Bank customers are not as loyal as they are generally thought to be. According to Mr Naveen Tahilyani, Partner, McKinsey & Co, a survey of 6,000 bank customers showed that customer loyalty, which was as high as 80 per cent four years ago, has now fallen to 40 per cent. In a presentation he made at the first plenary session at BANCON 2011, Mr Tahilyani said this trend would lead to increased shopping among banking customers and fragmentation of banking relationships.

He said banks will have to get ready to try out alternative channels to reach out to customers. Mobile banking is a channel that banks have to look at seriously, he said. He pointed out that many Indians spend an average of 120 minutes every day on mobile phones. Banks need to redesign their business models to address the needs of these tech-savvy and digital customers.

Mr Pratip Chaudhuri, Chairman of State Bank of India, talking about the evolution of the bank's approach to financial inclusion, admitted that when the bank was given 100 districts to take the initiative as part of the lead bank scheme, it was seen as a burden by many who joined the bank then. The bank was given among the most remote places in the North-East, as well as hilly areas in Himachal Pradesh and other similar inaccessible places. It was seen as a terrible legacy, of going to places, where, ‘not a blade of grass grows'. But he said it was these places that helped State Bank emerge as one of the top banks and helped it source 40 per cent of its deposits through savings bank accounts. He said that this was a tribute to the farsightedness of the then management. Today, with technology, he said the incremental cost of adding customers was not that high. He said SBI was today the top bank in the home loan market with Rs 90,000 crore of home loan outstanding across 17 lakh customers.

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