What is Amex Bank’s strategy for the retail banking market?
To win in the market place our focus is on the affluent and aspiring affluent customers consistently as part of our global strategy.

We believe in one, owning the customer, predicting his future needs, and delivering value irrespective of whether we manufacture the product or not. Two, entering into partnerships to widen our scope. We have done it in other products viz., travelers cheques, card business and network services. So, we are comfortable with a globally networked partnership strategy.

Hence, we intend entering into partnerships with significant players in India as well, where we will draw on the strengths of the partners. As for image, our partners should be consistent with what Amex believes in.

Which market segments do you serve?
At Amex consumer banking encapsulates the personal finance services. That is, it's not going to be only banking but will involve financial services as well. However, we are focusing on only certain aspects of financial services and on some segments where we feel the value that this brand offers is something that the customer wants.

Hence, our aim is to it is our global strategy serve the affluent and aspiring affluent customers (the growing white collared middle class customer) in various pockets across the globe, across financial services, and preferably through direct channels.

Customer financing is classified under four categories: Savings and investment needs, credit needs, advisory requirement (customer's risk management) and transactional needs like cash management, automated movement of money, and utility payments where the customer is saying take out the hassle from my head.

Any serious player in consumer finance should look at providing the whole range of these services. For, it does not make sense for a customer to have an account with you, but goes to another provider for loans and other services. There is no value derived from such a relationship. Hence, we are looking at such need groups and intend to meet their requirements over a period of time. We are doing well on the investments and savings front currently.

We have a good mix of products on the loan side. We would wait a little while before offering advisory services. Some regulatory issues have to be sorted out. Any transactionary stuff relies a lot on the technological aspects and we are looking at our global platform to deliver. It's only a question of time before that happens.

To achieve economies of scale as well as cut the time to market, we believe we have to own the customer, know everything about him, and be able to predict his future requirements. We have enough data on the cards side and the banking side to do that.

Do you aspire to become a one-stop solution provider?
We do aspire to become a one-stop provider, but we don’ t use that term because a one-stop provider in banking is different from a one-stop provider in financial services or any other services. What we are look ing at is, as far as financial services across these four need groups go, we would like to be the pre-eminent choice for the affluent and aspiring affluent segment of the customers.

But to do that we may not necessarily manufacture every product ourselves, but may still provide it. However, if we find that the pricing or the economies of scale do not justify our manufacturing costs then we may just distribute the products.

Similarly, to access our customers if our distribution has certain obvious disadvantages, we might work with certain reputed distribution companies in the country to make available our products.

So, it will be: our products our distribution, our products third party distribution, and third party products our distribution.

How are your products different from others?
Personal loans were launched three months back as an innovative product. About six months of background research was done in three stages: one-on-one, group discussions and user research. That is, we first launched the product on a test basis and gauged the response to perfect the product.

We gave them maximum choice. Its unsecured, has the most realistic interest rates in the market because it had to reflect the happenings in the market. The customer is looking for honest communication, a hassle free product, and the freedom to use the money whichever way he wants. We also gave him the option to transfer his outstandings from elsewhere to our books at an extremely attractive price. And these things have worked out well for us.

For instance, if you look at our car loans our positioning itself is very innovative: we give the freedom to choose between multiple repayment options, balloon payments, upfront higher amounts, lower and longer tail, etc. In short, we gave them a structure which they were comfortable with.

We have bundled every product with a card option. Which means our product is not just an auto loan, it is a car loan with an option to take a card at a very desirable rate, along with a number of advantages including membership rewards.

On the ATM network, it was an innovative product as well. We are the first ones to have a bank-to-bank collaboration; IDBI Bank's ATM network is available to our customers across the country.

Cloning of financial products is very easy. What then would be the competitive advantage in this industry?
At various points of time, people have talked about availing of specific advantages. If you look at Amex, our strength is our phenomenal brand image. As the market gets murkier with many players entering the fray, with many offerings similar looking and similar sounding, the customer has to differentiate. The customer usually considers a brand that he can trust. He looks at two things -- brand image and longevity of that brand. Our brand name, our focus, and our consistent track record will stand us in good stead.

What are your views on commoditisation of the personal finance industry?
Price being an important aspect of value is beyond doubt. When we talk about the Indian consumers being very focused on price value, internationally too the situation is the same. Globally when customers look for value, price is an important criteria. If the Indian market is getting commoditised, there are quite a few markets that are already commoditised. In each of these markets our strategy has been unique; consistency is what we are concentrating on and of course, owning the customer.

If the customer is comfortable in dealing with you for the value you bring in and for the brand that you are, he won’t go shopping to an extent. He will stick on with you for the experience. It grows into a relationship.

There are our overseas card customers who have stayed with us for around 30 years. Even as the market does get difficult with time, Amex is well-positioned to deal with the situation mainly on account of being in a number of markets.

We are still in a market expansion mode in India. It is not as if we feel overbanked. However, there could be shakeouts, mergers, and players getting out of the business. In short, plenty of action.

Technology has changed the banking paradigm. How are you placed in this respect?
Technology is interwoven in everything that we do -- right from management information systems to product delivery and distribution to workflow, imaging and customer service.

We are fortunate that most of it is developed globally, so the costs don’t get repeated here in India. As such, our capacity to invest in India would be higher than some of the local players.

The speed with which you interact with the customers is also important. A significant technology backbone helps us do just that. But, it will take some more time for us to serve all the customer requirements.

In developed countries, banks are actively promoting electronic channels as a scheme for incentives and penalties. What is your policy?
Globally, as well as in India, at our call centres and ATMs we actively promote E-channels. Everywhere our reliance on the electronic media has increased. Amex, as a company, has launched Internet banking in the US just three months ago. We offer via the Net everything that a bank can offer. As Internet is cheaper, we offer value to our customers both on the investment and lending sides. We offer Net solutions to small businesses as well.