IIPM PUBLICATION
As financial services in the country flourish, banks ride the new crest of consumerism…As 4Ps
Business & Marketing comes out with its annual banking special, one cannot help but muse on the irony that while the entire nation is going gaga over retail, a similar sounding sector has moulded the contours of a revolution that practically everyone reading this article – you, me and the contemporary Indian – is already experiencing... and reveling in. You got it right: Retail banking is the fresh wave of freedom that’s sweeping through our existence, and to pardon a pun, if anybody deserves ‘credit’ for it, the banking colossuses in our land rise to the claim.
Take a look around, and the phenomenon is as evident as it is ubiquitous: from billboards and hoardings on the road to advertisements on the TV set, to a blizzard of displays on the internet and other media, the new-age consumer never had it better, with a veritable treasure trove of innovation-driven financial products and services – international debit cards, credit cards, home loans, automobile loans, personalized loan solutions, 24/7 banking support, internet transaction facilities and a host of other offerings like mobile banking – pervading the imagination, from your porch till your PC! And interestingly enough, the trend of explosive consumerism that the Indian market has been witness to in the last 3-4 years courtesy the banking environment in the country also constitutes among the very factors that have propelled this rapid surge in utilization of banking-related retail products and services. With the 1991 phase of reforms in the banking sector throwing open the market to that dynamic duo the world only knows too well as liberalisation and globalisation, and the subsequent era of economic advancement delivering an unprecedented impetus to the purchasing propensities of the middle and upper-middle socioeconomic strata, more significantly the former, the transition has not just been towards a spending culture that is better equipped, but a mindset that is relatively greater at ease with the notion of credit-based acquisition, incurring individual debt and spending ‘cash on credit’ akin to their Western counterparts., though only a minuscule proportion when compared to that latter as of present-day.
Technology, in its myriad forms, has proved a critical – and now indispensable – resource Spearheading
the retail banking juggernaut and dictating the pace of progress for most. From placing a three lettered acronym (read ATM) at the top of the average bank user’s priority list to ushering in an era of palmtop accounting by converting features like SMS banking into a reality, besides bringing about the advent of desktop access to virtually every amenity a bank may provide, and effecting the inherent reduction in cost, time and labour for both customer and bank alike, the wonders of technology have placed the Indian banking market a notch closer to its advanced equivalents on the other side of the Atlantic.
Clearly, Indian private banking players have not merely lead the pack in defining and executing this customer-technology combine to the extent it has reached today, but have also mobilised the kind of potent advertising outlay and appealing consumer service portfolio that we see prevalent among public sector banks aplenty of late, apart from doling out a dose of tough competition to multinational operators in the country.
Population estimates peg India’s middle-class to lie in the vicinity of 300 million, a staggering figure by any yardstick. Add to that the still much lower level of penetration in the credit, debit and retail loan segments compared to the saturated marketplace of the West, and bank players have only just begun scraping the surface! With a consumer that is as willing to embrace retail products/services as he grows increasingly in discernment, the ambience is only set to present itself better. The challenge then, will entail a battle for cutting-edge service supremacy where only the best in the industry sustain. And hackneyed as it may sound, when it comes to banking & consumerism, all the consumer desires is the double-delight of comfort ‘n’ convenience!
