Retail banking acquisition & deepening process at branches

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Retail banking acquisition & deepening process at branches

  1. 1. Retail Banking - Acquisition & Deepening process at branchesBackground:-Acquisition and deepening is the most heard words amongst branch banking bankers across the banks and without any doubt success atachieving the targets on both these parameters are the main task for branch banking teams across the world.Along with acquisition and deepening, we must discuss the meaning of process and significance of having a process to achieve set targetsalong with implementation of such process.Meaning of process:-Process is nothing but defining a job step by step. Process term was more identified with manufacturing sectors than service sectors. But overthe years service sector like banking has been giving lot of importance to the word process. Let’s understand the significance of process.Importance/ Significance of process:-Let’s take an example of a machine like Coffee Vending machine. There are certain steps which one needs to follow in order to produce a cupof coffee.Now once an office boy is taught step by step about the entire coffee vending operation, he starts following it and starts serving coffee nnumber of times without being confused or he is never under pressure to make a coffee.Same way if we compare the job of acquisition and deepening, there is confusion/pressure expressed by many bankers which highlight theabsence of a process as well as adherence to a process to the job of acquisition and deepening.It is assumed that everybody given a choice would want to achieve goals assigned to them and nobody would want to be categorized as under/non performers but still we come across many team members struggling to achieve the goals/numbers assigned to them. Hencestruggling/failures does not happen because of entirely lack of willingness but due to lack of following proper steps (process implementation)or due to lack of knowledge on how to achieve the set goals (process).When there is a well defined process and a well tracked implementation on process, the blame on lack of results will focus on process and noton people, i.e. we may say a process driven approach always put lesser pressure on people and entire pressure is channelized on improvingthe process and following the process.One of the most important aspects in man management is awareness that whether it is machine or men, once pressure is exerted, both arebound to be affected by wear and tear.In case of machine, we may repair it and fix it back to health, but in case of men it is often stress and fatigue resulting in underperformanceirreparable.Hence having a well defined process and following it should be given utmost importance by the management so that every team member isenabled to achieve acquisition and deepening targets with pleasure than pressure.Meaning of acquisition and deepening.
  2. 2. Meaning:-Acquisition in branch banking parlance means acquiring new customers to the bank by way of CASA (Demand Deposit Accounts).And Deepening means retaining existing accounts profitably by cross selling or selling multiple products.Both these functions forms macro level activities at the branches and is the primary responsibility of Branch management teams at all levels.Acquisition is done for new to bank customers, where banker is acquiring a first time customer where as under deepening it is aboutincreasing the wallet share of customer by improved products and services offering.When we are discussing acquisition and deepening, another term which needs mention and understanding is cross selling.Cross selling:-Cross selling as the name suggest is not direct selling but selling different products and services to customers who has been directly soldliability or asset products.These customers are later sold investment products, multiple liability products, transaction banking products, Asset products etc.Even though cross selling has been used effectively for creation of customer stickiness but cross selling done mechanically often doesn’t helpbanker’s objective of turning primary banker to the customer and only way to become primary banker is cross selling products and servicesbased on customer’s profile and requirements identified from it.Let’s discuss the primary banker concept by way of understanding objective of acquisition and deepening.Objective of Acquisition and Deepening:-Objective of both Acquisition and Deepening is building up a large customer base, which will be active or transacting profitably with the bankalong with carrying maximum products & services.A customer, if considers a bank as his primary banker will route his entire transactions or majority transactions with the bank along withholding his family accounts , investments , Loans and other services like Trade /Fx and other different set of services offered by bank and forany requirement particular bank will be his first contact and choice.Hence ultimately the idea behind the activity of acquisition and deepening is to make customer choose a bank as his/her primary banker ,once that objective is assigned banker will become relevant in customers life and relevance leads to loyalty from customer.Loyalty of customer ensures longevity of business for the bank and proves an insurance against frequent switching of banks by customersbased on one service or the other.Unless customer treats the bank as his primary bank, true potential of a customer can’t be realized and at times like now where everycustomer uses multiple accounts, revenue potential of the customer is shared between multiple banks.Thus for a banker if it is the primary banker for an active customer, it provide an opportunity to earn 90-100% revenue against in case of anactive customer for whom the particular bank is one of many banks where he has relationship and same set of products and services mayfetch only 10-15% of total revenue potential.Hence Banker’s similar efforts fetches different results according to the status assigned by the customer on a bank i.e. as primary banker orone amongst many.Considering above facts, the ultimate aim of the banker through process of acquisition and deepening should be building up of a largecustomer base treating the particular bank as the primary bank.
  3. 3. Let’s discuss acquisition process in detail.Acquisition processSteps of Acquisition process can be defined in two steps:- First-Step1. Understand Bank’s strength with respect to Transaction Banking / Investment Products & Asset Products. (Strengthanalysis)Each and every member involved in branch must know about their strengths with respect to Bank’s brand, Banks transaction bankingproducts, Investment products and Asset products.Strength analysis should identify various strong points in comparison to competition as well as the existing customer feedback.For example for some banks Trade services are the strong point and for some it may be branch network etc.And similarly existing customer’s feedback on various products and services can be useful indicator to understand banks strength.For example, some customers indicate local staff as the main reason for their banking comfort with a particular bank or it may a locality ofthe branch etc.And further strength of the bank can be identified from existing customer profiles of the bank. For example there are banks where aparticular community likes doctors or particular trade community preferring to bank indicating the preference for the bank within certaincommunity.Post strength analysis, strengths identified should be listed out.2 Training the team on strengths / market mapping /appointment generation/ customer meeting / process on closureof calls.While discussing about training, it is important to note about the reason behind training and development of team members.If you analyse products and services offering of various leading banks, most of them are similar or alike and decision making process onbanking with a particular bank is mostly done on the basis of references from friends /relatives / advertisements / brand visibility etc.And considering the wide range of options in banking, customers do analyse options before finalizing their banking business.And the key differentiator for the banks is the man power or their respective team members and it is their ability / quality to understand thecustomer profile and requirements as well as their ability to present the bank most impressively in accordance with the customer’s profile andrequirements which ultimately results in conversion/rejection.Solution to improve the ability/quality of man power is nothing but ongoing learning and training sessions for entire segment of employees.Many banks has e learning modules for educating and testing the knowledge levels and many banks has mandated training man days for eachemployees for both on site and off site.Further there are weekly training schedules at branches on various subjects implemented at various banks and training by way of role plays,presentation etc make the process of learning much faster and effective.Challenge for branch banking teams is to ensure quality training on knowledge updating, service delivery and sales skills.
  4. 4. Thus manpower is the most important differentiator for banks and whichever bank is able to dole out best manpower by way of training anddevelopment will be more successful in achieving goals/results than those banks with large untrained or under trained employees.With respect to acquisition process specific training needs to be given on the following activities:- Draw macro level catchment area according to strengths Identify micro levels references in the identified catchment area Allocation of micro level catchment area for meeting (Level 1) Level 2 meeting for appointment generation / activity roll out for appointment generation Level 3 meeting for presentation Conversion/Follow up/Rejection Process in case of Conversion Process in case of Non conversion or Follow upLet’s discuss each activity in detail.1 Draw macro level catchment area according to strengths.Once strength is identified, it is about drawing up a macro level catchment area. For example if asset products to Doctors are an identifiedstrength then at macro level all the Doctors, Indian Medical Association and all Hospitals becomes the macro level catchment area.Or if salary account product is a major strength, then all the organizations with salaried employees receiving salary above the requiredproduct level will become the macro level catchment area.2 Identify micro levels references in the identified catchment area.Once macro level catchment area is identified, it is about identifying the micro level references through whom respective markets can becombed for business.References are individual contacts who may be existing customers or anybody known to the respective teams and should be used to knowabout the influential individuals amongst clusters and groups. It can be profiles like the President of an association/ group or GeneralManager in an industrial house etc.3 Allocation of micro level catchment area for meeting (Level 1).Once references/contacts are worked out, catchment area needs to be bifurcated amongst teams along with reference points.Bifurcation means clearly allocating the areas amongst teams with reference /contacts.Teams should then start meeting the references / contacts and identify respective influential individuals amongst macro catchment.Meeting needs to happen between the bank and the influential individuals in the most organized manner with an objective of understandingthe catchment better and should enable the banker to draw micro level prospect list.This is very important as the prospect lists will be prepared post meeting and discussing with the concerned key figures in the catchmentarea, it is likely to provide the right set of prospects than the prospects list generated out of assumption by referring to few directories.4 Level 2 meeting for appointment generation / activity roll out for appointment generation.Once micro level prospect is generated the level 2 meeting needs to be planned out. Meeting at this level may be a door to door campaign orany activity to generate appointments.
  5. 5. Activity based meetings are always better than direct door to door meeting. For example Banks with the help of Car Dealers/Show roomsdoes Test drive activity for their customers , where many a times Bank exhibits the car at their premise or any other premise and invitecustomers / nearby non customers to have look on the car and may take a test drive etc.Using these activities customer or non customer may either ends up buying the car or not but bank is getting an opportunity to have anengagement with the customer / non customer to have an appointment later, so as to understand his potential and discuss businessaccordingly.Every appointment generated should not be for 2 minutes but at free time. This is important because you are seeking appointment for apresentation of bank and not just a courtesy call.5 Level 3 meeting for presentation.Once appointment is generated, it is about presentation and presentation should be crisp and pointed in content as well as presentation.Presentation should be designed in such manner that enough and more interest is generated in the customer by highlighting the strengths ofbank, based on which the prospect is identified.As discussed earlier, every bank now a day’s offers similar products and services and only differentiator is the Banker who represents X or Ybank.Thus every opportunity to present the bank should be done by well trained bankers with ability to convert appointments in to business andBanker should assign high focus on presentation and its content.6 Conversion/Follow up/Rejection.Every presentation should result either in Conversion or Follow up or Rejection and never be inconclusive, if it is inconclusive then it shouldbe termed as Rejection and not follow up or Follow up should mean a definite date for future appointment. Second – StepProcess in case of Conversion:-1. Profiling (Detailed).Once conversion happens the most critical item on the process is detailed profiling which will have to highlight the family tree , businesscontacts , future expected inflow – outflow statements etc.Profiling should capture existing banking relationships, requirements etc.It is the profile through which customer’s potential is measured and understood and it is based on the profile Bank pitches products andservices to the customer.Hence profiling should be done with utmost importance in the beginning as well as updated at quarterly intervals.Let’s discuss about Customer Profile (Detailed).Detailed profile should have following details:-1. Personal details2. Professional details3. Family tree4. List of debtors and creditors
  6. 6. 5. Expected inflow-outflow statement for a year period6. Existing bank details (Asset/Liability/Investments)7. Expectation from the bank and experience so far8. Accounts held by family and friends with the bank9. ReferencesPost such profiling, banker should list out potential / opportunity /requirement from the customer and match it with banks offering.Thus through profile banker will know , which product needs to be pitched to the customer according to his potential as well as his futurerequirements along with list of prospects who can be approached taking his reference.2. Compliance on TAT for A/c opening / Deliverables and confirmation on successful TAT.Once signing up is over the process of acquisition doesn’t complete and in reality the success of acquisition process many a times loses themomentum with poor compliance on TAT of A/c opening, delivery of deliverables.Hence TAT compliance is the first step towards meaningful and profitable acquisition process.3. Hand holding to the bank’s products & services.Again process of acquisition doesn’t complete even after initial account opening and timely delivery of deliverables.Rather activation of accounts happens only by way of active usage of accounts or because of successful hand holding of customer throughbanks products & services.Let’s discuss in detail:-Introduction to using ABC (Alternate banking channels)Various alternate channel products like Internet, Mobile, Cards, Cash & Cheque pickups needs to be introduced with benefits and advantageto the customer as often banker assumes customer’s knowledge level on bank products & services to be high without really understanding theactual level of knowledge, which ultimately results in customer not knowing about the fine services offered by bank and switching hisrelationship to another bank for availing similar services.Encourage to issue banks cheques on payment or using NEFT/RTGS facility for paymentAgainst normal practice of asking for funding from customers, banker should change the way of asking to debit activation by issuing chequesof concerned bank and using bank account for making various payments.Once payments are routed, funding automatically happens, hence higher the payments higher will be the funding of accounts and oncecustomer is comfortable with making payments through the bank chances of him using the accounts for more payments are higher thusbringing in more and more funding to the account.Introduction to various investment productsBanker should introduce various investment products & services based on detailed profiling of customer and his financial profile.Financial profile:-Financial profile tells us the level of surplus a customer is having, whether he is running a low level of surplus or he is maintaining high levelof surplus.Based on the surplus level customer can be provided with options.
  7. 7. Low level and Surplus profile customer meaningLow level surplus customer means money available post expenses are not significant hence volume or ticket size of investments will be lowvalue and High level means higher income left post expenses and high ticket size investment.Various investment options, that can be advised for customers can be:-1. Retail TDs2. Bulk TDs ( Above a crore)3. Systematic Investment Plans (SIPs)4. Recurring deposits5. Traditional Insurance plans like term plans, Money Back6. Small ticket ULIP products as annual investment plans7. Mutual Funds (Equity /Debt & All weather)8. Gold/Silver coinsIntroduction to various loan servicesSimilar to investment options, with the analysis of profiles customer can be presented with various options on loan products highlighting costbenefits.Loan products can be consumer or business loans and needs to be introduced to the customers along with TAT on various products.Popular consumer loans products can be:- Personal Loans Gold Loans Home Loans Auto Loans Education Loans Over draft Loan against shares / other approved securitiesAnd in retail banking business loans can be:- Cash Credit and Over draft account Loan against property Term Loans LC/BG Bills discounting etc Commercial vehicles LoansConcept of joint calls:-Both cases of Investment products as well as asset products, it is always better to make joint calls on the customer based on his profile witheither Investment advisors or Loan managers.Since most of the banks have different teams to acquire NTB, sell investments and sell loans it will be better to do joint calls with theconcerned teams for better customer response.Activation Process:-Activation of an account happens, when the customer start transacting regularly with the bank and he starts using few more products of thebank.
  8. 8. Let’s discuss few activation processes.Activation of ABC products and cross selling of debit inducing productsFinal step on acquisition process is activation on ABC products like net/mobile/card/additional services or signing up for these services andhand holding usage of these products.And similarly ensuring cross selling of debit inducing products like Assets / Second account of children, where through standing instruction acertain amount is credited to second account at desired intervals like monthly / quarterly etc.Even products like recurring deposits, SIPs will ensure customer’s commitment to the bank account with respect to funding.Bank can have its own targets for number of products must be sold to a customer in the first month, second month etc , as it is believed that ifa customer is not hooked with more than 2 products in the initial month of account opening , there is high probability that the customer mayturn inactive.TD strategy to improve customers commitment as well as recall of bank brandWhen a banker succeeds in selling a TD to a new to bank customer, he is in fact ensuring customer’s attention on bank as whenever onesmoney is blocked with a bank by way of deposits it is natural for the customers to ensure some contact with the banker as his money is lyingin deposits.And stand alone deposits should be focused by bankers, where customer can’t break the deposits without visiting the branch as per processphysical FD receipt is needed for effecting any FD closure.Many a time customers having multiple accounts start routing their transactions with a particular bank just because his multiple relationshipespecially on the TD side with a bank.Hence priority should be given to stand alone TDs as one of the initial cross sell products.Social media for improving relationshipSocial media sites like Facebook, Twitter are used by most of the customers now, hence at micro level or branch level these mediums can beused for building relationships, provided there is a clear policy on such usage by concerned banks.Upgrading to Managed programs or RM programsIf a customer is identified as high net worth or HNW, he /she need to be upgraded to a more sophisticated managed program, wherenormally customer enjoys bouquet of services including dedicated relationship managers.Such up gradation often creates customer delight resulting more business to the bank.Process in case of Non conversion or Follow up:-1. Recording the reason for follow upEvery time prospect postpones a business opportunity, it is very important to note about the exact reason for such postponement.Hence any postponement of business without a valid reason should be treated as rejection and not follow up as many a time bankers goesafter a prospect with high potential without converting for long but still the prospect name and expected business finding prominence in theprospect list.This can be misleading hence valid reasons must be understood and noted before classifying a prospect as follow up.
  9. 9. Reasons should be subject to BH verification every weekend.2. Diarizing follow up fileFollow up file should be managed with dated file, and every follow up date should be honoured with a prior confirmation call and visit.Prospects which failed to keep up the commitment on date and time without genuine reason should be bracketed to rejection and shouldn’tcontinue to find place in the prospect list.Follow up file should be subject to weekly scrutiny of BH.Process in case of rejection / non conversion:-1. Record the reason for rejectionRejections are part of business, but reason for rejection has to be found out and recorded. Unless Banker is aware of the reasons for rejection,he won’t be able to offer solutions to counter such reasons next time.Hence rejection details along with reasons should be recorded and filed.2. Report the reasons on a weekly basis to Branch ManagerRejection file should be reported and discussed with BH weekly as unless reasons are known, solutions can’t be offered.BH should discuss the reasons with his higher ups.Now let’s discuss Deepening.Deepening ProcessSteps of Deepening process:- First-Step1. Understand your customer base (Profiling -Limited).Unless there is an understanding about existing customer base, no effective deepening process can happen at branches.And for that profiling of customers with limited informations available is a must. Profiling is an exercise by which customers details arecaptured systematically. Profile should include personal details, relative details, professional details, business details, existing productdetails, major payment/receipt details etc.Branches should pick up top 100 customer list and work on profiling with available details and continue the processProfiling will throw up details about customer’s general behavior on payments and receipts, based on which customer’s requirements or thereasons on which customer is using the bank is found out and these findings needs to be worked out for preparing further sales pitch.As the reasons behind operating the account is known, banker has an opportunity present better ways and means with respect to use ofaccounts to improve customer experience. And for the customer as far as he is getting better products and services for presently usedrequirements, he won’t resist banker unlike buying a new requirement product or service presented by banker. Second step:-
  10. 10. As discussed in case of acquisition process second step should be training team members on following activities:- Appointment generation Presentation (Level-1) Second level meeting for detailed presentation (Level -2) Process in case of follow up or non conversion Process post conversion:-2. Appointment generationOnce there is an understanding on customer, it is about seeking his appointment. One thing to remember is taking appointment at timeswhere customer will be free to talk, which needs to be ensured as courtesy visit can happen in few minutes but meaningful sales call will takeat least ½ an hour.If customer is holding an account which active, generating appointment will not be difficult but if customer is inactive generatingappointments should be on the basis of some reason. For example: - KYC updating or a survey for Adhar card etc.3. Presentation (Level-1)As discussed earlier presentation should be based on existing account usage style and building on from them with other available productsand services, which can make his requirements more beneficial to the customer. For example if customer is regularly cutting cheques formaking payments to X party and customer’s existing account offers RTGS facility free of cost, customer should be told to shift to RTGSfacility than from cutting cheques.Post presentation about existing requirements and banks various offers on improving existing customer requirements , it is about profileupdating (detail) this time and taking appointment for a future date where an updated presentation should be prepared in accordance withthe latest details updated in the profile.Once presentation is ready, Banker should visit customer for detailed meeting.Rating of meeting and presentation (Level-1)Unless banker is able to extract entire details from customer in the form of profiling, the meeting and presentation should be considered orrated as failure. This is very important for ensuring quality of profiling activity.4. Second level meeting for detailed presentation (Level -2)Whenever a meeting is scheduled for detailed presentation or level 2 meeting, it means considerable amount of time being spent by thebanker in preparing for the meeting hence there has to be a clear income targets for the banker in relation to the time value spent.So every meeting should be assigned revenue targets, achievement of the target should decide whether meeting was successful or not.Target shouldn’t be products but total revenue, which will curb mere product selling.But what happens if banker fails to meet his target, let’s discuss the actionable:-Process in case of follow up or non conversion:-1. Recording the reason for follow up or non conversionEvery time prospect postpones a business opportunity, it is very important to note about the exact reason for such postponement and everytime banker’s offer is rejected, reason should be known and recorded.
  11. 11. Hence any postponement of business without a valid reason should be treated as rejection and not follow up as many a time bankers goesafter a prospect with high potential without converting for long but still the prospect name and expected business always finding prominencein the prospect list.This can be misleading hence valid reasons must be understood and noted before classifying a prospect as follow up.Reasons for both follow up / rejection should be subject to BH verification every weekend.These reasons many a times throws up weakness in the system, which may be fixed at branch level or may be at product or managementlevels.2. Diarizing follow up fileFollow up file should be managed with dated file, and every follow up date should be honoured with a prior confirmation call and visit.Prospects which failed to keep up the commitment on date and time without genuine reason should be bracketed to rejection and shouldn’tcontinue to find place in the prospect list.Follow up file should be subject to weekly scrutiny of BH.Process post conversion:-1. Profile updating with business sourced / future potential / references etcEvery business engagement as well as results should be recorded in the profile in detail and it will serve as a great reference document forfuture for the entire bank and not just a relationship manager or a branch head.2. Quarterly updating of profile for identifying requirements and opportunitiesEvery quarter profiles of customer need to be updated post meeting. This will enable the banker to remain in contact with the customer aswell as understand customer requirements and opportunities.3. Upgrade accounts based on business and potential to higher products or to managed programs if the bank isrunning such programs or customer is not presently managed under any specific product programOne important activity that banker should keep in mind is selling the right product to the right customers. If customer is maintainingbalances in 6 digits, he should be holding products with 6 digit balances than 4 or 5 digit balance products.Similarly if a customer qualifies for a particular program or a managed program where services like dedicated Relationship Manager / Officeris assigned, banker should ensure to enroll the customer to such program otherwise any time the particular customer can be switched byother banks offering managed programs.Thus deepening process doesn’t end at business sourcing level but continues as an ongoing process till the time customer remains with thebank.Since we have discussed various steps of Acquisition and Deepening, it is important to know the practical aspect of implementation of processand there are few basic tools which enables effective process implementation.Importance of tools in process implementation:-A tool as we know in a mechanical process enables the worker to get his work done efficiently. To loosen a screw, a mechanic can use manyoptions but a tool like screw driver will give him the best results.
  12. 12. Similarly if an ordinary man is asked to climb over a wall 10 feet tall, he will find it difficult to cross over, but if he is trained to use a pole tojump over such a wall, he will cross over the wall when he is tasked without struggling.Hence in order to make the process implementation efficient and result oriented following few basic tools can be used.1. MISMIS on various stages of process is a must and should be rolled out at regular intervals. Style and content of MIS should be simple andunderstood by entire team.MIS helps in knowing the performance Vs expectation as well as own performances Vs Others. These information help teams to improve theirperformance.2. Check listsProcess check lists should enable team members across the levels to check and confirm on their daily/weekly expected actionable to actualactionable happened.This is very important as every member is expected to do certain actionable daily and unless there is a check on daily actionable, there is noguarantee that it is done.Inspect what you expect theory plays critical role in overall performance monitoring.3. Daily /Weekly/Monthly reviewEvery performance expectation needs to be actively reviewed daily/weekly/monthly intervals. Unless there is a review of process developedwithin the team, no other process may work as envisaged.Review process should capture reasons on achievements / non achievements and should reward performances along with corrections /actions against non performances.Review without above measures will be ineffective.4. Example of various toolsDAR /DCR – Daily activity reportLMS – Lead management sheets /systemsActivity Trackers – For capturing activity details/plansE-Learning modules – For learning & trainingTrackers – To track business run ratesConclusion:-Basic process on acquisition and deepening as well as the objective remain same across the banks but are defined differently along withdifferent set of tools by different banks.Banker’s challenge is in ensuring the right combination between basic process and available tools at the bank for an efficient and effectivebusiness model which will enable the teams at branches to work without pressure but pleasure.
  13. 13. And pleasure will add to the productivity and better productivity leads to better performance.

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