NEW SURVIVAL CONCEPT OF BANKING

NEW SURVIVAL CONCEPT OF BANKING
Topu Joishe & Ajoy Paul
Management Trainee – 2011
AB Bank Limited

Business of Bank has become more complex and risks inherent with all their activities. The unhealthy competition, the incremental percentage of nonperforming loan, product and clients hijacking by competitor, liquidity crisis, and unstable growth of Banking Industry makes it to rethink whether it is in the right track. It’s time for the bank to go out of the box and reshape its business strategy by Collaborative Marketing effort to get the first mover advantage.
More or less, every banks are giving same services. having same kind of products, policies and regulations are also similar (BB guideline), they should follow almost same interest rate, Then why there are dissimilarities while collecting Deposits, dissimilarities in providing Loans and most vigorously, why there are dissimilarities in NPL or NPA among Banks? Is that some Banks are very well managed and some are not? Some are having talented personnel and some haven’t? Some are very much accurate in forecasting and some are not? Some are credit Guru and some are not?
The bank that best addresses and anticipates customer’s needs, delivers consistently higher quality service and connects to the customer via their horizontal channel can win in the long run. For Banks, Sustainability is one of the main Focuses, but in the present days, Banks are losing their Glamour for the unhealthy competition among Banks and sustainability becomes a KEY question. We believe, All Banks are same. Every Bank should participate in the economy EQUALLY. For this reason every Bank gets the equal right to make profit, wealth and by participating in the economy equally, they should ensure their sustainability.
Firstly, Bank should start serving the Sample of the Nation; here sample means “Family”. We should take a turn from INDIVIDUALISED service to “Full-fledged FAMILY service”. We will serve the FAMILY of the clients and not only the Individual. Today concept of Banking is to serve the individual person. We are providing Loan to an individual who has an income source, taking deposit from an individual who has surplus money. We should come out from that individualised service and should provide A Package/Bundle services to “Family”.
How is it possible?
Just think about a Family which keeps their Savings with us, pension/PF money in the form of FDR/DDS in the name of himself and other members of the family, having a monthly deposit scheme in the name of his wife/children, education scheme for higher study of children, Marriage scheme for daughter, Brother or relative of those clients who resides in abroad can also maintain FC account in the same bank. Foreign remittances coming through banks to their family members back at home. That same Family needs Auto Loan, Education Loan, Consumer Loan, House Renovation Loan etc. If We can make them believe that we are your “Family friend” and we are with you in your well and woe, This Family banking will have a greater and stable effect. At the same time the Magic of Zero NPL will come into force. The word “Defaulter” “NPL” will vanish from the banking sector. Because, we are banking with our own Family and we know the INS & OUTS of the Family, similarly the person will consider it as disgraceful to be defaulter, As the Bank is no one else then his/her own Family Member. so there is less chance that our Family will get default. The bank also provides insurance coverage to that product from which client gets benefit in future. For that purpose bank can Co-brand with insurance company. The car that a client purchase from Auto loan facility can also come with that policy. The insurance company will also invest its fund in Bank. As insurance company co-brand with bank, it will create a new merger of bank and insurance company in future.
Sustainably ensured, as insurance companies merge with bank with new fund and Generation after Generation family member will Bank with us. We are taking care of their Child, their Education and Their habitat as well as secure their life. We will be able to have that emotional attachment and will be able to create that dependency/bonding that The Families itself will ensure the Sustainability of the Bank, and never leave the hand of the Family Friend (Bank).
Subsequently, All the Banks will have some Families in their grip and they will be giving a full-fledged Banking Service to the Families. If a Bank is having 2000 families to serve, that means all the banks will get equal opportunities to serve and profitability will be ensured from serving the Communities/Families.
Banks will ensure their profitability/sustainability by participating in the economy through “V effect” (winning effect). Extreme profit making and extreme Loss from Bank’s end will not take place. Banks will be family oriented and there will be no way except ensuring “Service Excellence” for the Families.
“Serving the country equally” comes into Feature of a Dream Bank which will serve the Economy and the country as a whole. Family Banking will ensure Dual Perspective (Individualized Service through Family & Stable Economic contribution from every bank) Equal & ultimate service to the segmented Families (Samples) together will ensure the service to the Nations.
If bank is a service industry then obviously we serve the nation but the Sample (Family) first.