M. Nazeem A. Chowdhury earned his MBA from IBA (Institute of Business Administration) Dhaka University. He is a very promising banker and a confident and concise communicator. He is now heading the consumer banking division of EBL (Eastern Bank Limited). Though he started his career in PC Quest Bangladesh a pathfinder magazine and joint venture with India. He later became a corporate executive by joining Beximco Pharmaceuticals then Alico and finally settled in EBL.
“Our indicators vary within departments and business units. Nevertheless, we are unanimous in our desire to measure effectiveness through customer satisfaction. We do not strive to simply satisfy, we want them to be content with our services.”
THE RETAIL ROUTE
Focusing on the
“Retail banking is detail banking” – is the theme our Managing Director and CEO, Ali Reza Iftekhar postulates. I simply try to follow his ideology. It is the most befitting explanation to describe retail or consumer banking. There can be such a diverse and vast number of products and channels for so many segments of customers; yet “relationship” plays the core role to ensure sustained business growth. Individual Customers remain at the core of our space, whether their banking need is served through Corporate banking, SME banking or Consumer Banking; this dynamic makes everything intertwined. Retail banking is gradually becoming the centerpiece of banking.
I believe that the risks in corporate banking are much higher because a few hundred people dominate the market. In retail banking, its disbursed amongst thousands of customers make the risk more distributed. This makes retail banking more dependable factor for the sustainable growth of banks. The Cost of Goods Sold (COGS) concept can also be applied here as well. Banks control the deposit and lending rates to ensure a sustainable profitability over a period of time.
We manage our Asset and Liability portfolio based on approved and established fund management policies. The core challenge is to keep sourcing low-cost funds while managing the core deposit to ensure healthy banking ratios. Eastern Bank Limited (EBL) aligns itself with the idea of quality. As our CEO always points out to us – We do not want to be the largest bank in the country, we strive to be the smartest one.
INVESTING IN INNOVATION
The Way Forward
The days of single savings account serving every purpose, difficulty to obtain personal loans and use of debits cards solely for ATM cash withdrawal are long gone. Customers now want products and services that are tailored to his or her financial and societal needs. The digital age has ushered a time where the customer is very well informed about the digital banking. Technology has become quintessential and in this regard, bankers need to move at a much faster rate to adapt to continuous advancements.
We make tech savviness a priority. And we couple this idea with a passion to try to understand our customers’ psyches. This reflects the fact that our products cater to an individual’s financial life cycle. Products span from junior and student bank to senior citizens. We also have ones that are specifically for women, professional, businesspersons and executives as well.
Our objective is to be a single shop for any customer, be it consumer, SME or corporate banking. Innovation is our strongest foray. We have introduced more than 30 new financial products and services to the market of Bangladesh in the last 7 years. This trend will always continue and expand in the future.
A Change in Customer Dynamics
The financial crisis in Europe creates a greater sense of mistrust between customers and banks. Furthermore, analysts have observed that changing banks frequently has a growing global dynamic; we are becoming an “instant” generation. The shift to this instant culture has created a culture in which a customer will not hesitate to change banks if they find another with the desired product or service. Now the responsibilities of the bank involve predicting the future customer demands, understand banking trends, and introducing the right product at the right time. Customer data analysis is increasingly getting important in our decision-making processes.
Though there is no formal study, we can sense the same behavior in our industry too. Most customers now prefer to maintain their core bank account relationship with one single bank, but their other banking needs like credit cards, personal loans etc. are mostly driven by offers and campaigns around the year. The trend of credit card closure, loan take over has increased manifold in last few years and that is a clear indication of the customer mindset.
The digital future is connected and that involves looking beyond Dhaka and Chittagong. We are becoming a population that is constantly moving and banks need to bring solutions to their customers. Customers no longer wait to get banking solutions from one single bank. Thus, banks that offer interbank connectivity will prevail. Bangladesh Bank has initiated the national payment network concept that will connect banks seamlessly. Moreover, we must move to non-branch banking. It will not only save money but create much greater access to products and services through technology.
INCORPORATING THE UNBANKED
Towards Financial Inclusion
The banking sector is still focused on a corporate approach and we must start advancing by changing this mindset. I understand that the corporate banking sector is significant but the sheer number of customers and their individual and business banking potential makes retail and SME banking even more promising. We need to have a sizeable banked population and reduced dependency on cash in order to increase financial efficiency. Not enough banks are invested in retail banking. Most just have a few selective products for customers. Moreover, Bangladesh Bank has published guidelines for mobile banking and agent banking; this will help bridge the gap between the banked and unbanked.
KEY PERFORMANCE INDICATORS
Setting the Benchmark
Our indicators vary within departments and business units. Nevertheless, we are unanimous in our desire to measure effectiveness through customer satisfaction. We do not strive to simply satisfy, we want them to be content with our services. We measure customer satisfaction at every point and ensure that professional behavior is rewarded or addressed. Furthermore, we conduct regular surveys with them and interview customers that are no longer with us.
Our focus is primarily on innovation with customer retention at the core of all of our activities. We acknowledge when we have shortcomings with our customers and improve upon those matters right away. Customers want a bank that is responsive towards their needs and during their time of need. We strive to embody that.