As an outcome of many scams, the custodians of your wealth have fallen from grace but that is not the main reason why they cease to be brands in the truest sense. In a classic case of Marketing Myopia, banks have focused simply on making money grow without giving due attention to enhancing the economic potential of clients, preferring to pamper them through unconnected gratifications.
Operating in a serious industry, organised scams have a tendency of having a rapid ripple effect, so what happened to PNB and UCO Bank does create a layer of uncertainty over the entire industry. Quite like Healthcare and Insurance where the basic desired outcomes are not just common but regulated as well; affecting every single brand in its wake. The core products across banks are arguably similar, with credit cards, loans and account types easily replicable by any intelligent competitor, higher rates of interest not sustainable from a long-term perspective. Even the customer service protocols – traditionally brick-and-mortar and increasingly online – are a function of industry practices, innovation rarely applied in a scalable sense. All of the above lead to a viable foundation for the commodity story, brand choice a function of historical patronage, comforting familiarity and high pain-point of switching.
Thus, the opportunities for differentiated brand-building come from the holistic customer experience, the fulfilment of higher-order need states through advisory to the more short-term transaction elements. This is exactly where banks have missed the plot big-time by approaching a clonish relationship management approach relevant for a time far different from ours. In the late 1980s or early 90s, very few Indians were above-board ‘wealth’ material in the private banking system and even to them, the opportunities to add value were limited in a regulated environment without today’s investment windows. So, it made perfect sense for a live theatre or single-malt tasting session to be the icing of the association, especially when such privileged opportunities were rare in India. Banks would struggle to do more to build wealth, so these surrogate invitations became the default source of bonding, tapping successfully on an age-old India insight of entitled privileges. I remember personally encountering a couple from Mumbai in the Sound of Music tour in Salzburg, who honestly placed greater value to the front-row seats in NCPA for a local version presented by their premium bank.
In 2018, however, when the routine for building relationships is still restricted to theatre and dining, it is dangerously against the interests of building a differentiated brand. For one, there are many industries offering such bespoke entertainment, including liquor, hospitality, airlines and even automobiles; also its relevance to a category like banking is questionable. Secondly, the Indian today is way more exposed than his predecessor from 1990 and will not be charmed easily by such invitations, enjoying the single malts being served but not thinking higher of her banking partner. Most importantly, as the management and enhancement of wealth is today a complex subject with many kinds of advisors, the bank must add significantly to the party to stand out. By sticking to archaic experiential differentiation, banks are veering towards commoditisation rapidly, be it at the high-potential top end or the emerging starting accounts.
To restore their credibility as genuine differentiated brands, banks must approach their product as an interactive experience, creating aura around it, just like the airline or even the hospital. The primary objective of which is to significantly enhance the professional or vocational worth of the customer, eventually leading to greater incomes which must be grown judiciously. Just as every value-addition of a hospital is connected to physical wellness, the bank must focus its engagement programmes on economic wellness through networking, interactions and initiatives. It will start from the product design, continue to interaction experiences and reach its crescendo in the relationship value-additions, banning theatres and wine-tasting while embracing forums for professional growth. When the primary partner in money helps you and your family to make more money that will be the beginning of a genuine differentiated brand.
The Indian banking customer understands three sets of banks, the nationalised, the Indian private sector and the foreign bank, each with their set of notional virtues and vices. While the first category strives valiantly to compete with the others for the high-end customer, a blind emulation of customer management practices is inevitable, while the second and third are equally blindly following global templates without an Indian context. The industry at large must invest heavily to understand the new Indian customer and her choice of preferred affiliations, invariably people who add relevant worth and value to their chosen purpose, not shallow clones. Unless sorted shortly, Paytm Money and their emerging followers may take over consumer banking from the legacy players by smart consumer insight, catering to the increasingly-influential youth customer.
Due to conventional thinking in the construction of brand experiences, Retail Banking in India is becoming a commodity industry with the extravagant marketing efforts truly in vain, as they are not backed by modern brand thinking. The industry needs to reboot and understand the consumer from scratch to re-craft the world of banking, from a view of the future and not legacy.
(Shivaji Dasgupta is the Founder of INEXGRO Brand Advisory and can be reached at: firstname.lastname@example.org)
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