Friday, October 16, 2009

"Are Bankers Servant Leaders?" - Prof.M.S.Rao

“Good bankers, like good tea, can only be appreciated when they are in hot water.” - Jaffar Hussein

There are several challenges in the banking sector due to the rising expectations and aspirations of the customers. Let us briefly explore the challenges and then explore the ways and means of overcoming them.

Challenges in Banking Sector:

The current challenges in the banking sector are: customer retention, growing competition, rapid growth of technology, lack of customer intimacy and business turnover. The world economy opened up due to globalization throwing many challenges for business organizations. Everyone tries to woo others’ customers with several innovative products and features. Retaining the existing customers has become a Herculean task. The growing technology made things easier as both suppliers and customers to have variety of services and products at competitive prices. It has also thrown another challenge where there is lack of customer intimacy as transactions are done electronically. Thus technology has become both as a boon and a bane – boon because of the comforts and bane because of the complexities.

It is always profitable to retain the existing customers as you have already put in your energies and efforts in getting the customers. At the same time you can look for new clients and customers but certainly not at the cost of your existing clients. The findings of Harvard Business Review reveal that, “The cost of acquiring a new customer is 10 times the cost of selling to a current customer”.

In these days of growing competition it is not easy to have higher profits from customers. There is limited scope for monopoly in the current context. The other option is to have more customer base with thin margins. That means sticking on to volume business. Simultaneously there is need to tailor the products to suit the clients’ needs.

Expectations of Bank Customers:

The bank customers are basically looking for good products with multiple features. They also look for fair and just treatment from bankers. According to Michelson Associates, “60% of customers leave because of poor service, only 13% leave due to product dissatisfaction” From this finding it reveals that customers can be retained effectively if they are provided better services with multiple features.

Customers expect quick service with smile from bankers. They expect that the bankers must have cross product knowledge. They look for tailor made solutions to their existing problems. They also expect that the bank employees must be thorough with their products and features. Over and above, customers want their services to be cost-effective and they want more for less.

Bankers as Servant Leaders:

Bankers need to reinvent themselves with changing times. They need to get out the old mindset where customers would come to them for delivering their goods. Now the present scenario demands that they have to come out their comfort zones and reach out to their customers in extending their services. It is no more a sellers’ market but a buyers’ market. The private sector banks have thrown a great challenge for public sector banks and they reminded to public sector banks that the rules of banking business have changed. In a nutshell, the private sector banks have rewritten the rules of the game.

Bankers need to cultivate the attitude of service orientation and must deliver goods like any other leaders who serve people. It helps in percolation of banking services to the common man, winning their support and thus leading to all round prosperity. They should always think of how much value they can add to their customers by being different in delivering goods and by being proactive in providing services. They should act as change catalysts in transforming the banking sector.


It is rightly said, “If we don’t take care of our customers, someone else will.” It is the customer who gives us business. We would not be there if there were no customers. Therefore, is essential to find out the pulse of the customers to keep them in good homour for making businesses flourishing irrespective of sectors.

“We make a living by what we get; we make a life by what we give." - Winston Churchill

The End

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