The Financial Express

Customers' retail banking insights

In private commercial banks, service quality of branches or branch employees may be measured by the number of customers handled everyday; number of complaints received or resolved everyday In private commercial banks, service quality of branches or branch employees may be measured by the number of customers handled everyday; number of complaints received or resolved everyday

Banking is one of the most sensitive businesses in the world the core value of which is the trust of the customers. People repose trust in terms of money. Therefore, it is imperative that the banks formulate a strategy that makes the customers happy about investing their money in a bank. A well-planned integrated marketing communication plan should be put in place by the bank for brand building and gain customers' trust.

Not only in terms of financial value of money but also in terms of the psychological relief of mind, people always try to choose a bank which is seemingly trustworthy enough or has a proven track record of strengthening the confidence.

Service quality is crucially important for a bank. A satisfied customer is like a living billboard of the bank that is going to places and highlighting the bank's brand image through words of mouth (WoM). Likewise, an unhappy customer does the opposite.

Like in a restaurant, a customer values the food taste; in a bank, the customers' ultimate requirement is the financial services that best fit their needs, not word of mouth nor any sort of motivation through branding and communications messages. Branding and communications bring a customer in but service quality retains him as a loyal and satisfied brand ambassador. When you consider these facts, it becomes flawless and brings success for the bank.

Retail banking is typical mass-market banking where individual customers use local branches of larger commercial banks. Services offered include: savings and checking accounts, mortgages, personal loans, debit cards, credit cards, and so forth.

The banking industry of our country has grown bigger with time. With 59 scheduled banks, over 10,000 branches across the country and more than 92 million people engaged with the banking industry, it is no longer a small industry to treat lightly. On the contrary, with about 42 per cent unbanked people in the country, there lies a huge prospect of retail banking in the country.

With some intensive working experience on campaign planning and activation in a leading commercial bank, I got the opportunity to directly interact with the mass segments of customers of retail banking across the country. Those interactions have brought out some exclusive insights of the small scale customers of the banking industry of the country.

Customers' choice of a bank depends on a number of things; age, sex, social status, geographical location, economic condition, etc. that affect the customers' insights. Again, in course of time, insights of customers change and vary. However, it's important that we know what the customers' thoughts are that drive them to decide on choosing their banking partner.

The insights are quite real-time feelings of non-institutional and small scale depositors and borrowers; and if nurtured properly by the banks, can turn into the basic ingredients for marketing communications of Retail Banking and Business Development. Some Common and widely-faced insights of the customers are discussed as follows:

i. Nearest Bank from Home. This is a commonly felt sentiment of customers. Small businessmen, female customers, housewives choose to open account and transact within the shortest distance from the business/home. They feel the nearest bank to be most secured for banking. Sometimes availability of a bank's service delivery channel nearby home also convinces customers to open account at a particular Bank. Dutch Bangla is a widely known bank by the mass customers for its huge ATM network.

ii. Words of Mouth (WoM). A mediocre characteristic of small scale customers of our country. People trying to open a bank account often rely on words of mouth of relatives, friends, colleagues, neighbors, business partner, etc. This happens when a customer doesn't have enough knowledge on banks as well as banking services.

iii. Known Introducer. Sometimes a customer opens an account at a bank of the introducer of his/her account. In Bangladesh, there are still a number of banks who refuse to open an account without an introducer of the account opener and also refuse to introduce him/her, as the branch employee might not know the customer. Therefore, the customer looks for a friend or any known person having account in a bank to introduce him/her and make the account opening easily done. In this case, customers don't bother about the bank's brand image.

iv. Recognition of the Bank. Brand recognition by various awards, rankings, regulatory authorities, govt. or international bodies plays an important role in customer recall while choosing a bank. Customers always look for a reliable bank endorsed by trustworthy bodies.

v. Branding/Visibility/ATL Activities. Seeing turns into believing. Being a customer of a highly visible bank is a matter of good feeling for a lot of people. It creates a self created personality trait in the account holder.

vi. Emotional Attachment. Sometimes customers consider emotional attachments while opening or maintaining bank accounts. The first bank account of life, father's banking partner, business account, employer of family member/s, etc. irrelevant but sentimental issues often drive customers choose banks for accounts opening.

vii. Particular Service. Particular services like easy LC opening, loan processing, issuing bank guarantee, holiday banking, online banking, 24/7 customer services, speedy and easy remittance services, etc. sometimes stimulates customers open accounts at a particular bank. The customers may know about the services through various advertising communications.

viii. Forced Decision. Salary accounts are opened by the employer's choice; but a customer may continue the account even after leaving that job based on the service excellence of the Bank. Generally, salary accounts are seen discontinued by the account holders fearing the transaction would be interfered by the previous employer who opened the account in favor of the account holder as his employee.

ix. Service Person's Excellence. Sometimes service delivery personnel like Direct Sales Executive, branch employee, manager, etc. are so motivating that customers feel at ease opening and maintaining accounts at the Bank. GP launched a campaign named "kacche thakun" highlighting this insight.

x. Weakness toward Bank's Employee. Customers not only in banks but everywhere, wants the best possible service and compensation for their prices. Therefore, they look for a known person, i.e. friend, relative, etc. that might help them get better service than any other bank can do. Using references is a common nature of people in our country. Having someone as a reference soothes them thinking that would get him/her better banking services from the Bank.

xi. Service Delivery. Like food in a restaurant, service delivery is one of the core service marketing ingredients of a service based organization like banks. Customers are very sentimental about service delivery. A soft hearted and comprehensive service delivery can attach a customer to a bank forever.

xii. Service Delivery Channels. Several options of service delivery channels, i.e. ATM, Credit Cards, Internet, SMS, Locker services, etc. create a feeling of 'convenience in banking' at the customers' mindset. In services industry, customers love to get services at any point of time they need it. Moreover, customers feel better, thinking that he is able to receive required financial service whenever he needs it.

xiii. Sense of Status: Being customer of a large and highly recognized bank creates a sense of status in a person. In Bangladesh, it is not advertised or highlighted in a befitting way, but in other countries, even in our neighboring countries, in India or in Pakistan the fact is highly advertised to the customers; because it is a proven insight of the customers of banks.

xiv. Exclusive Offer: Exclusive offers like free account opening, zero balance a/c, special FDR rate, special loan rate, etc. attract a lot of customers for opening accounts. BRAC home loan, Prime Bank road show offering zero balance account opening, BRAC Bank's home loan campaign named "Apon Ghor" got enormous marketing mileage and feedback from customers.

xv. Bunch of Benefits: This is the last thing that the typical customers expect from any product or service brand. In fact, customers/consumers of a product or service always look for a bundle of amenities in exchange of the price s/he paying. So universally, any customer/consumer choose a bank that offers the best bunch of amenities, i.e. better rate of deposit & loan, lower charges, minimum time consumption in service delivery, total quality management (TQM) in operations, etc.

xvi. Indifferent Account Opening: Opening of accounts with no special attention; for BO account opening, admissions to foreign universities, to encash checks of temporary jobs, etc. people need to open accounts in banks. The accounts are not really maintained as minutely as the personal accounts are maintained by the customers. This happens because account opening is easy and banks don't bother if a savings account becomes less active for a long time.

The insights of the retail banking customers discussed above are not individually unique and mutually exclusive. They vary from one customer to another. But they exist and demand minute attention of the professionals working with products or services or even brand development of banks. Marketing Planning and Strategies should always be formulated according to customer insights of the respective industry. Truth is, customer insights somehow match with the marketing planning done by most of the brands/organizations; because insights are basic thoughts of people which more or less match with the people preparing the plan. But that doesn't necessarily make a good plan; that's for sure. Therefore, it is now a call of time for the banks to make comprehensive planning for tapping the retail banking customers by taking the customers' insights into consideration.

The writer is working with the Mercantile Bank Limited

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