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.