Banking Trends

But the canvas of banks is no longer restricted to deposits, advances and investments. Banks have now repositioned themselves as one stop shops for meeting all the financial needs of customers, blurring the boundaries between banking, insurance, mutual funds and asset management. Another discernible trend in what of banking is change from balance sheet to off balance sheet intermediation. Banks act as the backbone of the fast expanding derivatives markets helping corporate to hedge their interest rate, currency risk and commodity price risk exposures. Banks, even public sector banks, are no longer shy of declaring that they are in the business for making profits i.e. profit maximisation is their primary goal. Resultantly all the corporate fads ( Business Process Reengineering, Smart Sizing, Six Sigma, CRM etc) have found expressions in banks.

The most significant change in Banks post was the discovery of Marketing. Till then the customer would have found it hard to differentiate the service of a bank from that of State Electricity Board. But now customers are a pampered lot and banks are more of marketing malls than government offices in word and deed. Banks are increasingly putting CRM (Customer Relationship Management) techniques in practice.

Enterprise CRM software packages having excellent data warehousing and data mining techniques, can link all data relating to a customer right from the savings to fixed deposit habits, loans, credit/debit card usage, internet usage etc. to not only a customer’s financial profile but also his psycographic profile. This can be classified into group profiles enabling a bank to offer products to target groups giving the look of a customized product offered to each customer.