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With a jump in the Indian economy from a manufacturing sector, that never really took off, to a nascent service sector, Banking as a whole is undergoing a change. A larger option for the consumer is getting translated into a larger demand for financial products and customisation of services is fast becoming the norm than a competitive advantage. With the Retail banking sector expected to grow at a rate of 30% players are focussing more and more on the Retail and are waking up to the potential of this sector of banking.
Retail bankers are increasingly aware that their customers, rather than backoffice accountants, will determine whether their stock prices rise or fall. Already the major players in countries across Europe, the Middle East, and Africa (EMEA) are implementing customer-centric operations and continue to promise, in annual reports and other public domains, to be “the customer’s bank.” Taking concrete steps in this direction, many of these organizations are bundling products, creating a single view of customers (although often not in real time), and increasing the flexibility of their products and pricing. Despite these efforts, many banks must do more to transform their operations and processes.
Most of the Indian banks have been retail banks in their business composition. The term ‘Retail Banking’ encompasses various financial products (different types of deposit accounts, housing-consumer-auto and other types of loan accounts, demat facilities, insurance, mutual funds, Credit and Debit Cards, ATM and other technology-based services, stock-broking, payment of utility bills, reservation of railway tickets, etc.,) catering to diverse customer groups, offering a host of financial services, mostly to individuals. Simply speaking, it takes care of the diverse banking needs of an individual.
The Retail Banking Sector, moving towards a new phase in its life. There are strategies which will ensure that it goes in te right direction and there are things which will stop them. lets see what they are:
Strategies:
Problems that will hamper this growth are:
If banks can improve these then they will definitely grow, much more than they expect.
Retail bankers are increasingly aware that their customers, rather than backoffice accountants, will determine whether their stock prices rise or fall. Already the major players in countries across Europe, the Middle East, and Africa (EMEA) are implementing customer-centric operations and continue to promise, in annual reports and other public domains, to be “the customer’s bank.” Taking concrete steps in this direction, many of these organizations are bundling products, creating a single view of customers (although often not in real time), and increasing the flexibility of their products and pricing. Despite these efforts, many banks must do more to transform their operations and processes.
Most of the Indian banks have been retail banks in their business composition. The term ‘Retail Banking’ encompasses various financial products (different types of deposit accounts, housing-consumer-auto and other types of loan accounts, demat facilities, insurance, mutual funds, Credit and Debit Cards, ATM and other technology-based services, stock-broking, payment of utility bills, reservation of railway tickets, etc.,) catering to diverse customer groups, offering a host of financial services, mostly to individuals. Simply speaking, it takes care of the diverse banking needs of an individual.
The Retail Banking Sector, moving towards a new phase in its life. There are strategies which will ensure that it goes in te right direction and there are things which will stop them. lets see what they are:
Strategies:
- Channel integration: The different channels which are there to reach the customer, needs to be integrated in order to reach them in a better and faster way.
- Pricing: Surveyed bankers said use of a broad low-price strategy to increase business flows will decline sharply. Only a few believe that lower prices for all products is the only way to boost demand.
- Strengthening brands: Brand strength is the main asset of any bank. Weakness in branding hurts the ability of banks to differentiate themselves with a clear value proposition to customers.
- Customized products: People need customised brands for themselves. If you provide them what they want, then they will never leave you.
- Service improvements: People want an improvement in the service which these banks are providing in terms of timely problem redressal etc.
Problems that will hamper this growth are:
- Communicating misleading / wrong information regarding credit cards regarding conditions for issue, amount of service charges/ waiver of fees, gifts/prizes.
- Sending services esp Credit Cards to persons who have not applied for them / activating unsolicited cards without the approval of the recipient.
- Charging very high interest rates /service charges.
- Lack of transparency in disclosing fees/charges/penalties. Non-disclosure of detailed billing procedure.
If banks can improve these then they will definitely grow, much more than they expect.
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Hardik Patel, Team Lead (Staffing and Recruitment), Rishabh Softwares Pvt. Ltd. / Rishi Infotech Pvt. Ltd
| 07 23 2008 11:38:45 +0000
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| 01 16 2008 04:54:59 +0000
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| 01 16 2008 04:54:46 +0000
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