Understanding the banking behavior of SME exporters; HSBC

Abstract

The study was aimed to understand the driving forces behind Exporter SMEs banking behavior in order to increase wallet share in the market and usage by existing customers. The study was completed in 4 stages: 1. Developing the research brief 2. Designing the questionnaire 3. Data Collection 4. Analysis and recommendations The mode of interview was face-to-face interview and the geography selected was Mumbai. Data was collected for a period of 4 weeks. More than 300 companies were approached and we managed a final sample size of 70. On analyzing the data, we came up with five major insights. First, the customers considered timely work, innovative product offerings, and a wide array of offerings and courteous RMs as Points of Parity (POPs) for foreign banks. Hence, no differentiation is possible with respect to these factors. The respondents felt that foreign banks can improve in the following fronts: practical approach to business needs, flexibility to clients' needs, not too much rule dependence, personal and emotional banking and development of the trust that the banks will be with them during hard times. These are the Points of Difference (PODs) for foreign banks and wallet share can be increased by differentiation on these lines. Second, many confuse HDFC with HSBC and consider HDFC as a foreign bank with great domestic presence. They also feel that HSBC is a bank by the MNCs and for the MNCs. In order to alleviate these misconceptions, HSBC can use its full name along with the acronym at all the points where it interacts with its customers. In addition, it can tweak its positioning a little bit to emphasize on emotional banking (developing relationships), its trustworthiness and how it is a bank also for the smaller players. Third, the factor respondents consider most important while dealing with a bank is its ability to fulfill the commitments made. The customers want the banks to under promise and over deliver or, if it is not possible, then at least, deliver what is promised. They also want the banks to understand the emergency situations when they arise and treat such cases specially and not only on the basis of their bank rules. Fourth, the customers consider the extent of hassle free banking and the approachability of the bank as the major driver for banking with a 2nd or a 3rd bank. Since, proximity is an issue for MNC banks, this need can be fulfilled by developing a good infrastructure for net or tele-banking or offering 'At-your-doorstep' banking to important clients. Finally, the customers are irked the most if they have to incur a loss or delay because of some mistake the bank commits while they are elated if the bank helps them when they commit some mistakes and provide them with timely and accurate information.