What are current trends in retail banking?
The entire financial services industry is undergoing drastic changes. New technology, increased regulation, and expansion of digital channels have come together to create a really interesting time for retail banks. Customer demographics is changing due to change in priorities and behavioral change. Customers’ expectations are growing. Digital mobile wallets, contactless payment cards, innovative transactions and customer analytical driven services are the future. Banks need to do even more to ensure they are well-positioned to succeed in the future. Retail banks should focus on developing a customer-centric business model optimizing distribution, simplifying business, and working on big data to understand customer analytics and enabling innovation and managing risk, regulations and capital. Banks are using data to analyze the customer experience and look for opportunities for growth. Retail banks need to adapt to this movement or be left behind.
How will retail banks compete with FinTech? Will Fintech replace retail banks since peer to peer lending is taking a big share of retail banks in the global market and what is the prospect of p2p lending in Bangladesh?
The Economist points out “No Fintech product comes close to matching the convenience and security of a current account at a bank”. So, banks can team up with Fintech to offer most exciting values and experience for customers. Paym and Paytm, digital payment wallets, are the burning examples that denote that impact of a handshake between banks and Fintech. Bank products comparison sites are evolving in Bangladesh and banks are teaming up with these platforms. It is true p2p lending is eating up the pie of the cake in some markets, while some banks also tied up with the p2p lending platform as an investor and with the leverage of technology, banks can extend loans through p2p faster as p2p risk underwriting framework is highly efficient. So it is not just technology that is changing, disruptive business models are also emerging. Importantly, banks have to manage security, culture, and rules and regulation while teaming up with Fintech.
According to Boston Consulting Group (BCG), by 2030, 33% of Bangladesh will belong to the middle-class and this will change demands. What services are you creating in order to cater to this shift?
Yes, this is surely a good sign and insightful landscape. Retail banks have a huge space to enhance the net to bring new customers on board by offering innovative solutions. We recently launched OBL Shopnoneer – a home loan facility for semi-urban areas and this facility is offered to build ‘semi paka/tin shed’ building as a good number of customers fall into this category, those who dream of a home within their financial capacity. We launched Loan for Bankers as a lot of fresh graduates are joining banking sector and this sector is expanding rapidly. We are offering product line for student banking.
Could you elaborate upon your Customer Relationship Management (CRM) policy?
We relentlessly strive to improve our service level all touch points covering branches, kiosks, and contact center. We have implemented Business Activity Tracker for business teams which cover tracking customer business calls, deals under pipeline and closed deal managed by Relationship Managers. We can track the business activity of retail business team through this real-time CRM.
According to PWC, the top three priorities for Banks in our region are enhancing customer service, R&D and innovation and new product development. What are your thoughts on this observation? How are you creating a more customer-centric business model?
We take regular customer feedback trough customer meet program and customer satisfaction surveys run by the call center. Based on customer feedback, we address the issues and offer new products and value proposition. We also run customer loyalty programs for high-value customers. We run various campaigns for customers and employees. We run idea generation contest for our employees to come up with new value propositions. We are matching product attributes to customer behavior, and pricing them accordingly that can help capture these previously underserved or not served segments.
Tell about your most successful products and any other future products that you are going to release.
We have launched a couple of new products and we have received a tremendous response in 2 depository products. We have made significant momentum with our Home Loan product and our home loan portfolio occupies 65% of a retail loan portfolio. In concern with deposit product, we offer Quick Millionaire and Pyramid Savings. Quick Millionaire is recurring deposit scheme with an initial deposit and it offers customer options to have Tk 10 lac in the minimum tenor of 2 years. Pyramid savings is a combination of savings and recurring savings deposit. The customer can deposit in this non-checking account any working day of the month and can get a good return after a specific period selected by the customer.
* Fig 02-05 courtesy of ‘Retail Banking 2020 Evolution or Revolution?’ (online version) from PwC Retail Banking 2020. www.pwc.com
