Brand! Brand!! Brand!!! That’s the new shout that’s been a rising crescendo in the past couple of decades in India. Brand awareness has consumed the consumer psyche considerably and ushered in a new era of demand-supply dynamics. However, the word brand in any conversation at large, be it in the classroom or otherwise, has implicitly revolved around the typical FMCG/consumer durables/apparels and other such “goods” for everyday consumption. These physical, tangible, truly interactable brands indeed have a great impact on the minds of the consumer.
Yet, the challenge of brands that are invisible, intangible and have the potential to offer a different experience with every interaction finds its place most where consumer dissatisfaction is discussed. Yes, the “services” industry, which economists portray as being on “top of the pyramid” of an economic evolution, is still a long way off from this branding phenomenon. While the hospitality industry has been able to create higher brand awareness, sectors like banking and financial services, healthcare, and education are still finding their feet in the brand market.
In India, the services sector has been on a rapid growth path combined with a continuously evolving regulatory mechanism. While the healthcare and education space is changing from a fragmented and unregulated sector to a structured and regulated environment, the banking, financial services and insurance (BFSI) sector has been moving from a closely and tightly government/RBI-regulated mechanism to a rationally governed regulatory mechanism with multiple regulators specialising in various financial verticals. Capital and pricing, which were tightly controlled, have now moved towards becoming a function of international standards, global challenges, profitability and internal capabilities of the individual organisation which, in turn, has been reflected in the bottom line of these organisations.
In this rapidly changing and dynamic environment of the banking and financial sector, the Indian consumer has witnessed a new milieu of service expectations and benchmarks. One may argue that it is a natural outcome of the last two decades of going global. Probably yes. But a few things that these financial organisations and institutions as well as their customers cannot deny are that the same undifferentiated products and services have started looking different. The rules of the game are changing for both the buyer (customer) and the seller (financial institutions).
Slowly and surely there is a distinct difference in the way these sellers are attempting to position themselves. From the complacent, be thankful ‘we’re here’ attitude, a range of emotions such as “long-term relationship” and “how can we make it different for you” have emerged. The transaction-based approach has given way to relationship management and customer engagement. So the BFSI marketer is facing new challenges on how to increase the perceived value of his brand.
Peculiarities of the BFSI segment: Governed by common regulations, high transaction costs, thin margins/spreads and personalised service requirements, several unique arrangements have evolved within competitors who maintain a permeable yet mutually exclusive relationship with each other.
- Due to the heavy cost of infrastructure and technology investment, there is a tendency for competitors to pool resources, be it the banks’ ATM network or the registrar and transfer agents.
- Another peculiarity of the BFSI segment is that they piggy ride on each other’s distribution network and customer base. Banks having the largest network of branches, other players such as the asset management companies (mutual funds) and insurance companies leverage on this network while the banks in turn seek to add value to their customers by providing holistic financial solutions and gain from these fee-based activities. Hence, in this game of mutual back scratching, the ultimate gainer is the customer.
- On the other hand, the internet has revolutionised the lifestyle of a generation from convenient shopping to tax payments to making investment in various financial instruments of the various organisations and utilities payment. Technology has redefined the pathway for banks to integrate financial services beyond banking.
- With the advent of fast-paced changes in technology-driven services, and in the new battle lines being drawn to offer better and faster services, newer challenges have emerged in attempting to keep the customer engaged. Hence, large investments are made in customer-education exercises, which not only enriches the concerned organisation but also its competitors and the sector at large.
- Yet in all this, the key differentiator would be the personal touch which is a direct outcome of employee/intermediary engagement.
Against this backdrop of multipronged peculiarities and anomalies as compared to other sectors, the agenda before the BFSI marketer can be broadly classified as under:
- Catching maximum eyeballs
- Becoming a one-stop shop for all financial needs
- Keeping the customers engaged
- Bringing consistency to touch points
- Getting the customers to recommend their bank or financial services company to others
Getting maximum eyeballs: In a market of cluttered and undifferentiated products and facilities, getting the maximum eyeballs is every marketers dream. In the context of a large clutter of products and advertisements which highlight the obvious attributes, like safety, security, trust, and long term relationships, capturing eyeballs is critical. More so in public sector institutions where these attributes come in standardised capsules. Hence, the challenge is to use various media to gain maximum eyeballs. The colour, caption, copy, visual and jingle all need to highlight the brand distinctly. The look and feel has to instinctively relate to the brand and cause the reader to pause. That in itself is half the battle won. Consistent repetition would be the pedestal which helps gain the brand feel. In the FMCG and telecom sectors such techniques are better employed as the presentation could vary from trivia to serious slice-of-life situations.
Yet breaking away from the clutter is not possible with trivia while engaging in financial products. Since the premise of a financial relationship is fiduciary in nature, using trivia as a medium of communication can be a double-edged sword and needs to be employed with great care. Different organisations use different emotions to touch the chord and break away from the clutter. Further, the AMCs in India have to use a disclaimer clause in all media, including electronic. There are some banks who use animated characters to draw metaphors and create stories, while others leverage on the universal power of human relationships.
Becoming the one-stop shop for all financial needs: The endeavour is to move away from a transaction-based relationship to providing financial solutions. This calls for a holistic approach to both customer needs and processes. As a marketer, identifying these articulated and unarticulated needs and incorporating them into the fabric of delivery mechanism is a major factor in marketing success. Moreover, as the BFSI businesses have enormous focus on security aspects and on the individual customer needs, the benefits of technology-based facilities offered by these organisations is many a time not explicit to the final consumer. However, while bringing it to the floor, the customer is required to be engaged in it.
Thus, getting his buy-in for the use of new technology is important to providing him efficient services. An example is the ATM. From dispensing cash to becoming a vehicle of multiple transactions like paying bills and taxes, it needs to be thrust on the customer much against his initial resistance by educating him on the benefits of its convenience. In fact, in the face of such initiatives, it is up to the bank to ensure retention and customer engagement.
Keeping customers engaged: Customer engagement is often referred to stages that customers travel through as they interact with a particular brand. In BFSI products, commencement of such journey is a well deliberated decision, and not impulsive. Hence, there is an upfront commitment from a new customer to a long-term relationship with his bank, insurance or financial services company. This has caused the BFSI industry to place considerable value on nurturing long term relationships with its customers.
Hence, there are many ways for the marketers to keep the customers engaged. These organisations rely heavily on direct mailing and personal interactions to keep the customer interest alive. Although the primary function of such organisations is maximising return on the customers’ investment, the engagement activities for retaining customers are varied. Both online and offline activities are used in the process. In India, the BFSI industry is still evolving and the Indian consumers of this segment seek high emotional engagement with their bank or financial services company. There is considerable family involvement in such relationships and it is visible in the numerous third and fourth generation banking relationships with some of the older public sector banks. Despite the presence of several new generation private and foreign banks, these customers do not easily sever their relationship with the public sector banks that may have helped them establish their first entrepreneurial venture. Such strong emotional connect needs to be continuously nurtured to remain the preferred financial partner.
The BFSI companies are investing in both technology and human resource to leverage on this aspect. From consistent communication through direct mailers to creating on-ground interventions through special exhibitions, road shows and community shows, converting curiosity to business opportunities and conveying an environment of “we touch your lives” is an ongoing journey. Especially since the entire financial sector is evolving, there have been instances of compulsory customer interactions for regulatory compliance. Although critics would say otherwise, the drive for KYC (know your customer) compliance in recent years is one such interaction which necessarily induces customer engagement. The larger benefit for the organisation is that they begin to gain information on the changing profile of existing customers and get another opportunity to strengthen long term relationships.
Again, unlike other sectors where price and product offerings can be customised to make it attractive, in the financial sector with stricter regulations on such issues permits customisation at the product and delivery level but not so much at the price level. Therefore, customer education on the various benefits of product and services is an important means of differentiation and engagement. In fact, these initiatives are not only appreciated but also looked forward to by the customers. While such customer initiatives carry the risk of benefitting the competitors too, there is also an enhancement in the perceived value of the brand. This is because such education is normally taken up by the pioneer or leader which helps it move out of the clutter. It increases the traffic to the website of such organisations and improves the recall value as well as word of mouth publicity.
Bringing consistency in touch points: In the financial services sector, the touch points can vary from the branch offices/other point of sales (POS) of the organisation to its employees, intermediaries and even associates who may be competitors in the normal course.
For example, the ATM of one bank is also a touch point for another competing bank’s customer, and vice versa. Hence, if there is a network problem at such an ATM, it not only impacts the concerned bank but also the other bank’s customer who may be seeking to withdraw money from it. Therefore, the parameters of convenience and location etc. affect the customer of the bank as well as prospective customers from competing banks.
One of the biggest challenges is to bring in consistency and maintain the brand conformance in all respects from the look and feel of its offices/POS to making every customer experience enjoyable. Be it the product literature or news updates, the website of the concerned company or the media where the company advertises, all need to have a connect with the brand. Further, in larger organisations, another mammoth task is to sensitise employees and intermediaries who are interacting with the customers to bring in consistent services. In the recently released BCG report on “Being five star in productivity — Roadmap for excellence in Indian Banking,” it is observed that as against the internationally accepted best practice of 82 per cent bank staff being deployed for customer facing activities, in India only an average of 62 per cent is engaged in such activities.
Some of the other insights the report highlights are
- The next-gen bank branches would need to redefine the roles of their staff based on customers rather than process or product. The layout and space allocation at these branches would impact the branch’s new customer-centric roles.
- The customers are more receptive to suggestions in the first few months of opening an account and thereafter resist calls from the bank. Hence, best practice sales processes would require that the customer is signed up for and trained to use all the alternate delivery channels including internet, bill pay and other convenient and associated offerings within the first few months itself.
Moreover, the continuous change in technology leaves the organisation challenged with not only constant upgradation, but also on how to disseminate the same benefits to its customers using the same. It therefore becomes a 360 degree engagement exercise of both internal customers (employees/intermediaries/other associates) who are the conduit of these deliverables, as well its external customers who are the beneficiaries.
Getting customers to recommend their bank or financial services company to others: The ultimate power of a brand culminates in the comfort of its delighted customers, whose word of mouth publicity can become viral. Any marketer will agree that despite engaging different media to attract eyeballs, the richest reward is when your customer becomes your ambassador and brings in a referral. While this is true for all product categories, in the financial sector, where every customer interaction is unique and standardisation of personalised service is a constant challenge, there is no better seller of your wares than your customer who recommends your brand. The implications are many. It goes beyond brand acceptance and affirmation. The customer is actually saying he trusts you over other brands and is confident that you will continue taking care of not only his aspirations and hard earned money but also of those whom he cares for by delivering consistently to his family or friend. Hence, he is willing to introduce his financial partner to them. It is also pertinent to note that the prospect also relies best on such recommendations which are critical in taking such decisions. All this culminates in brand enhancement and customer engagement.
Branding in the BFSI sector in India calls for new game plans to manoeuvre through the rapid technological obsolescence and the dynamics of a cluttered market with limited differentiation in products and services. The information explosion has thrown up a larger number of informed and discerning prospects/customers. In such a dynamic yet complex market, engaging customers to sustain their interest in you over the long term and creation of champions among customers raises every marketer’s adrenalin.
ABOUT THE AUTHOR
The author is chief manager (marketing), Bank of Baroda. These views are personal. She can be reached at meeradas@rediffmail.com
