the market, interest rates, and inflation. A bank may also find it useful to make projections as to the long-term stability of the economy. The goal is to determine whether another financial institution could thrive in the current and developing economy.

Another part of a PEST analysis for a bank is the examination of socio-cultural aspects that could affect the business. One of the most important aspects of this step is to determine the cultural attitude towards money-related issues. This can include things such as overall feeling about banks, how savings are approached, and general attitudes about loans. A foreign company may wish to determine whether it would be welcomed and trusted by the citizens in the targeted area.

The final step of a PEST analysis is the technological aspect. It is advisable for the bank to determine whether it has the technical resources to effectively serve its customers. This includes having the capacity to upgrade systems and adopt new technologies that are efficient and effective. It is also important that technology enable the bank to serve the customers as they find it most convenient. This means ensuring that systems are not only appropriately updated, but easy for the target customer to use.

WiseGEEK is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
K.C. Bruning
By K.C. Bruning
Kendahl Cruver Bruning, a versatile writer and editor, creates engaging content for a wide range of publications and platforms, including WiseGEEK. With a degree in English, she crafts compelling blog posts, web copy, resumes, and articles that resonate with readers. Bruning also showcases her passion for writing and learning through her own review site and podcast, offering unique perspectives on various topics.
See our Editorial Process Share Feedback

Related Articles

Discussion Comments

By SarahGen — On May 13, 2013

I did a PEST analysis for a bank last semester for class. It was an interesting project. I looked at an American bank and how it works with local governments. Banks have their own regulations but they also have to work with the regulations and laws of that government.

The other important part of my analysis was technology and service. If banks have many branches, they have to make sure that they are providing the same service, technology and opportunities at each branch. Otherwise, the bank loses its credibility and trust.

And the last part is keeping up with all the developments taking place in the global banking sector.

By burcinc — On May 12, 2013

@fify-- It can definitely be an issue, especially when setting up a bank branch in an overseas market. That culture might not be familiar with banks, bank accounts and ATMs. Furthermore, the policies of the bank can be religiously or culturally unacceptable.

For example, in many Muslim countries, interest is forbidden and banks that give and take interest may not be allowed. Even if the government allows it, the people may not use the bank.

So a bank that wants to open branches overseas has to consider the social and cultural factors as much as the other factors when doing their analysis.

By fify — On May 12, 2013
I can see how political, legal, technological and economic factors may become an issue when establishing a bank. But do social-cultural factors ever become an issue? It seems unlikely.
K.C. Bruning

K.C. Bruning

Kendahl Cruver Bruning, a versatile writer and editor, creates engaging content for a wide range of publications and platforms, including WiseGEEK. With a degree in English, she crafts compelling blog posts, web copy, resumes, and articles that resonate with readers. Bruning also showcases her passion for writing and learning through her own review site and podcast, offering unique perspectives on various topics.
WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.