Shanker Dev (name changed), a 57-year-old executive of an FMCG company, recently shifted his bank account from a public sector bank to a private one.
His son, a computer programmer, has all along been the customer of a foreign bank. No wonder, public sector bankers are a worried lot these days over the high rate of customer attrition. To add to their woes, the urban youth is staying away from the state run banking sector.
Bank of Baroda has appointed the National Institute of Bank Management to undertake a study on customer attrition across several centres.
Punjab National Bank has conducted an in-house study on customer attrition. As part of its business process re-engineering exercise, Bank of India has recently concluded a customer satisfaction survey across a sample of 17,000 customers.
The focal points of all the three studies is the aversion of urban youth towards the PSU banks. Another worry for state-owned banks is the way their share of the customer's wallet is being eaten away by private sector banks grabbing salary accounts.
"Till now we have done only perception studies on customers. But now we feel the need for some hard data so that we can act on it," said a Bank of Baroda official.
The bank is not in a happy state with the number of accounts having stagnated at 25 million over the last few years.
Said U S Bhargava, general manager, PNB, "Our growth in terms of number of accounts was not on expected lines. It was growing at a snail's pace of 5 per cent."
PNB has about 35 million customer accounts. Most public sector banks strangely enough do not have the requisite software to track the number of customers but can only keep tab on the number of accounts.
Convenience is what has drawn the youth towards the new age banks. Most young salaried professionals do not even know which branch they bank with.
Their only interface with the bank is the ATM and perhaps the internet banking site. Public sector banks are slowly waking up to the changing scene.
Said R K Bakshi, deputy general manager, Bank of India, "Previously we were going by the 'one size fits all' formula. We are now changing focus from number of accounts to value of accounts. We plan to introduce new products specifically for high net worth individuals."
PNB's study revealed that the lack of technology was the key reason keeping the new generation away. Since then, PNB has been progressing at a marching pace.
It has put 1,500 out of its 4,400 branches on the core banking system thereby allowing its customers to enjoy the facility of multi-branch banking.
"This year we expect the growth in the number of our customer accounts to grow more satisfactorily at about 15-20 per cent," said Bhargava.
In a country with 232 million bank accounts, customer attrition is not confined to the public sector banks alone. New private banks also do face attrition but there it works a little differently.
These banks weed out customer accounts when they find that the customer is unprofitable i.e., persistently fails to maintain the minimum balance amount required.
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