Siebel And IBM Expose Weaker Links In Indian Banks

by Hinesh Jethwani    Mar 25, 2004

Siebel Systems and IBM Corp. announced today the results of an independent market study into the lead management and sales effectiveness of the Top 100 Retail Banks in Asia-Pacific and Japan.

According to the study, India’s leading retail banks are not fully leveraging their customer interactions to build customer loyalty, increase products per customer, and maximize revenues.

The survey evaluated top 100 retail banks across India, Australia, Hong Kong, Japan, Korea, Malaysia, Singapore and Thailand. The India leg of the survey covered 10 national banks and 4 foreign banks.

Speaking to a select media gathering in Mumbai, Dan Bognar, director of customer strategy, Asia-Pacific & Japan, Siebel Systems, said, “While the last phase of industry growth was largely driven by mergers and acquisitions, the next growth opportunity for retail banks will come from achieving customer differentiation. Retail banks can no longer afford to passively wait for customers to walk into their branches. Nor can they afford to treat all customers the same, or in a manner which compromises their experience.”

“This necessitates developing a best-practice approach to sales processes and employing the right technology to identify and uniquely profile the customer, understand their needs, recommend solutions of value, and manage each interaction as a lead through to conversion. Banking executives who are able to take quick and effective action to address these challenges will stand to reap significant financial benefits to take them through the next phase of growth,” added Bognar.

Conducted between November 2003 and February 2004, the research took the form of an “anonymous buyer”, by assuming the role of a customer making a series of product related enquiries via the widely-used customer communication channels of telephone, web and email.

According to the survey, no Indian bank- foreign or domestic- made a proactive attempt to follow up with the customer after the initial telephone/email interaction. However, Indian banks fared better than their Asian counterparts in attempting to identify and profile the customer; but fared poorly when it came to understanding the customers’ needs.

Cross selling was low across banks in the region- while none of the Indian domestic banks attempted to cross/ up sell, Indian foreign banks scored higher at 25%. The study revealed that telephone is still the preferred medium to resolve basic queries- compared to a near 100% resolution over telephone, email lagged behind with as much as 43% of Indian banks never responding to email.

Closure of sale and lead generation was dismal across telephone and email- both seen as no more than a service channel.

63% of all Indian banks researched are successfully capturing the customer’s basic contact details for identification and follow-up purposes. However, this trend is pronounced only amongst Indian foreign banks, of which 100% successfully capture customer contact details compared to a mere 25% of domestic banks.

An alarming 87% of all Indian banks researched made no attempt to understand what features the customer was interested in before making product recommendations. Surprisingly 25% of Indian domestic banks made a proactive attempt to understand the features the customer was interested in whilst no Indian foreign banks made any such proactive attempts.

Detailed findings of the report indicate that whilst there are enormous opportunities to drive improvements in revenue and customer intimacy, Indian banks face many challenges ahead.

Will the introduction of compliance standards and regulatory norms allow banks to achieve maximum customer satisfaction? Bognar replied, “Siebel definitely supports benchmarking CRM standards, but regulatory norms would be too stringent as they would restrict freedom and limit competitiveness in banks.”