India has become a hot destination for global banking majors. Piercarlo Gera, global managing director, strategy and management consulting, Accenture Financial Services, speaks to FE?s Kumud Das about the strategies Indian banks should adopt to remain globally competitive.
How do you see the growth momentum in Indian banking industry?
If you see those markets that were not affected by the global financial crisis much, you will find countries like Canada, Australia, Brazil and of course India. India is an interesting space in the global banking industry.
A large chunk of the country?s population have remained unbanked, which gives an opportunity for banks to make their footprints there. They have got an advantage with capital position. Among the emerging markets, this is a tier-I growth market. Mexico is another country which is doing well, but less than India and Brazil. I see a lot of interest from major multinationals to enter Indian market because of its growth perspective. So, there is strong interest, but we have to see how the new regulations will make it happen.
Post global financial crisis, do you think that European and US-based banks are in a position to expand in overseas markets?
Just a few European and American groups have got the capital strength to expand. Banks choose countries that have the highest growth prospective. So, India and southeast Asia are preferred to eastern Europe, which is expected to have lower growth rate.
What more needs to be done to take Indian banking to global standards?
First of all, the country?s local major banks have better size to expand abroad. Consolidation in the sector will help those Indian banks that plan to go abroad. Also, it can support Indian corporates going abroad. Key topic on the agenda being that how do you evolve with service model so that you can serve your customers better.
Globally, the name of the game is about multichannel distribution. So, the customer is served not only by the bank branch, but also by mobile phone, web and the social media. For instance, Bank of America is active with Twitter-based social media. This will help differentiate banks in the eyes of the customer, particularly in countries like India where cellphone is much in use. The issue is how do you make cost structure more variable.
Where do you see the Indian banking industry in comparison with global banks in terms of technology?
In terms of technology, I think international banks are investing a lot in multi channel digital distribution. It includes web channel and mobile phone. Also, they are investing in customer relationship management (CRM) technologies. I expect this to be an area of focus in India too. It is important to combine investment in technology with investment in learning space (training and education of sales force), so that the people in branches can use CRM tools effectively.
There is a current debate in India whether to give banking licence to the industrial houses. Your view?
I think what is important in the banking sector is to have players with a solid business model which can meet the needs of retail and corporate customers as long as checks and balances are there and there is no systemic flaw.
What is Accenture doing for the banking industry in India?
Accenture can help companies evolve their business and operating models. In India, customer experience is going to be the key differentiator. We did a research on it with 11 banks, including three government-owned banks, five private sector banks and two foreign banks in India.
The research was around customer experience across banking channels. We found that branch continues to be a key channel. We did a lot of inclination on customer in context of using mobile channel for servicing. Seventy per cent of customers said they will leave a bank due to poor servicing. We are working in areas like defining customer experience, CRM, HR consulting, analytics (datawarehousing), risk management and technology. Our future plans is to focus on m-commerce which is still evolving and is set to take banks to the next generation.