Nepali Times Asian Paints
"The dynamics of consumer banking has crossed the threshold."


Lenders in Nepal are turning more and more towards consumer banking. The prevailing stagnation in investment and competition has forced most banks to look at individuals and tailor products for their needs. Nepali Times spoke to Anil Shah, head of Consumer Banking at Standard Chartered Bank Nepal, to assess the trend.

How do you look at the increased focus towards consumer banking in Nepal?
Historically, in Nepal and other emerging markets, a bank for an individual has always meant a place to open an account and deposit money. The main utility of a bank was safe-keeping the savings of individual depositors. Today a bank means much more than that. It is now looked upon as a provider of financial solutions for individuals, which provides products and services that compliment their lifestyle. And that is what consumer banking is all about: it includes home loans, auto loans and personal loans. We will always have our hand on the pulse of Nepali consumers to determine what products they need and be ready to deliver them.

Historically banks used to concentrate their lending activities to companies and institutions, but the stagnation of the economy and the growth of competition has forced banks to look at alternative avenues. The dynamics of the consumer market in Nepal have also crossed the threshold required to make it a feasible proposition. At Standard Chartered our aim is to not only be a player, but to be the leader in all the consumer products that we introduce.

But has it worked according to your expectations? Isn't everyone else also getting on the bandwagon?
There is no doubt that first and foremost we are a part of the service industry. Customers can go anywhere, but a bank has to work on its main differentiator and for us at Standard Chartered, that is service and security. It is one thing to join an already existing market and quite another to raise the benchmark and create a new market. In Nepal, we feel that we have been able to do just that with several of our consumer products.

Our first foray into consumer lending was with our auto loan product, and we did more than just repackage and relaunch a generic service. We didn't want to just provide a loan to buy a car, we wanted to provide a solution to put the customer in the driving seat as it were.

It was packaged and marketed to be educational as well as promotional. The challenge was to break through the mindset of the customer who bought a car only after having saved enough over a few years so he could pay for it. We have managed to get Nepali customers to take that quantum leap.

Is the home loan market also growing as rapidly?
It does not take very in-depth market research to determine that most Nepalis aspire to save enough money to buy a plot of land and build a home. This is the cornerstone of our home loan scheme, and we offer the flexibility of providing financing for purchasing land, building a home, purchasing ready made homes as well as extensions to current homes as families grow. Although we are relatively new in the market, the growth of the book has exceeded our expectations. Our total consumer loan book is now close to Rs 1.5 billion.

But with individual depositors, is there much you can do in terms of service that is radically different?
On the contrary, we are always looking at ways to provide new services and solutions to our account holders. We were the first bank in the kingdom to offer domicile free banking, which means we had connectivity of all our branches allowing our customers to go to any branch for transactions. So, when customers open an account with us they become customers of the bank and not just one branch. We were also the first with online ATMs, and since there were still some transactions that required customers to come to the bank we introduced Xtra Banking, with our Kantipath branch open 365 days a year for extended hours and Priority Banking for individuals maintaining substantial balances. And we also have Home Banking, which brings the bank to the customers' home.

Don't you have to look out for alienation of the customer due to an increased internal focus in a large bank like yours?
We are aware of this, and as consumer bankers we always remember that the customer must come first in every respect and to succeed we have to deliver solutions that the consumer needs, not sell products that we have. The success of our consumer banking effort is mainly due to the team factor. It is not possible for an individual or a small group of senior managers to deliver sustainable success, you have to have the right team: from the frontline staff at the branches, to street marketers, to operations and technology support. In banking, like in any service industry, the quality control has to be conducted at the point of each and every transaction. This usually is the difference between success and failure. It is the ability to deliver exceptional service as well as generate exceptional business opportunities through all members of an engaged and motivated team that is the catalyst for success.

(11 JAN 2013 - 17 JAN 2013)