Banks Must Focus More On Customers

Mumbai, November 27: | Updated: Nov 28 2002, 05:30am hrs
Banks are yet to adopt a purely customer-centric approach in the country and the approach remains more focussed on products offered by banks. Banks are now talking about moving to a consumer-focussed approach in banking.

"Banking today is still function-centric and not customer-centric. In a customer-centric model that we all are aspiring to move to, employees will handle entire relationships and not specific products. This will result in deeper relationships, better cross-sell ratio and increased income from customers," said UTI Banks vice president (retail marketing), Hemant Kaul speaking at Bank.net- 4th international exhibition and conference organised by Exhibitions India Pvt Ltd.

The key to success of this model would be to give clear ownership of accounts to relationship managers as well as incentive and disincentive mechanism based on measurable performance parameters.

Also speaking at the event, Web Logic Corporations vice-president business strategy, Ravi Goel mentioned that inconsistent customer management processes, uneconomic sales and service model and insufficient sales force in terms of skills and time are the biggest value destructors for banks. On the other hand, segmentation of customers by value and not size, correct gauging of profits from each customer and resultant service differentiation by value are the key value generators in business. Citing the example of his companys experience with UTI Bank, Mr Ravi Goel said that the value creators can be strengthened with the help of appropriate technology.

"Most entities in India are certainly customer-focussed, however, what is missing totally is the focus on customer relationships. The focus of banks has to be such that they take a 360 degree view of the entire relationship each time there is a contact with the customer," said PeopleSoft India product specialist Ram Subramanian.

Mr Subramanian also added that customer relationship management (CRM) is not a technology solution, but a business strategy. This strategy should be owned by the organisation. Technology is just a tool to help enhance efficiency and performance of the strategy. "It is important that we remember that technology is just a facilitator and not the business," proclaimed Mr Subramanian.