Innovations in Indian Banking Sector



Case Code : CLSM012
Publication date : 2005
Subject : Services Marketing
Industry : Banking and financial services
Length : 04 Pages
Price : Rs. 100

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Key words:

Liberalization, Deregulation, Public Sector Banks, Private Banks, Foreign Banks, Private Banks, Value-Added Services, ATMs, Online Banking, Innovative Products, Proprietary Processes, 'Sweep-In' Account, Kotak Mahindra Bank, ABN Amro, ICICI Bank, Technology-Based Customer Services, 'Netsafe', HDFC Bank, SBI, Bank Of India, Mobile ATMs, Service Personnel, Customer Convenience


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The caselet gives an overview of the innovative services offered by the banks in India to stay ahead of the competition. Most of these banks took the help of proprietary processes and technology to launch innovative products to woo customers and differentiate themselves from the competition. Banks also started using their ATMs as a means of differentiating their services, making them more accessible and attractive to consumers. They added bill payment and credit card payment options at the ATMs. In addition, the banks used service personnel as a means of differentiation.


   Service differentiation in Indian banking sector.
   Use of technology in Indian banking sector.
   Services personnel as a service differentiator.


With the Indian Government initiating the liberalization and deregulation process in the late nineties, the Indian Banking Industry changed completely. Liberalization and deregulation saw the entry of private sector banks into India.

These banks used state-of-the-art technology, had lean organizational structures, focused on specific customer segments, and set high standards of operations and customer service. They also adopted global practices, and developed core competencies in the form of proprietary technologies and processes and brand building to differentiate them...

Questions for Discussion:

1. With the banking industry in India already cluttered with 289 scheduled commercial banks (March 31, 2003), private sector players have resorted to proprietary processes and technology to differentiate themselves. What are the different means that banks have adopted to differentiate their services from those of competitors?

2. Banks have begun to lay emphasis on remote service encounters by encouraging customers to use ATMs and Internet banking services for their banking transactions. Briefly discuss the pros and cons associated with the usage of remote service encounters.