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Innovate & flourish Banks are going all out to introduce an element of novelty in their customer service, says Shriya Bubna In July this year, K C Chakrabarty, chairman and managing director of Chennai-based Indian Bank, read Management Challenge for the 21st Century by Peter Drucker, the management guru who believes that business growth and expansion can be best driven by alliances and partnerships, not so much by mergers and acquisitions or new wholly owned outfits. Two months later, on September 16, he was on a plane to Mumbai, to be joined there by B Sambamurthy, chairman of Mangalore-based Corporation Bank, and K N Prithviraj, the chairman of Delhi-based Oriental Bank of Commerce, both of whom, having bought the idea, flew into the country’s financial capital the same day. At a press conference, the three musketeers, hands raised high in the air, ushered in their strategic alliance to stay afloat in an increasingly fish-eat-fish world of banking. At Rs 1,47,079 crore, the total asset size of the three banks is only marginally bigger than the Rs 1,45,267 crore of Punjab National Bank, and decidedly dwarfed by the State Bank of India’s asset base of Rs 4,60,00 crore. Yet, the three together stand a better chance to survive, flourish and, innovate. For, innovation is increasingly emerging as the beacon of hope for most.
While the alliance is all new, innovation has been pervading all types of products and services for some time. Today, if a ship loaded with goods arrives at the Vizag port, the goods can be unloaded immediately, thanks to a technology that integrates a bank’s system with that of the port. Earlier, the unloading took a week. Very soon, a car loan would be a combination of a loan and an overdraft facility. If a customer wants a loan to buy a Honda Accord, Rs 5 lakh would be extended on an instalment basis and Rs 10 lakh on an overdraft basis. “The overdraft process could replace the instalment process in procuring loan products,” says V Vaidyanathan, executive director of ICICI Bank. The paybacks are high in terms of customer loyalty. “If you don’t innovate, you can’t charge any premium on your services,” explains Nicholas Winsor, the head of personal financial services with HSBC India. Two years ago, HSBC gave customers the option of either paying back the loan in equal instalments or making higher front-end or back-end payments. The customer could even decide on the nature of the interest rate — floating or fixed.
HOME Business Standard • November 2006 |
