Building blocks of success

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: AS I paint on the canvas and sketch the skyline of India’s banking industry of 2010, I see several tall sky-scrapers and institutions. This article is an attempt to identify the building blocks that will help successful banks to create the sky-scrapers of 2010.

By the year 2010, there will be more clarity as regards India’s stance in providing greater access to foreign players in the Indian banking space. By 2010, local banks would have had sufficient time to consolidate operations and position themselves in way that would address increased competition. Mergers, alliances and partnerships in the run-up to 2010 would lead to perhaps lesser numbers, but larger and more resilient Indian banks.

Reach factor
One of the largest distinguishing factors for the successful bank of 2010 will be ‘reach’ . This will be its ability to reach to various markets and users. Banks will need to reach out to new markets, in terms of geographical expansions, beyond India’s borders and deep within India’s villages.

Hyper and super-markets will be the next big avenue of dispensing finance. In times to come, financial services and products offered through such stores will constitute a significant portion of India’s financial services sphere. A bank’s ability to reach various users of its services, wherever they reside, and to design and offer services that suit user requirement will be important factors for survival. The key element of success will be to cover the entire plethora of a consumer’s financial and banking requirements.

These could include having a savings account, investing in various assets, mortgages, foreign exchange services; retirement planning, financial advisory or what have you.

Equally important will be for the banks to reach areas where banking services do not exist and also areas which have a dearth of such services. From an overall socio-economic standpoint, financial exclusion can retard economic growth and increase poverty and inequality. Banks therefore have a critical role to play.

Enablers
As connectivity improves, technology will play a crucial role in reaching out to diverse markets and users. In the coming years, no one delivery channel will suffice and banks will need to employ a combination of delivery channels to reach out.