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Press Release - 31st October 2003 Seminar by Dr. P. J. Nayak, Chairman and MD, UTI Bank Ltd. On 29th October 2003, Dr. P. J. Nayak graced XIMB and spoke at length, drawing from his vast experience in the financial sector of India. The event was organized by XIMB in joint collaboration with Bhubaneswar Metropolis Management Association (BMMA). Two of their distinguished members, Mr. S. Hota and Mr. Maqbul Ali also shared the dais with Dr. Nayak along with Fr. Abraham, Director XIMB. An eminent economist (M.A. and PhD from Cambridge) Dr. P. J. Nayak has overseen the financial sector reforms of this country in his capacity as the Joint Secretary (1996) in the Ministry of Finance of Government of India and as board member in several regulatory bodies. Dr.Nayak stressed the point that the Financial Sector has transformed the industry structure in India in the last decade like no other industry has. And this has been made possible by two driving forces:
The first force allows conceiving new products while the second crunches the time required to bring them out in the market. In this exciting new scenario, the researcher who develops the product also becomes its marketer. The extent of the changes can be seen from the numbers of private banks that have come up in recent times. In 1994, the first private bank in India (after deregulation of the sector) was established which opened the sluice gates. The latest addition is Kotak Mahindra Bank, which came up just a few months back. The significance of these banks lies in the fact that they have successfully bridged the gap that existed between the service and variety that the public sector banks offered and what was actually possible to offer. It also has made the industry more customer oriented and raised the bar for excellence for all players. Economists in past tended to look at the microstructure of banks. But now the microstructure of commercial banking has become equally important. This is an outside-in view focusing on the key parameters of customer base, market segmentation and IT competencies. Today, apart from the traditional tasks of borrowing and lending, a bank performs a host of other activities. Consequently, the resultant structure is no more a simple one. Banks can no longer afford to overlook Customer Relationship Management. Dr. Nayak suggests a simple model of measuring the intensity of relationship of a customer with any bank. The customers can be segmented as Casual, Familiar and Intimate. Along each of these customer segments, the value propositions that a bank offers can be drawn up. This gives a useful framework for the decision makers to focus their efforts on those customers who bring the maximum business to the firm. At the same time, it is important to keep in mind that the banking needs of people change over time in their careers and updating the customer profile thus assumes paramount significance. The CRM models used should be able to successfully capture the present customer needs and forecast accurately their future needs. The other side of this analysis is logically the products and services that the bank offers. Addressing both of these, the demand side as well as the supply side, is essential for a bank to be able to perform efficiently and maximize its profits. Dr. Nayak prescribed two perquisites for a commercial bank to be successful.
The following lists the pointers for India Incorporated, which our eminent speaker outlined.
The evening ended with a long question answer session with the budding managers of tomorrow. Dr. Nayak not only answered the myriad queries of the students of XIMB but also engaged in animated discussion on the various issues raised by them. The packed auditorium was enthralled and the audience came back enriched with precious insights on the mechanisms of the Commercial Banking sector and how it is likely to evolve in the near future. Contributed by - |
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