It?s a holiday and you?ve spent the day lazing around. Evening time, and you want to go for a stroll in the neighbourhood with your wife and, perhaps, have a cup of coffee to relax. Chances are, these days you?d head for your bank for that cup of coffee. Hyperbole? Not really. As retail becomes the buzzword even for banking, your neighbourhood bank branch will gradually turn out to be a favourite hangout for most people.
In fact, such is the potential of retail that even the staid and stodgy public sector banks are wooing the retail customer with a vengeance. The State Bank of India, the country?s largest commercial bank and a virtual financial sector powerhouse, has opted for a massive retail thrust. And Romesh Sobti, India boss of the Dutch banking giant ABN Amro, declares unabashedly that he wants to be a virtual grocery shop among banks: hawking every financial product under a single roof for the benefit of the customer. Citibank, HSBC, ICICI Bank ? you name it ? retail is a key element of the strategy for growth for all of them.
?The grocer is the ultimate retailer,? Mr Sobti says. His bank has tied up with a leading coffee chain so that customers can shop around for financial products even as they enjoy that hot cup of coffee. And the coffee serves a major purpose: it ?engages? the customer, gets him to spend more time at the bank?s branch and hence opens up opportunities for him to shop around for financial options.
In this age of low investment demand and with the trigger for credit offtake proving painfully elusive for banks ? despite the Reserve Bank of India?s best efforts, rate cuts and all ? most forward-looking banks are realising the enormous virtues of retail. Just as a grocer would get you the toothpaste, the talcum powder, the ready-to-make branded popcorn all under a single roof, so too are banks now aiming to provide financial products ranging from banking solutions to mutual funds to insurance in a single sweep. In short, more and more banks are now seeking to become financial advisors for their retail clients. Even if a bank has its own mutual fund, it no longer has a problem hawking mutual fund products of other companies together with its own offering. The message is loud and clear: give the customer a slew of options ? and grab a chunk of his mindspace. And if the reactions of the banks are anything to go by, the strategy?s obviously paying off.
Even late entrants are reporting good pickings. With innovative marketing strategies and aggressive advertising campaigns, these banks are getting massive customer enquiries and feedback, even in businesses like credit cards where there is enough competition. The call centres, banks say, are flooded with enquiries about the latest product or credit card a bank has launched. The game in credit cards, too, is to go down to the basic segment of consumers.
The secret of success is not in targeting the huge spenders who already have several cards. Instead, banks are wooing the first-timers who are thrilled at the prospect of entering the plastic world. Bankers say the trick is in winning over these new entrants, because they are the ones who actually do not mind the outstandings per month, which is the key to success for the credit cards business. This section also gives the required volumes.
As the cup of coffee engages the customer, he may end up picking up an attractive car loan scheme, or even succumbing to the charms of the latest Projection TV in the market, thanks to the consumer loan which the bank is hawking aggressively. Some major foreign banks are even reporting huge transactions for car loans through the Internet, and have aggressively been wooing dealers even in apparently less lucrative markets like eastern India.
Is there enough for all in the world of retail? Most bankers seem to think so. The secret lies in identifying the right customer segment and ensuring you?ve got it right there. And, as retailing and retail banking converge, the customer?s never had it better.