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The necessity for a ‘customer first' mindset among bank staff took centre-stage at a discussion on ‘Unleashing the power of customer loyalty' at Bancon 2011.
At a time when a study by McKinsey pointed to a 40 percentage points fall in customer loyalty across cities and income segments between 2007 and 2011, bankers discussed the need to empower the frontline staff and create a sense of ownership and belonging among them so that they can serve customers better.
In this context, they emphasised the need to shift to a customer-centric approach from a product-centric approach. Customers needed to be prioritised, and provided the same level of customer experience, irrespective of the channel used.
Mr Mukesh Malik, Managing Director, CitiBank, explained how a change had to happen at the organisational structure level, to throw spotlight on the customer, rather than the product.
Use of technology by banks structured around product lines was the reason for the skew towards products, he added. Mr M. Balakrishnan, COO, National Payments Corporation of India, said that by leveraging technology, banks can graduate from using core banking solutions to using CRM (customer relationship management) solutions. This would help banks know what exactly the customer is looking for, even as he just walks in, he said. A rejig of the IT organisation structure to capture information about customer needs and requirements in ‘one place' irrespective of whether he uses the branch or the ATM or the Internet was also agreed to be necessary.
As “acquiring a new customer costs six times more than retaining a customer”, banks also have the need to improve customer loyalty by segmenting them , felt Ms Usha Ananthasubramanian, ED, Punjab National Bank.
A segregation of customers into existing customers, financial inclusion customers, mass affluent and generation next customers would help banks switch over from a financial services provider to a financial solutions provider, she added.
Finally a case was made for simplifying products and cutting down their numbers while doing whatever little they did. Bankers drew a parallel to Muthoot Finance, a company that grew big, with only product offering, gold loans.
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