Keeping it simple is a mantra that seems to be paying off these days, not just for India Inc but also for the Indian banking sector. At a recent function, finance minister P Chidambaram, too, had stressed the need to keep financial products simple so that investors could easily understand them. It?s not surprising, therefore, that the winners of FE India?s Best Banks 2007, a detailed number-crunching exercise carried out by Ernst & Young for this paper to throw up the best, are those which stuck to their knitting, and excelled in good, traditional banking, with products and services focused well on their customers. Top executives at some of the winners like Axis Bank, Deutsche Bank and Canara Bank had clearly stated that growth was critical, but would not be their ?be all?. So, while banks with aggressive growth plans grab headlines, the top rankers here have essentially stuck to their core competence and emerged stronger for it. Organic growth, rather than leveraging the balancesheet to acquire and decorate numbers, has generated the desired results. Bank of America, for example, prefers to keep a zero non-performing asset level. Other winners have concentrated on a strong current and savings account base, access to low-cost funds and also retail investor relationships. However, old-fashioned banking does not mean a return to the days when one had to collect a token number and wait for an hour to collect one?s own money. Technology has been actively used by these winning banks to reach out to clients and expand their base. Axis Bank, for instance, offers terrific access along Mumbai?s Western Railway local line. Other banks have also found new ways to generate loyalty. Some state-run banks have repositioned themselves on customer friendliness and rid themselves of their stodgy old image.
This year?s rankings also show that banks considered mid-sized not so long ago are now coming to the forefront, and challenging the bigger names. A focused, customer-centric and technology-enabled approach matters more than size. More competition on these parameters is good news for the customer, who is beginning to experience never-before service levels. As the industry devotes enhanced attention to inclusive banking, which is the need of the hour, all this consolidation of foundational strengths will stand it in good stead.
