Rupert Murdoch once said "The world is changing very fast. The big will not beat the small anymore. It will be the fast beating the slow."
This just about sums the essence of this blog. What do we mean when we refer to speed? Isn't banking all about taking due care and steady steps? Would not speed give an image to a bank of being reckless? These are the kind of questions skeptics may ask. This blog will attempt to explain and clarify this in detail.
If we look around us we see the world changing at a very fast clip. New technologies, innovations and changes in rules and regulations are making this a very dynamic environment. We also see people becoming more and more demanding. Take for instance travel - most people are very conscious of the value of time and prefer to travel by air as long as the costs are reasonable. No longer are we willing to place an order for some new gadget and wait for it to arrive. Now, we want to only purchase things that are ready "off the shelf".
People want to spend very little time for mundane activities and would rather invest their time in more productive and enjoyable ways. The need for speed in service is becoming very acute. Also, because of the sheer increase in the number of customers, it is necessary to have speed to cater to all customers and improve productivity.
Thankfully, technology has helped to cope with this expectations of customers. Today, we can provide information on the customer account in a matter of seconds - even about transactions done a few years ago. Likewise, using technology we can service most of the customer requirements in very short time frames. The other day I went to my bank to get a demand draft made and was out of the bank with my DD in less than ten minutes!
Speed refers not only to the processing time for customers. It also covers the reaction time of a bank for changes in the environment. Banks who are nimble are able to take advantage of the changes by introducing new products, new processes etc. faster than others. They are thus able to give their customers a better offering in line with the market place changes. Speed also helps the bank to improve productivity, reduce costs and improve profitability.
Getting the "speed mindset" is really a culture issue. It is only when the employees are "clued on" to changes and have the passion to deliver in short time frames that this can be achieved. This mindset has to be reflected in everything that the bank does and should be represented in every employee right from the Managing Director to the last officer. It should be seen in every action of the organisation be it internal facing or external facing. Presence of this mind set should be encouraged and absence should be corrected.
It is true that speed is critical and at the same time, there should be enough checks and balances in the organisation's process to avoid errors. Special care needs to be taken in the areas of customer interface, operations risk and compliance. Even if errors do occur, as they sometimes tend to, the process of spotting it and making corrections should be strong to prevent them from spreading.
Gone are the days when large banks ruled. Today, the successful banks are those who have speed as an asset.
I would love to hear your views on this blog. Please feel free to leave a comment on the blog or send me a mail at vish.sesh@gmail.com and I will quickly respond.
Monday 19 July 2010
Sunday 4 July 2010
Relationship management
Establishing and nurturing effective relationships is one of the key to success in any business and retail banking is no exception to this rule. As a banker one has to maintain cordial and strong relationships with a variety of stakeholders of which the customer, the regulator, the market players, the intermediaries etc. are some of the important ones.
It is not enough to have a great product offering or a very competitive price giving good value for money. Many times it is observed that softer elements like trust, and strong relationship do matter when a decision is being taken. Even if (and especially if) the market is saturated with product offerings which are very similar to each other, customers tend to prefer dealing with the known bank due to sheer inertia or comfort factors. Healthy relationship with regulator / media also comes useful to help iron out differences or issues that might crop up due to inefficiencies etc.
What does it take to build a strong relationship with each stakeholder? The bank has to make an exhaustive list of entities / individuals that it considers as important and take stock of where they do stand. This can be done by a simple internal ranking method based on current level of understanding.
A simple four box matrix of High / Low importance in the X axis and a High / Low relation in the Y Axis can be used and each entity can be plotted in this. Those entities which are high in importance but low in relationship need to be worked on a priority basis. One can even draw out a plan of action based on this matrix in terms of a calendar of activities to be performed.
The next step would be to identify people within the bank who are good at communication skills to take up this role of building / nurturing the relationship. Regular meetings followed with a strong communication plan needs to be ensured.
It is also important to have a "Needs Analysis" done for each entity in terms of identifying what is required to build a strong relationship. Any action taken would need to be based on this analysis. For eg. the regulator could be satisfied if there is a satisfaction that compliance is high in the agenda of the organisation and that internal checks and controls are robust. An intermediary could be satisfied if there is transparency and honesty in the dealings coupled with stability and a focus on increasing its profitability.
From time to time a "Reality check" needs to be done on the status of the relationship by doing a survey or using a simple questionnaire to seek feedback from the entity as to what is giving them satisfaction and what is not and what can be done to improve things further. Even a survey of this form with adequate feedback on the follow-up measures taken can give a positive feeling to the entity as to the sincerity of the bank in improving things.
Relationship building skills is not something that can be easily captured or described in a blog. The attempt here is not make an exhaustive list of things that a bank needs to do. Rather this blog would have achieved its purpose if the importance of relationship building is established in the minds of the reader.
I would love to hear your views on this blog. Please feel free to leave a comment on the blog or send me a mail at vish.sesh@gmail.com and I will quickly respond.
It is not enough to have a great product offering or a very competitive price giving good value for money. Many times it is observed that softer elements like trust, and strong relationship do matter when a decision is being taken. Even if (and especially if) the market is saturated with product offerings which are very similar to each other, customers tend to prefer dealing with the known bank due to sheer inertia or comfort factors. Healthy relationship with regulator / media also comes useful to help iron out differences or issues that might crop up due to inefficiencies etc.
What does it take to build a strong relationship with each stakeholder? The bank has to make an exhaustive list of entities / individuals that it considers as important and take stock of where they do stand. This can be done by a simple internal ranking method based on current level of understanding.
A simple four box matrix of High / Low importance in the X axis and a High / Low relation in the Y Axis can be used and each entity can be plotted in this. Those entities which are high in importance but low in relationship need to be worked on a priority basis. One can even draw out a plan of action based on this matrix in terms of a calendar of activities to be performed.
The next step would be to identify people within the bank who are good at communication skills to take up this role of building / nurturing the relationship. Regular meetings followed with a strong communication plan needs to be ensured.
It is also important to have a "Needs Analysis" done for each entity in terms of identifying what is required to build a strong relationship. Any action taken would need to be based on this analysis. For eg. the regulator could be satisfied if there is a satisfaction that compliance is high in the agenda of the organisation and that internal checks and controls are robust. An intermediary could be satisfied if there is transparency and honesty in the dealings coupled with stability and a focus on increasing its profitability.
From time to time a "Reality check" needs to be done on the status of the relationship by doing a survey or using a simple questionnaire to seek feedback from the entity as to what is giving them satisfaction and what is not and what can be done to improve things further. Even a survey of this form with adequate feedback on the follow-up measures taken can give a positive feeling to the entity as to the sincerity of the bank in improving things.
Relationship building skills is not something that can be easily captured or described in a blog. The attempt here is not make an exhaustive list of things that a bank needs to do. Rather this blog would have achieved its purpose if the importance of relationship building is established in the minds of the reader.
I would love to hear your views on this blog. Please feel free to leave a comment on the blog or send me a mail at vish.sesh@gmail.com and I will quickly respond.
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