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“Customers used to feel that the bank was in total control and they did not have any say in the business process... This product offered them flexibility,” points out Winsor. My Terms Credit has come to account for about 90 per cent of HSBC’s personal loan sales. Extending the concept to home loans, the British bank introduced a flexible product earlier this year which gave the customer the option to increase or decrease repayment amounts by up to 15 per cent in a given year. Dutch bank ABN Amro allowed its home loan customers to pay lower interest rate at the initial stage and shift to the market driven higher rates later when the bank launched its mortgage product a few years back. The verdict is unanimous: Innovation creates customer value. “This is especially so in the case of foreign banks, which have fewer branches than a public or private sector bank,” says Murali Natrajan, regional head, consumer banking, India & Nepal, Standard Chartered Bank. A few years ago, Standard Chartered launched Parivaar account, in which individuals could maintain zero balance if the family members collectively kept the minimum balance. Credit cards have seen the maximum innovation, with a plethora of banks offering cash-back offers on various purchases.
A proposed chip-based credit card by UTI Bank would allow merchant establishments such as Pizza Hut and grocery shops to customise offers for cardholders. The SBI Cards-GE Money combine is planning an instant earn-and-burn programme on the Tata card platform, in which rewards points earned on a purchase can be redeemed the next moment for a cup of coffee or a bowl of noodles. HSBC India has all its offers on one core card; the customer needs to carry just the one in the wallet. However, some see limited scope to innovate at the core. KVS Manian, group head, retail liabilities and branch banking, Kotak Mahindra Bank, says there is space for innovation on the fringes. The bank allows customers to buy and redeem mutual fund units online and through phone banking. HDFC Bank allows Reliance Mutual Fund unit holders to redeem units at its ATMs. For its small business and professional customers, Citibank hosts exclusive deals and discounts through service partners such as DHL, Fortune Hotels and Hewlett Packard. Citibank, whose Suvidha account started a decade ago is seen as a landmark, allows electronic transfer of the image of a dollar cheque received from the US instead of physical transfer. With internet emerging as the favoured banking tool for many, banks are beefing up security. The possibilities are endless. The way mobile phone services provider Hutch manages payment made through myriad channels by its customers across 16 circles is a case in point. As the form has been expanding its subscriber base from a growing list of locations and payments are being collected from its own shops, franchisee shops and means such as e-bill pay, Citigroup is ensuring that Hutch’s different collection processes run as seamlessly as possible. However, at this point in time, even the most innovative products remain structured. Soon, we may see on-the-spot innovations by bankers at the counter to keep their customers smiling.• HOME Business Standard • November 2006 |
