Mumbai: Public sector Union Bank of India, trying to compete more aggressively with private sector banks, has chalked up an ambitious plan to turn its branch offices into sales and marketing hubs while centralizing back-office operations to free up personnel for spending more time with current and potential customers.
The effort is dubbed Project Nav Nirman.
“It’s a transformation of the bank to take on the competition head-on,” said bank chairman M.V. Nair in an interview. “Through Project Nav Nirman, we are trying to change the fundamental architecture of the way we deal with our customers.”
The project will particularly focus on technology and people skills as it seeks to alter its retail financial services as well as its small and medium enterprise business model with an increased focus on customers.
Competitive edge: Union Bank of India chairman M.V.Nair. The bank would like to see 5-10% above the industry growth, he says. (Photo: Abhijit Bhatlekar/ Mint)
The goal is to change branches from mere transaction processing centres into places where the focus will be on customer relationship management.
The bank is scheduled to bring all its 2,300 branches onto the so-called core banking software platform by March. This platform helps a bank to link all its branches seamlessly.
After rolling out the software, Union Bank wants to centralize and warehouse all its data, allowing the bank to handle functions such as clearing activities, processing loan requests and preparing bank statements at nine zonal offices, with uniform service levels across all of the bank’s outlets, Nair said. “A branch has to be almost like a store where product display has to be more important,” he said. “The staff should be able to interact more with the customer, extend quality customer service, sell products.”
Nair conceded that the bigger challenge will be employees. “People are used to do more work in back office,” he said. “Transforming them to be more customer-centric is our biggest challenge.”
Union Bank has hired key management schools to help train its officers. Thirty of the bank’s top officers, identified as the future leaders of the bank, are also getting trained by the Indian Institute of Management at the bank’s own training college in Bangalore.
Those who are trained are expected to train others in turn and also help develop new offerings and systems for the bank to roll out.
To start the process, the bank has given 5,000 of its officers 100 customers each to handle. These 500,000 Union Bank customers constitute 50% of the bank’s business.
”This officer will call up five customers every day,” Nair said. “That means he will talk to the same customer every month. This needs skill-building.” Also, “front-line officers are not empowered to handle issues like giving concessions, solving impromptu problems. Now, we will empower them substantially so that 90% of the cases are dealt with and cleared then and there.”
The bank is also centralizing its retail assets business by introducing 33 retail assets branches in all major cities by March. The idea is to free other branches in those cities to focus on selling and marketing products.
The bank has also decided to outsource its advanced due diligence as well as document verification and valuation process to quicken decision making. It is also in the process of setting up an outsourced call centre at its data centre in Powai, Mumbai, which will be supervised by the bank’s personnel.
“Our aim is that we should be able to come to a decision in a prescribed time. We intend to come to a decision in three days’ time, (and) in five days we should be able to fully approve a loan request,” Nair said. “Once we are able to do that, we will not be taking the processing charges.”
Union Bank is being advised by Boston Consulting Group, the same consultants which advised Punjab National Bank to shut its 2,000 zonal offices.
“At the first level there will be ATMs, the self-service kiosks,” said Nair. “And, then, the customer comes to the discovery area where the products are advertised prominently. Then, if the customer is interested in purchasing our product, he comes inside and buys it,” Nair said, explaining a new retail vision.
Nair said he wanted to launch 10 such prototype branches by March and, after a quarter, increase it to 100. “These 100 will compete with the best of the country.”
Nair’s targets are also clear: “We have to reposition ourselves quickly. If the Indian economy is growing at 9% per annum for the next five years, that would mean that banks will grow by 25% on an average. We would like to be 5-10% above the industry growth.”
Although the response from the employees has been ”very good” so far, Nair and his team are on a countrywide tour, organizing town hall meetings about the need and importance of Project Nav Nirman.
Will the bank, which was inaugurated by Mahatma Gandhi, look for a new face to promote the new Union Bank?
“We haven’t taken a decision so far for a brand ambassador,” Nair said, adding, “we might discuss it at our board meeting.”