The Hindu Business Line : Kerala: Study disputes popular banking notions

A study on `Customer expectations from retail banks' done in Kochi has shown that today's customers are not loyal to one bank any more. Aware of the intense competition, they would like to cash in on the best product and service available.

The below-40 age group, in particular, prefers to shop from bank to bank for identifying products and services of their choice, according to a study by the School of Communication and Management Studies (SCMS), Kochi, under the guidance of Prof Philomina P George, Faculty Member, Finance.

In less than five to seven years, the new generation banks along with few foreign banks have changed the tone and tenor of banking in Kochi and elsewhere in Kerala, the study said. The Finance Forum of SCMS surveyed 750 bank customers in the age group 22-68 in Kochi during the third week of September.

The respondents were retail customers doing business with 38 different banks. Both private and public sector banks were covered.

Of the 750 respondents, barring a small minority (less than 10 per cent), most seem to have taken a fancy to multiple banking. Some of them bank with as many as five banks. Apparently no single bank is able to meet their requirements.

Some customers of the old generation private sector banks and most of those of the PSBs, excluding SBI, have seen their loyalty split. `Anywhere' and `Anytime' conveniences are doubtless finding many takers, especially among the younger generation.

In any category of banks, the overall satisfaction level with their most preferred bank was found not to exceed 86 per cent. The dissatisfaction was pronounced among Government employees who mostly bank with PSBs. Some of them felt disappointed with the policies and practices of their banks.

Modern banks are not fully free from criticism either. Some of the customers are fed up with the aggressive marketing strategies, especially of the new generation banks. They feel that they should not be put under such persuasive pressure to adopt a new product or service.

With regard to the delivery of banking services, foreign banks are rated as the fastest followed by new generation banks other than the SBI group. In terms of customer satisfaction, foreign banks were rated as the best with no trace of dissatisfaction. About 29 per cent customers of PSBs remain dissatisfied with the type of service offered.

In the customers' perception, an ideal bank "is customer friendly, provides good product variety and offers excellent services at the convenience of the customer". And, there is a great deal that customers expect from their banks.

The study found that the bankers are not appropriately capturing the various dimensions of changing customer expectations. Customers have a wide variety of choices in selecting banks; by opting for multiple banking, they are able to align their expectations with different services provided by different banks.

Retail banking is very dynamic and competitive and its survival and sustenance will largely depend on how far banks are able to deliver value products against the changing expectations of the customer.