Q: Was the decision to attract ultra HNI customers through a separate dedicated branch a good idea?
A: HNI customers have requirement of privacy, personalised services, and exclusive banking facilities. The following reasons highlight the need for separate dedicated branch:
It was in keeping with SBI’s motto of being the “Banker to every Indian”. An ultra HNI expects best and instant service, e.g. banking round the clock. SBI could not have provided the same services at a branch where non-HNI customers also had their accounts, as this would alienate them. The SBI Kohinoor Banjara branch received many account opening requests within a few days of its opening. In addition, it also broke even in Studying the net worth of each HNI closest to the pilot branch for estimation of the minimum deposits to be kept at that SBI branch per customer. Studying the spending/investing and saving patterns of the HNI’s for the pilot branch. Developing banking products/solutions that fit most of the HNI customers, if not all. Sending invitations and personal visits by higher management to those HNI’s compatible with the above criteria, and then opening the branch, subsequently.
Q: In your judgment, is the concept ready to be rolled out successfully throughout the country? Assess both the positives and negatives in your assessment and then make a final call.
A: Pros Cons Huge market size of INR 235 Trillion, divided into approx. 219,000 families by 2015-16. Huge expenditure involved in setting up of these UHNI banking branches due to the geography and demographics. Opportunity to be the first in the market to cater exclusively for UHNIs. Separate operating model implementation for each branch/city required to fit the taste for each and every HNI. SBI has a legacy image of being an archaic organization. It had to break out of this notion to create Kohinoor Business Model. Segmentation required redefining processes. On the other hand, SBI is known as the common man’s bank. It did not want to send off wrong signals that it is not focusing on its existing customers and was no longer catering to all.
