Banking on change

Written by Pritha Mitra Dasgupta | Updated: Sep 30 2008, 07:43am hrs
Dad: How was your first day at work

Rohan: Great! I have this cool workstation all to myself. They are giving me a salary account with I**** Bank. Ive already got a debit card and, if all goes well, Ill get a credit card pretty soon.

Dad: Thats fine. But I think you should consider opening a savings account with the bank where I have my account. I will call Sharmaji tomorrow and ask him to get the forms.

Rohan: No way. I would rather go to an H*** Bank or an I****. They have ATMs all across the city.

Dad: Sharmaji is the manager of the branch and we are good friends. I can call him any time and ask for his help and advice.

Rohan: I wouldnt go to a bank to make friends dad. I would rather go to one that offers phone banking, net banking

The above-mentioned characters and their conversation are fictitious. Any resemblance to a recent ad by a public sector bank is purely coincidental...

yet the thought behind it comes out clearly. Public sector banks (PSB) in India, that have a 70-75% share of the banking sector (in all aspects including advances, deposits, market share, size, reach ), have a problem. Problem pertaining to their popular perception. The major disadvantage that the PSBs face vis--vis new generation private as well as MNC banks is technological backwardness, lamented Anil Khandelwal, ex-chairman of Bank of Baroda in an earlier interview to FE. This is largely because they have not been able to establish an emotional connect with the youth, say analysts.

Little wonder that PSBs have, over the past couple of years, made a concerted bid to don a new persona that is more in sync with the times. Most of them have made aggressive efforts in last few years to set up core banking networks, internet and mobile banking. While they continue to have large branch networks, their ATM count has also increased considerably. Thanks to the regulatory compulsion of compliance with the Basel II framework, they have invested big bucks in improving risk management capabilities, especially credit scoring models and databases to manage operational risks.

Says MV Nair, chairman and managing director, Union Bank of India (UBI), The time for new-age banking has arrived. The customer profile is going to change, the expectations are going to change, and therefore, we need to position ourselves accordingly.

The banking environment in India is expected to change dramatically when the Reserve Bank of India announces its decision on allowing greater play for foreign banks next year. Against this backdrop, the rebranding exercise is expected to offer these banks a fair advantage in the context of mergers, acquisitions and market consolidation. Like Khandelwal said in the earlier interview to FE, By improving the capital base, by developing marketing skills and customer service and by making a conscious effort to expand globally, the PSBs can maintain their leadership in the new environment.

The ball was set rolling by Bank of Baroda (BoB). About three years ago, it changed its logo and signed on then captain of the Indian cricket team, Rahul Dravid. The new communication focused on how its services have changed keeping in mind the changing needs of todays consumers. The makeover of the external facade of the bank was completed in 53 days flat and the new brand was launched in June 2005.

A senior brand analyst, who doesnt want to be named, says, Prior to the rebranding, BoB had very limited top-of-mind brand recall. In the first 45 days of the launch of the Rahul Dravid campaign, the bank enrolled 12.6 lakh new customers and mobilised Rs 650 crore worth of new savings account deposits.

I have always believed that branding alone is never enough, says ex-chairman of BoB, Anil Khandelwal. It should follow a customer convenience package. Talking about the BoBs rebranding exercise, Khandelwal says, Id thought the introduction of the new logo that replaced the 100-year old logo would create a lot of turmoil within the organisation. Interestingly, the acceptance of the new logo, the Baroda Sun, by the staff was very positive as if they were waiting for the change.

Canara Bank followed suit and changed its century-old logo. The earlier logo had a traditional motif, comprising a hand holding a flower. That was replaced by two interlinked triangles. The new brand identity, designed by brand design firm Ray + Keshavan, aimed to depict how the customer and the bank are inextricably linked.

Even older banks including Jammu & Kashmir Bank, Catholic Syrian Bank and South Indian Bank have gone for a fresh coat of paint. For its part, the State Bank of India (SBI) has aggressively pitched its offerings to the consumer with a high decibel advertising campaign launched on television a couple of years back. Not forgetting that Indias third largest private sector bank, UTI Bank, had to go for a rebranding exercise last year (changing its name to Axis Bank), but for a different reason altogether.

Interestingly, Khandelwal was the first one to bring on board a brand ambassador for a PSB when actor Juhi Chawla was roped in for Dena Bank in 2004. The very next year, Khandelwal, as chairman of BoB, signed up Rahul Dravid as banks brand ambassador. And it goes without saying that most of the marketing communications for PSBs that are trying to change focus on technology upgradation and new services to establish a connect with the next-gen consumer.

Now its the turn of UBI to don the war paint. And it has done the job with help from Mudra Group, Boston Analytics and Infosys. While it is estimated that BoB spent around Rs 20 crore for its rebranding, UBI has invested Rs 75 crore in the makeover exercise, with close to Rs 3 crore going into doing up the logo.

Ashish Mishra, chief strategist, Water, the design unit of Mudra Group, which has designed the new UBI logo, says, In a pan India study, we examined the good things we could build on, for the brand. The earlier logo was perceived as old and had a socialistic undertone. The younger respondents appreciated the relationship aspect in the new communication, built around goodness (good people to bank with). It sat well with the growing need to be involved with their financial planning and wealth creation.

The Union Bank makeover involves integrated transition in processes, systems, employee orientation as well as customer experience, adds Mishra. Some of it is still underway. There will be a sequel to the pre-launch research that will track the new brand experience using the same set of parameters.

UBIs new logo contains two interlocked Us. Mishra explains, The logo conveys the union interlock. Its about leveraging the heritage of goodness with the new customers need for partnership. The two Us are the representation of the customer and the bank who co-create the solutions.

Not everyone is impressed though. The chairman of a state-owned bank, who didnt want to be identified in the article, says, Indian banks are recognised more by the names than their brand images. I would rather utilise the banks money to improve staff efficiencies and the overall range of services than pay up huge sums to an advertising agency.

He has a point. What will finally make or break is customer experience. That will really separate out the men from the boys.