Muralidharan R., Chief Operating Officer, Dhanlaxmi Bank, on how the bank is gearing up post RBI’s permission to allow new banks. Muralidharan is responsible for operations, technology, alternate channels and customer service delivery at the bank.

[Q] What are your views on RBI’s permission to allow new banks to open for business?

[A] This has been an interesting move by the RBI. We think that this will open up the market and not merely increase competition. The insurance sector in the country has been a good example. Some years back, Life Insurance Corporation (LIC) was the only strong player in the insurance market. Nobody thought that there would be a huge market for insurance until many private players entered the business.

Look at the last round of licensing that took place in the banking space. The new entrants at that time took at least three to four years to gain market share. These new banks either build niche businesses or took the acquisition route by picking up a small-sized private sector bank. This will be repeated in the new licensing process as well. These new players will bring in innovation and new technologies.

[Q] How are you reworking your business strategies to safeguard your position against new competitors?

[A] We are a born-again bank and have created everything from scratch. I am not very worried with new banks entering the business. Such moves do happen. We have to revisit our strategy at regular intervals.

What I do see is huge opportunity. The opportunity lies in how these players bring new approaches and strategies to conduct business, and how they plan to use technology to differentiate from the existing players in this space. This will surely spur innovation and we are looking forward to it.

Our strategy is simple. We want to include our customers in the process of decision making and planning and make ourselves relevant. The only person who can force innovation on the company is the customer.

Our preparations will only show results when our customers validate our efforts. Today no customer banks with just a single bank. It is a simple thing that banks have forgotten, they do not ask their customers about their wants or ideas to improve customer service.

We are preparing ourselves by constantly being at the forefront of what our customers want. They become a part of the product and the service building process .The relevance should be driven by the customer and not by deploying the latest and the best technology solutions. If this happens, every bank in the country will become relevant.

[Q] Can you cite an example of including customers in the decision making process or execution of ideas that are shared?

[A] We have developed a knack of rapid prototyping of applications within the bank. Such processes are common in the manufacturing industry.

An idea is shared and a prototype application is developed. We deploy this prototype as a pilot in a branch. When we are 70 percent ready we put it in a test environment and see if it has value or not, do a course correction and then put it into production. This prototype is developed within days and not months.

[Q] How are you addressing the need of rural customers?

[A] Rural customers need banking in its simplest form. So, we need to have different strokes for different folks. A rural customer is not available for banking when the bank is open. So we have to have banking services available to them at their place and at their convenient time. Since these services cannot be offered by a branch, we need to use wireless technology and handheld devices for our rural customers.

We have signed up with few self-help groups and NGOs who work as banking correspondents for us.

[Q] What would be your investment on the technology front this fiscal and in which areas?

[A] We are planning to invest around Rs. 20 to 25 crore in new applications. The areas that we will plan to spend them will be on productivity, profitability and new products for customers.

We will be investing in an enterprise service bus and customer relationship management (CRM) applications. These applications will increase the productivity of our sales force and also help us in new product launches.