Customer Service and Product Promotional Strategy of BRAC Bank
BRAC Bank intends to set standards as the Market leader in Bangladesh. It will demonstrate that a locally owned institution can provide efficient, friendly and Modem full- service banking on a profitable basis. The main objective of the study is to conduct an assessment of the implementation of Customer Service Quality and Product Promotional Strategy of BRAC Bank Limited Besides, the objective of the study is to have a clear knowledge about the service delivery status of private commercial Bank and different types of service they provide to the costumer.
BBL is a well established Bank in Bangladesh. It is providing maximum services to the customer then other Bank. Entering as a new bank in private banking scenario of Bangladesh, BRAC Bank is constantly try to cross the obstacles regarding typical business oriented ideas and come up with innovative curtailed to its Consumers need to harvest maximum benefit for them. BRAC Bank Limited is a third generation bank inaugurated on 4 July 200 I with a mission of providing best banking service in the country to enhance economic activity.
BRAC Bank is maintaining it’s competitiveness by leveraging on its on line Banking Software and modem IT infrastructure. It is the pioneer amongst the local banks in introducing innovative products like SMS Banking, Phone Banking, and Internet Banking and so on.
Banking Industry is one of the most promising industries of our country. The importance of the sector revealed through its contribution in the economic growth of the country. This sector accelerates economic growth through mobilizing funds from surplus unit to the deficit unit. Banking Industry is moving towards rapid changes due to technological innovation and diversified needs of its customers.
Banks deal with the most important factor of the economy i.e. Money. It flows funds from surplus unit to deficit unit and through this it facilitated the efficient allocation of the resources as well as accelerated economic growth. This sector is moving towards new dimension as it is changing fast due to competition, deregulation, financial, reforms. As the pace of globalization competition in banking sector is increasing very fust. Banks are becoming more customers oriented and offer High tech customized products to its target market to hold the market .Our central bank always keep monitoring banks performances. Individual hanks also need to assess their own performance to satisfy the parties those are related to its growth.
- For Shareholders.
- For depositor.
- For Bangladesh Bank.
- For its own Assessment to view the future growth and profited.
History of BRAC Bank
BRAC Bank Limited, with institutional shareholdings by BRAC, International Finance Corporation (IFC) and Shore cap International, has been the fastest growing Bank in 2004 and 2007. The Bank operates under a “double bottom line” agenda where profit and social responsibility go hand in hand as it strives towards a poverty-free, enlightened Bangladesh.
A fully operational Commercial Bank, BRAC Bank focuses on pursuing unexplored market niches in the Small and Medium Enterprise Business, which hitherto has remained largely untapped within the country. In the last six years of operation, the Bank has disbursed over BDT 7500 corer in loans to nearly 2,00,0,000 small and medium entrepreneurs. The management of the Bank believes that this sector of the economy can contribute the most to the rapid generation of employment in Bangladesh. Since inception in July 2001, the Bank’s footprint has grown to 56 branches, 429 SME unit offices and 112 A TM sites across the country, and the customer base has expanded to 4,65,000 deposit and I,S7,OOO advance accounts through 200S. In the years ahead BRAC Bank expects to introduce many more services and products as well as add a wider network of SME unit offices, Retail Branches and A TMs across the country.
BRAC Bank intends to set standards as the Market leader in Bangladesh. It will demonstrate that a locally owned institution can provide efficient, friendly and Modem full service banking on a profitable basis. It will produce earnings and payout dividends that can support the activities of BRAC, the Bank’s major shareholder. Development and poverty alleviation on a countrywide basis needs mass production, mass consumption and mass financing. BRAC Bank goal is to provide mass financing to enable mass production and mass consumption, and thereby contribute to the development of Bangladesh. The Bank’s goals are thus aligned with those of BRAC.
Shareholding Structure: The shareholding structure of BRAC Bank Limited consists of different group with institutional shareholdings by BRAC, International Finance Corporation (IFC), Shore cap International and general public is also included through IPO.
BRAC, a national, private organization, started as an almost entirely donor funded, small scale relief and rehabilitation project initiated by Fazle Hasan Abed to help the country overcome the devastation and trauma of the Liberation War and focused on resett1ing refugees returning from India. Today, BRAC has emerged as an independent, virtually self financed paradigm in sustainable human development It is one of the largest Southern development organizations employing 97,192 people, with 61% women, and working with the twin objectives of poverty alleviation and empowerment of the poor.
International Finance Corporation
International Finance Corporation (IFC) is the commercial wing of World Bank. Using certain channels and overseas representatives, IFC it helps local financial institutions find profitable ways to target small and medium sized companies. Funding comes from the Asian Development Bank, Canada, the European Commission, the Netherlands, Norway, the United Kingdom and IFC itself IFC is a 19″10 shareholders in BRAC Bank. A new assistance program signed in August 2005 aims to double the bank’s number of small and medium enterprise clients in 18 months through campaigns to target women entrepreneurs and rural clients, introduce new products and train branch managers.
ShoreCap International Ltd. is an international private non-profit, equity company seeking to invest in small business banks and regulated micro finance institutions in countries with developing and transitional economies. Founded in mid 2003, ShoreCap has a current base of $28.3 million in capital commitments and seeks to support the growth of development finance institutions in Africa, Asia and Eastern Europe. The institution has made investments totaling $7 million in Bangladesh, India, Cambodia, Armenia, Mongolia and Kenya.
ShoreCap typically invests between $500,000 and $2 million for an ownership position of 10-25% of a company. As a minority shareholder, ShoreCap seeks financial institutions with a strong, experienced management team and a committed set of local development-minded investors. ShoreCap currently owns 18% of BRAC Bank Limited.
BRAC Bank will be the absolute market leader in the number of loans given to small and medium sized enterprises throughout Bangladesh. It will be a world – class organization in terms of service quality and establishing relationships that help its customers to develop and grow successfully. It will be the Bank of choice both for its employees and its customers, the model bank in this part of the world.
“Building a profitable and socially responsible financial institution focused on Markets and Business with growth potential, thereby assisting BRAC and stakeholders build a just, enlightened, healthy, democratic and poverty free Bangladesh”.
- Sustained growth in ‘small & Medium Enterprise’ sector
- Continuous low cost deposit growth with controlled growth in Retained Assets
- Corporate Assets to be funded through self-liability mobilization. Gl’Owth in Assets through Syndications and Investment in faster growing sectors
- Continuous endeavor to increase fee based income
- Keep our Debt Charges at 2.5 % to maintain a steady profitable growth
- Achieve efficient synergies between the bank’s Branches, SME Unit Offices and BRAC field offices for delivery of Remittance and Bank’s other products and services
- Manage various lines of business in a fully controlled environment with no compromise on service quality
- Keep a diverse, Mr. Hung team fully motivated and driven towards materializing the bank’s vision into reality.
BBL’s strength emanates from their owner – BRAC. This means, we will hold the following values and will be guided by them as we do our jobs.
- Value the met that we are a member of the BRAC family
- Creating an honest, open and enabling environment
- Have a strong customer focus and build relationships based on integrity, superior service and mutual benefit
- Strive for profit & sound growth
- Work as a team to serve the best interest of our owners
- Relentless in pursuit of business innovation and improvement
- Value and respect people and make decisions based on merit
- Base recognition and reward on performance
- Responsible, trustworthy and law-abiding in all that we do
- Fastest growing bank: BRAC Bank has been the fastest growing Bank in 2004 and 2007. It is one of the local private commercial bank that set the standard of banking for the leader bank of Bangladesh banking industry.
- Leader in SME financing through 429 SME unit offices: The idea of SME unit are become very popular to the BRAC bank customer. In the last six years of operation, the Bank has disbursed over BDT 7500 corer in loans to nearly 2,00,0,000 small and medium entrepreneurs.
- Biggest suit of personal banking & SME products: BRAC Bank has variety of products for their customer in Branch and also in SME office.
- Large ATMs (Automated Teller Machine) & POS (point of Sales) network. Now BRAC Bank has 112 ATM Machine all over the country.
Performance and investment impact
- Four-fold growth in size and earnings in three years.
- Loans outstanding grew by 87% during 2007 and total deposits increased by 51% to USS200m.
- SME lending ofUSS81.7m to nearly 15,000 SME customers in 2007.
- Growing retail market presence with 125,000 account holders and 60,000 cash cards in circulation.
- The bank now has a total of2500 full-time staff (475 in 2003).
- BRAC Bank customer surveys reveal that an estimated 18,000 new jobs have been created thanks to SME loans helping business expansion.
- BRAC Bank’s SME focus has proved so successful that many of the larger commercial banks are now competing for customers in this sector.
Wings of BRAC Bank Ltd.
BRAC Bank Limited consists of four major business divisions namely:
- Corporate Banking Division
- Retail Banking Division
- Small and Medium Enterprise (SME)
- Foreign Trade & Treasury
Corporate Banking Division:
Corporate Division provides full range of commercial banking products and services to any potential corporate clients including multinationals, large or medium local corporate, NGOs, institutional bodies. The Corporate Banking Division has a centralized structure through on-line banking system. Any credit facility is processed at the Corporate Banking Division, Head office. After sanctioning of the facility, the limit is put on line and the customer can enjoy the facility from any of the BRAC Bank branches. Strict adherence to intemal control guidelines and other legal and statutory compliance are followed. The Credit approval process involves separate Credit Division, the Managing Director and finally the Board.
Other departments like Foreign Trade, Treasury, and Credit Administration etc. play the support role for a comprehensive range of service to the Corporate Banking Division.
Retail Banking Division: Retail Division offers a wide array of lucrative and competitive banking products to the individual customers of the bank. Currently there are six lending products and a number of other attractive new products will be launched shortly. It also offers different types of term deposit scheme and attractive STD & Savings deposit schemes giving interest on daily balance.
Small and Medium Enterprise (SME): SME is an additional and specialized horizon of the bank which serves the bank’s special focus in promoting broad based participation by catering to the small and medium entrepreneur. The network of SME has already been established throughout Bangladesh.
The SME market in Bangladesh is large. BRAC Bank is the absolute market leader in the number of loans given to small & medium enterprises throughout Bangladesh. The Bank disburses almost BDT 700crore of their loan to the SME unit SME unit is dealing with small scale loan which is known as “ANONNO”
Foreign Trade & Treasury: Treasury Division is one of the major divisions of BRAC Bank. Treasury Division deals with money market All treasury related products are processed in conformity with the Bank’s Operational, Trading, Money market, Overnight, Term placing, Deal settlement, Commercial position keeping, Treasury, Credit, Finance & other applicable policies. Treasury Operations calculates investment figure, prepares the auction application, forwards the application to Bangladesh Bank for Bid and Treasury Operations maintains and reconciles all accounts with foreign and local banks.
Bank Products or Service
At BRAC Bank Customers are served by dedicated Account Managers who understands their specific requirements. The following services are rendered to BBL’s valuable customers-
Cash management: BRAC Bank’s national Collection Services (NCS) is designed to assist corporate with nationwide collection requirements by providing faster funds availability in a cost- effective manner.
SME Products: SME is an additional and specialized horizon of the bank which serves the bank’s special focus in promoting broad based participation by catering to the small and medium entrepreneur. The network of SME has already been established through out Bangladesh. The SME market in Bangladesh is large. BRAC Bank is the absolute market leader in the number of loans given to small & medium enterprises throughout Bangladesh. The Bank disburses almost BOT 700crore of their loan to the SME unit. SME unit is dealing with small scale loan which is known as “ANONNO·
Probasbi Products: As part of the total banking solution it has introduced an innovative and one of its kinds Remittance Service under the style and name “Secured & Easy Remittance Service” (SERS). The aim of the program is to introduce easy and secured remittance service whereby people will be comfortable and secured in remitting funds without hassle and delay. Using the countrywide network of BRAC comprising more than 1100 field offices the SRS will ensure secured and only 24 hour lead time delivery of remittance anywhere in Bangladesh.
Most of the Bank In our country are operating locally basis. That is why most of their functions are concentrated on retail banking. BRAC Bank Limited is not exception of them. It has 56 Branches all over Bangladesh. Retail banking is divided into three divisions. They are given below:
- Deposit product
- Loan product
- Card product
Different Types of account:
Current Account: An absolute transactional account through which a customer can transact any amount. This is a Cheque bearing account normally no interest paid, no bar on deposit and withdraw and it has easy access to other deposit and loan facilities. This account is normally operated by Businessman.
Savings Account: A type of transactional account through which a customer can transact on a daily basis. Special features of this account include: Limitation on transaction & Size of transaction, large withdrawal require prior notice, Cheque bearing account, Interest paid on saving rate, Access to other deposit facilities and loan facilities except overdraft facility.
Short term Deposit account: An absolute transactional account through which a customer can transact any amount with prior notice. Special features of this account include: Normally operated by businesses with less transaction and individual, more like current account, Interest paid, No bar on deposit & withdrawal, Access to other deposit facilities and loan facilities, Bar may be imposed on balance maintenance.
Term Deposit Account: A type of non transactional Account and the amount payable after maturity only. Special features of this account include: Amount can be fixed by both business & individual with permission from bank, Interest paid is comparatively higher than T A, No access to other deposit facilities and loan facilities, Term Deposit receipts are given from bank, Example 1/3/6 month Fixed Deposit Y, year fixed deposit, DPS etc.
Foreign Currency account: A type of Transactional accounts both national & foreigners can open. Special features of this account include: Rational require for opening such accounts (Business, Remittance, Foreign income), Special documentation require, Only authorized dealer (AD) branches can open, Can be interest bearing / noninterest bearing ,Maintained as per foreign Exchange guideline of Bangladesh Bank.
Visa Debit Card: VISA cards are accepted at all BBL, VISA & Q-Cash ATMs & POSs.
Aarong Card: It’s a co-branded ATM Card with special cash back feature. Unlike other ATM cards, the holder of this card can enjoy 5% cash back facility while shopping at any Aarong outlet and the discount shall be automatically credited to customer’s account with BRAC Bank.
Alico Card: It’s a co-branded ATM Card with Life Insurance coverage. Unlike other
ATM cards, the holder of this card can enjoy a special life insurance facility.
DIA Gold Card: It’s a co-branded ATM Card with special cash back and cash discount feature_ Unlike other ATM cards, the holder of this card can enjoy 10% cash back facility while buying diamond products and 8% cash discount on the making charge of purchased gold items at any DIA GOLD outlet.
DEPOSIT PENSION SCHEME (DPS):
A certain amount is deposited every month m an account (also called monthly pension scheme), which is accumulated over a specified period of time_ Deposit Pension Scheme (DPS) is the most attracting deposit scheme that is offered by BRAC bank limited_ Deposit Pension Scheme is specially designed for the fixed monthly income group_ Upon maturity the total amount (total accumulated deposits with accumulated accrued interest) is made available to the DPS account holder.
Special Feature of this Scheme:
- Monthly installments can be as low as Tk. 500 or any multiples of it
- Choose any day as your installment date
- Receive a Savings a/c with a personalized cheque book
- On-line banking facilities
- You don’t need to stand in a long queue to deposit your DPS Installments. You can always, deposit more than one installment in your savings account and we’ll automatically transfer the installment to your DPS account on due dates
BRAC Bank is well poisoned to be the leading Personal Banking business amongst the local private banks. Bank’s conscious efforts in brand building, introducing and supporting new packaged products, developing PB organization along with non-traditional delivery channels have resulted in good brand awareness amongst its chosen target markets. Installment based savings schemes are a major category of saving instruments amongst mid to upper middle income urban population.
DPS is an installment based savings scheme (Deposit Pension Scheme) of BRAC Bank for individual clients. The key differentiators of the product will be-
Amount of monthly deposit – The scheme offers the clients the flexibility of tailoring the amount of monthly deposit based on his monthly cash flow position. The minimum monthly deposit will be BUT 500.00 The client will have the option of depositing any amount in multiples of BDT 500.00.
Flexible tenor of the scheme- The client has flexibility of deciding on the tenor of the scheme in-terms of number of months. However, the minimum tenor would be ten years.
Flexibility to open any number of DPS Account- A client can open maximum five DPS accounts in client’s name, in his/her spouse’s name or in the name of his/her children or in joint names with any of his/her family members.
Premature encashment – if any client closes the deposit account before one year, she/he will not be entitled to any interest Account running more than a year will be eligible for the prevailing interest offered in the savings account
NO Late payment fee – Clients failing to deposit any installment will not pay any late payment fee
Payment through Account – Clients will have to open an Account with BRAC Bank Limited and a standing instruction will be executed for auto-debit to effect the monthly installment.
OD Facility against DPS – Clients will have the option of taking advance up to 90″10 of the deposited amount at the time of application. However, to be eligible for the OD facility, the account must be at least 2 years old.
Restriction and Client Eligibility
- Any Bangladeshi Citizen attaining 18 years of age will be eligible to avail this product by opening an account in any of the branches of BBL. Branch will ensure compliance with account opening formalities.
- A minor operated by the legal guardian may also open the account.
- The tenor and the deposit amount agreed by the applicant and accepted by the Bank at the time of opening the account cannot be changed afterwards.
Closure of Account
The account will immediately cease to operate in case of the following:
- Death of the account holder.
Settlement of the Account Documentation- In order to open the account, the account holder will execute the following documentation:
- Fulfilling Account opening formalities
- Filling up the DPS Application form
- 2 copy Pass port size Photograph of the applicant
- 1 copy passport size photograph of the nominee attested by the applicant
Strategic Promotion Plan: BRAC Bank select both type of qualitative and quantitative promotional tools for their product promotion.
Qualitative Promotion plan is the future goals of BRAC bank what they will try to achieve within the next few years. BRAC bank set short-term goals for 5 years & within that period of they devote all their resources & skilled manpower to avail the desired goals or targets. After the introduction BRAC bank has proved itself the leading small loan provider to small businesses & entrepreneurs in this industry. BRAC bank does not want to confine its business only to taking deposits & giving away loans but it has a well-diversified plan to deliver all the services provided by any multinational bank. BRAC bank’s ultimate goal is to become the market leader in banking industry & to reach the apex it has the following short-term goals.
- Promotional Tools: Now days a business or organization success totally depends on what the promotional tools they using for their service or product. BRAC Bank use Billboards, Brochures, Leaflet, prospectus, Newspaper and on road advertisement for the promotion. BRAC Bank’s BSSO (Branch sales and Service Officer), CRO (Client Relationship officer) and Sales people is the main promotional party. BRAC bank has a satisfied customer segment they also promote the product to other client.
- Geographic Expansion: For any successful business expansion is an inevitable part of the strategic plan. Crossing the border or define geographical boundaries indicates the growth of the business. BRAC bank started with a mission statement “The Fastest Growing Bank”. Indeed it is growing very rapid pace. BRAC bank is planning to set Branches to more than 60 districts within the next 5 Years. BRAC bank also established a branch in Afghanistan to prove its capital strengths compare to other local banks.
- New Customer Segment: BRAC bank is blessed with a high degree of corporate clients & household savings. BRAC bank is now trying to identify new segments & customer groups to facilitate its rapid expansion. The bank’s highly talented HR unit discovers that a large number of private university students belong to mostly affluent families. So they found potential business opportunity there if they can make A 1M card available for this segment To make this plan a real success BRAC bank has appointed highly motivated & energetic sales force & they are running various promotional campaigns in several private universities.
- New POS, Booth: BRAC bank already established ATM booth to as many as 112 locations. By the end of 2009 they are going to set A1M booths to more than 200 locations across the country. BRAC Bank is also providing point of purchase (POS) facility. This is nothing but making instant payment for the purchase at the location of purchase. Famous brands like Artistic, Aarong, DIA gold, PQS etc are now part of POS service. BRAC bank is planning to collaborate with at least 30 more brands to take the POS facility.
- Branded Card: BRAC has a plan to collaborate with VISA & Master Card to provide Branded card to their Corporate & High Class clients.
The company’s Quantitative Promotional plans are the objectives of the company that they must achieve within a particular time frame. The bank’s primary concern is making profit & thereby assisting the high growth potentials. At present the bank has 200000(two hundred thousand) deposit holders of various kind & the bank will try to get another l00000 (one hundred thousand) clients in the coming I years.
Increase sales: Revenue is the heart of any business. A bank’s main source of income is the interest earned on loans provided, so a bank must have sufficient fund to provide loans & maintain strong liquidity positions. The main source of fund is the deposits of clients to various accounts like savings, current, fixed deposit scheme etc. Recently BRAC bank has taken massive promotional programs to entice a vast group of customers to accept various services if offer.
Selling Style: For Transaction Account: New Business Selling Actually the concept of BRAC ATM is totally new in Bangladesh. It carne to the ATM market at the beginning of 2005. AS the products are new so they are following new business selling style for their ATM card, which is under TA (Transaction Account).
For (High Network) HNW: Missionary Selling HNW (High Network) sales manager deals with the sale of bulk customers like a corporation where they follow Missionary Selling.
For new business selling the Brae Bank sales executives need to be very creative and enthusiastic. So they have to do their homework about the prospect on and on under the supervision of Sales Manager and Sales Team Leader.
For Missionary Selling Brae Bank basically send a bit higher level sales officials sometimes the Sales Manager as they deal with Bulk customer.
BRAC bank has now mainly four group of customer:
- Existing customers
Marketing Activities of BRAC Bank Limited.
Current marketing activities:
The current market activities of BBL are as follows:
- Promoting their existing product through their branches and outlets.
- BRAC Bank Participates in 1st Bangladesh Remittance Fair at Chittagong.
- BRAC Bank receives the prestigious DHL – DAILY STAR BEST BUSINESS AWARD.
- BRAC Bank donates Tk. 50 Lacs to ICDDR, B’s Dhaka Hospital.
- BRAC Bank Supports DMP to Build “One Stop Service Center” at DC Police Office, Tejgaon in Dhaka.
- BRAC Bank & Persona Organizes a Workshop on Beauty Solutions.
- BRAC Bank Sponsors a Workshop for Professional Women.
- BRAC Bank Launches its “Premium Banking Lounge”.
- BRAC Bank Distributes Prizes of Wall Magazine Competition to commemorate the event of International Women’s Day 2009.
- BRAC Bank signs MoU with Apollo Hospitals Dhaka.
- BRAC Bank gets ICAB National Award.
- BRAC Bank receives National Award as the Highest VAT payer for the financial year 2007-2008.
- BRAC Bank participated in Career Fair.
- Launching of SMS and Internet Banking.
- Bangla Academy recognizes BRAC Bank for its support
Societal marketing concept
Society, Customer and Profit these three are the factors of societal marketing concept.
Overall marketing size
In local office of BRAC bank ltd. the customer base has expanded to 400,000 deposit and 83,000(approx). Among these customers there are individuals, corporation, NFBI, govt. bodies, NGO, autonomous bodies etc. but most of the customer of bank is corporate customers.
Annual market growth rate: The product quality of BRAC bank is high. They have different kinds of product and them always tries to ensure good quality products for their customers.
Brand reputation: The band reputation of BRAC bank ltd. is also high. They have 9 years experience in banking sector. And in this period of time they tried to provide their customer verities of good quality products and services. Patience, focus, transparency, goal, experience, loyalty, care, sincerity, foresight, punctuality, trust, and knowledge these 12 commitments help the bank to create-a strong band.
The distribution network of BRAC bank ltd. Is strong enough to distribute the marketing activities of the bank throughout the country. So far BRAC bank has 56 branches and 112 A TM booths all over the country from which they are doing their marketing activities. Other than this they are participating in different occasions and events and promotional activities to promote their bank. The bank is also participating in social welfare activities and charity show.
Customer Service Quality
Importance of Good Customer Service: Good customer service always has to play some rule, BRAC Bank customer service is always tried to provide certain service to their customer. Those are:
- Customer Satisfaction: Customer satisfaction is the main purpose of customer service, All the branch staff is always try to give the best service to their customer.
- Building Relationship: BRAC Bank treat customer as their guest That’s why floor supervisor always cordially invited the customer when they enter into the branch and serve them until they leave the branch, That’s help customer to make loyal to the Bank,
- Customer Expectation: As a service organization BRAC Bank always try to provide the best service that expected by its customer.
- Higher Service Charge – Expectation of better Service
- Positive & Negative Word of Mouth: BRAC Bank is always following the motto ‘Customer is always right’ and also behaves softly with the customer.
- Customer Loyalty: BSSO and CSM always show sympathy in the any sad news of the customer or share a Share a happy moment with their existing customer. Ex: Send Eid card, Calendar, Inform about new facility,
- Increasing market Competition: BRAC Bank introduce new strategy day by day to make their potential client as their loyal customer.
Service Quality in the Eye of BRAC Bank:
- Service quality is service check points for customer service or any other issues in branches and backward linkage departments.
- Service Auditing and Monitoring
- SQ works with process & people part of customer Service
Purpose of Service quality:
- Access & Monitoring the performance-of CSO & OCCS on Regular basis.
- Process Designing and Reengineering
- Complaint handling
- Launching different service related campaign
- Design new customer service
- Asses and monitor customer Service standard in branches
Can bank Control over their Customer:
- 1% die
- 3% move away
- 5% seek alternatives or develop other relations
- 9% begin doing business with the competitors
- 14% are dissatisfied with the product or service
- 68% are upset with the treatment they received
That means bank have some control over 96% of the reason customers stop doing business with bank.
Customer service Quality Rules (Code of Conduct) of BRAC Bank:
Know your customer (KYC): When a client comes to open an account, try to get a clear idea about that person prior to open an account. Common facts required to be noticed are:
- Social Position: Take prior permission from Head office and be careful in case of opening account for people who are Politicians, Customs, Technocrats, Judicial, Defense personnel, law enforcing agency, Income tax, Vat authority etc.
- Occupation: Type & nature of Business job nature and duration. Check the Trade License / employment documents. Take Prior permission from Head office and be careful when the occupation is in jewelry, Exchange House, Manpower, Courier Company, Hotel & Restaurant, Machine parts.
- Income Level: Check whether the level of income complies with the average industry income level for the sector and position where the customer belongs.
- Address Level: At least one of the addresses (permanent / present / work) mentioned in the account opening from should be verified by personal visitation of DSE or other officer of the Bank.
- Purpose of opening the account:
SWOT Analysis of BRAC Bank Ltd.
SWOT analysis is an important tool for evaluating the company’s Strengths, Weaknesses, Opportunities and Threats. It helps the organization to identify how to evaluate its performance and scan the macro environment, which in turn would help organization to navigate in the turbulent ocean of competition.
Company reputation: BRAC bank has already established a favorable reputation In the banking industry of the country particularly among the new comers. Within a period of 8 years, BBL has already established a firm footing in the banking sector having tremendous growth in the profits and deposits. All these have lead them to earn a reputation in the banking field
Sponsors: BBL has been founded by a group of eminent entrepreneurs of the country having adequate financial strength. The sponsor directors belong to prominent resources persons of the country. The Board of Directors headed by its Chairman Mr. F H Abed. Therefore, BBL has a strong financial strength and it built upon a strong foundation.
Top Management: The top management of the bank is also major strength for the BBL has contributed heavily towards the growth and development of the bank. The top management officials have all worked in reputed banks and their years of banking experience, skills, expertise will continue to contribute towards further expansion of the bank. At BBL, the top management is the driving force and the think tank of the organization where policies are crafted and often cascaded down.
Facilities and equipment: BBL has adequate physical facilities and equipments to provide better services to the customers. The bank has computerized and online banking operations under the software called Financial banking operations. Counting machines in the teller counters have been installed for speedy service ant the cash counters. Computerized statements for the customers as well as for the internal use of the banks are also available.
Impressive branches: This creates a positive image in the minds of the potential customers and many people get attracted to the bank. This is also an indirect marketing campaign for the bank for attracting customers. 56 branches of the bank are impressive and are compatible· to foreign banks.
Interactive corporate culture: BBL has an interactive corporate culture. Unlike other local organization, BBL’s work environment is very friendly, interactive and informal. There are no bidden barriers or boundaries while interacting among the superior or the subordinate. The environment is also lively and since the nature of the banking job itself is monotonous and routine, BBL’s likely work environment boosts up the spirit and motivation of the employees.
Team work at mid level and lower level: At BBL’s mid level and lower level management, there are often team works. Many jobs are performed in groups of two or three in order to reduce the burden of the workload and enhance the process of completion of the job. People are eager to help each other and people in general are devoted to work.
Advertising and promotion of SME loan: This is a major setback for BBL and one of its weakest areas. BBL’s adverting and promotional activities are satisfactory but it SME loan is not advertised well. It does not expose its SME product to general public and are not in lime light. BBL does not have neon sign or any advertisement for SME loan in the city. As a result people are not aware of the existence of this bank.
NGO name (BRAC): BRAC is one of the largest NGO of the world and it is operating its activities in Bangladesh. BRAC bank is not a NGO bank but many people of them country consider it as a NGO bank like Grameen Bank which is not correct.
Low remuneration package: The remuneration package for the entry and the mid level management is considerably low. The compensation package for BBL entry level positions is even lower than the contemporary banks. Under the existing low payment structure, it will be very difficult to attract and retain higher educated employees in BBL. Specially CRO’s are not satisfied with compensation package provided to them.
Diversification: BBL can pursue a diversification strategy in expanding its current line of business. The management can consider options of starting merchant banking or diversify in to leasing and insurance. By expanding their business portfolio, BBL can reduce their business risk.
Product line proliferation: In this competitive environment BBL must expand its product line to enhance its sustainable competitive advantage. As a part of its product line proliferation, BBL can introduce the following products.
This is the fastest growing modem banking concept. BBL should grab this opportunity and take preparation for launching ATM. Since BBL is a local bank, they can form an alliance with other contemporary banks in launching the ATM.
Multinational banks: The emergence of multinational banks and their rapid expansion poses a potential threat to the new growing private banks. Due to the booming energy sector, more foreign banks are expected to arrive in Bangladesh. Moreover, the already existing foreign banks such as Standard Chartered are now pursuing an aggressive branch expansion strategy. This bank is establishing more branches countrywide and already launched is SME operation. Since the foreign banks have tremendous financial strength, it will pose a threat to local banks.
Upcoming banks: The upcoming private local banks can also pose a threat to the existing private commercial banks like BBL. It is expected that in the next few years more local private banks may emerge. If that happens the intensity of competition will rise further and banks will have to develop strategies to compete against an on slaughter of foreign banks.
Contemporary banks: The contemporary banks of BBL such as Dhaka bank, prime bank and Dutch Bangla are its major rivals. Prime bank and other banks are carrying out aggressive campaign to attract lucrative clients as well as big time depositors.
The success of any product is largely dependent on customer’s satisfaction and acceptance. Selling a product or a service is just the beginning of a relationship, which is to be built and maintained over the year. Only this way the sense of loyalty is established in customer’s mind.
BRAC Bank Limited with the commitment to provide Excellence service in Banking always tries to offer better product to the customers as well as keeping in mind about the volatility of the market Here in this part I have shown demand of customer satisfaction is related with its customers’ financial position and demand (by their occupation) and are they satisfied with BBL or not.
A Survey on Customer Satisfaction
Research approach: We have surveyed on the people of different occupation. Today the demand of Deposit and loan is rapidly increasing. At the preliminary stage, only rich people were interested to take service from BRAC Bank. Now middle class segments are also interested to this sector. So we have surveyed on both high and middle class people. So I have tried my best to go through most of the places.
Contact Method: I have contacted to the persons individually with a questionnaires. Then I gave them both close-ended questions and open-ended questions. Most of the person gave answer of my entire question. Some did not because of their busyness and lacking of knowledge about loan procedure.
Sample design consists of three parts-
- Sample size
- Sampling frame
- Sample technique
- Sample size: for this research (the survey on customer satisfaction) the determined sample size is 100.
- Sampling frame: Opening an account is depending on the occupation of the family. He may be a company owner of related to any other type of business and he may be service holder. So the survey is conducted on these persons – businessmen & service holders.
- Sampling technique: For this research the researcher follow the convenience sampling. As here the main objective was to gather knowledge about the customer satisfaction.
Porter introduces five forces analysis. According to this framework, the intensity of competition determines the potential for creating abnormal profits by the firms in an industry. Whether or not the potential profits are kept by the industry is determined by relative bargaining power of the firms in the industry and their customers and suppliers.
Threat of new entrants:
Economies of scale: The economies of scale of banking industry are low. As the- large percentage of cost of banking industry is fixed. So, by the increasing number of customer per head fixed cost will be decreased, as economies of scale of this industry are low. So, this low economy of scale will attract the new entrant. So, threat will be high. We also observe that the low economies of scale give a signal of high profit. As a result our banking industry is flourishing which is the cause of high threat of new entry.
Product is undifferentiated: In the banking industry the product is different types of deposits and different types of loan. The banks belonging to the banking industry more or less provide the same type of product That means the different banks serve the customers with more or less same types of offerings. So, it can be said that the product is undifferentiated which is signal of threat of new entrants.
Capital requirements: For entering into the banking industry it requires a large capital. So, from this perspective the threat of new entrants is low. If we consider capital requirement then in the Bangladesh banking industry the new entrants will be few.
Customer switching cost: In the banking industry the switching cost is very low as the product is undifferentiated and more or less same type of services. So, customer can get the same satisfaction with all banks. And if customers want to shift that will be easy because the switching cost is low. So, the threat of new entrants is very high.
Incumbents don’t control distribution channels or sources of supplies: In the banking industry we can see that the Bangladesh bank has recently added some rules and regulation regarding the source of income of the depositors. So, th is incumbent has control distribution channels or sources of supplies in banking industry. From the view point threat of new entrants is low.
Bangladesh Bank regulation: Banking industry is totally regulated by Bangladesh bank. To start a new bank it has to face very complicate regulations. The bank must have to posses TK.100 core of paid-up capital. And other restrictions have to maintain.
Power of buyers:
Depositors and borrowers both are the major buyers of banking industry. Besides, some customers get other exceptional services from banks like – discounting bills, money drafting, over drafting, credit card service, A TM service, etc. Bargaining power of the buyers can be measures through the following –
Concentration of buyers and volume of purchase: Buyers of the banking industry are not much concentrated as there are a huge number of customers of banks. Though the buyers trade on high volumes, buyers markets are not concentrated.
Product Undifferentiated: General products of banking industry are undifferentiated. A little bit difference may exist Maximum services of bank are unique. Interest rate and service charges differ from bank to bank. But these differences are not much significant
Buyers’ backward integration: There is a weaken threat of backward integration from borrowers but strong from the depositors. Depositors have the scope to invest their fund directly rather to via bank. They can invest in any business, share market or in any other sector and can gain profit, what is their ultimate goal. But it is quite hard for the borrowers to communicate directly with the depositors. So, the threat from the borrowers is weak.
Transparency of production cost: The banking operations are in general transparent. The interest rate of sector, cost of each services, the buyers know investment planning of banks, their ability, etc all. So, the buyers have a clear idea about the productive cost.
Products’ impact on quality of final product: Bank is mainly used as a source of money. Either to increase value of money through depositing or to gain profit by borrowing money. Whatever the job the quality of the goal or product of buyers is not much influenced by the point from where the money comes from. Through the interest rate is different bank to bank, it is not much different to influence the job of the buyers.
Power of suppliers: Suppliers are directly related to manufacturing industry. But in banking industry there is no vendor as it is a service industry. For banking industry there is no need of raw materials like the manufacturing industry. So, there is no supplier exactly like that. But here we can consider the necessary commodity that is related to administration of a bank like – PC, papers, pen, other furniture etc. But today the most important commodity is software. So, the sources supply this commodity to bank can be called supplier.
So, for this view, it can be said that the power of suppliers is not only low but also has minimal impact on this industry.
Threat of substitutes:
Few substitute of banking services are available. Other savings institutions, Leasing companies, Credit unions, Pension funds, Insurance companies, Finance companies and Mutual funds are most substitute service source of banks. We justified the following points to measure the threat of the substitute in banking industry –
Profitability of industry of substitute Service: Profitability of the substitute institutions is not higher than banking industry. As the substitute industries invest their funds for long run. But bank can invest their money for the short run rapidly. Also the risks of the substitute industries are higher than the banking industry. Bank also provides some exceptional services, like Discounting bills, etc which attracts the customers.
Improvement of Substitute services: Substitute service is improving its price and performance. But still they cannot be the perfect substitute of the service of bank. So, the above analysis viewed that the threat of substitute are lower in the banking industry.
Intra – industry rivalry:
Number of competitors: There are a huge number of competitors in the banking industry of Bangladesh. Now in Bangladesh about 49 commercial banks are participating. So, a greater degree of competition exists in this industry, which creates high degree of intra-industry rivalry.
Growth of industry: At a certain point of the life cycle the industry was increasing rapidly. It was after year 1995. But now the growth of the industry has come almost to a steady rate. As the intra-industry rivalry is fiercest, the industry is growing slowly.
% of Fixed Cost: Large percentage of the banking industry is fixed. As the bank mainly providing service to its customer the major elements of the business is related to fixed cost It also reflects the high degree of intra-industry rivalry.
Storage cost of Product: As the banking industry provides services to its customer there is no question of store product. So, the industry has no storage cost ultimately. So, it gives an opposite look.
Service undifferentiated: Service of all banks is mostly undifferentiated. This unique feature creates rivalry among the industry participants.
Buyers’ switching cost: Customer of the banking industry face comparatively low switching cost while they switch from one bank to another. But still there is a question of efficiency and reliability of the bank to customer about their service. As the switching cost is low, it is a threat to the bank and it creates great rivalry.
Exit barriers: Exit barriers for the banks are not much high. If the board of bank wants to have the industry easily it can do it by selling the bank to others. So, the rivalry created by this point is much low.
Findings and Problem Identification
Findings of the Study: From the view point of Porter’s 5 forces a conclusive result regarding the potential profitability of the BRAC Bank is identified:
- As the threat of new entrants is high that means competition will be increased in the future, which will reduce the profit.
- Power of buyer is minimum in the banking industry that will increase the profit.
- As the power of suppliers is ignorable, it cannot influence the profit. So, with this force we cannot predict the potential profit.
- Threat of substitutes is low which obviously give positive sign for predicting a potential profit.
- If the intra- industry rivalry will increase at an increasing rate and it create a unhealthy competition then it will surely reduce the profit.
From the view point of financial performance:
- Increasing trend in foreign exchange business, profit and investment position.
From the view point of performance analysis:
- Interest income has the most influence on loan amount than deposit amount.
From the view point of comparative analysis:
- Though BRAC Bank has a positive trend but Prime bank is doing better because its cost of fund is lower and interest rate is lower.
- Credit risk is now stabilizing in BRAC bank but still needs to be more considerations.
From the view point of customer satisfaction:
- Most customers are satisfied with BBL’s product.
- Wide range of customer groups in terms of age and occupation.
Some Other Findings:
- The Bank had also extended long term loan to a number of projects under syndicated financing arrangement with banks and financial institutions.
- BRAC Bank Limited had a pioneer role in providing necessary finance to the fixed income group for buying items that are necessary for raising the quality of living through its Consumer Credit Scheme.
- The Bank provide incentive bonus to its employees on the basis of profit earned during the year. This year the Bank provides five time’s basic salary as the incentive bonus to its employees and two festival bonuses which motivate its employees to perform their activities effectively and efficiently.
- The employees of the Bank are Young, energetic, cooperative and friendly. Their dealings with the client are cooperative and friendly which creates attractive perception about the client and interest to do business with the Bank.
- Because of the strong marketing effort of BBL the deposits amount has increased. For this even when competition has increased due to the intrusion of some new local banks, BBL has become successful to keep its strong position in credit division.
- BBL also gives preferences to its local customer through its marketing efforts. The number of branches of PBL is comparatively higher than other illustrative banks. As a result it covers a higher market segment and sector of the whole country.
Identification of Some Problems:
- Pressure from Directors and Politicians for Credit
- Lack of Deposit for Credit Extensions:
- Loan default culture in Bangladesh.
- Defective Legal System.
- Higher cost of fund.
- Lack of Supervision and Monitoring:
- Changes in Policies
- Lower Remuneration Structure
- Insufficient employees for this reason the bank do not provide sufficient service to its potential customer. Mainly in pick period the presser of customer is very high.
- In Tongi Branch I have found car parking problem and people do not fell comfort to cross the big road and does banking function.
- As the lack of employee, they do not give time to the potential client for his (client) own interest, sometime some employees misbehaved to the client.
- Introduce problem is a great problem most of the employee does not help the new client as an introducer.
- Careless of the bank if the client’s good became damage most of employees do not agree to provide compensation.
- Most of the employee does not accept tom taka from the potential client.
- Limitation of proper training for this reason most of one department employee do not know the other department’s work properly.
Observation and Recommendations
BBL is a well established Bank in Bangladesh. It is providing maximum services to the customer then other Bank. But it has some limitation that is mentioned above. I want to give some suggestion to remove these problems or reduce these problems BBL should increase manpower. Not only Tongi branch but also other branches need more employees to provide maximum service. At least general banking department and cash department the Bank should provide sufficient employee.
The concluding remarks on the above mentioned topic, its discussions, analysis and evaluation are as follows with recommendation:
- Setting proper planning for each and every work as well as for the whole department.
- Managerial supervision is also wanted to increase.
- Reduce the service charge for account and other service charge. Because most of the customer complaint about over charging ex: Statement issue charge.
- Proper maintenance of files and necessary files and documents on daily basis.
- Separating Card department and concern operation because in most of the department
- BSSO doing all types of customer related works.
- Ensure that every one working in Software knows it properly and giving them personal ID.
- Changes in banking policies will not be sufficient the purposes unless it is followed by a change in the attitude and outlook of both the customers and the bankers.
- BRAC Bank Limited should be enforced to expand its activities and loan programs in the rural areas to serve the national interest.
- Diversification of the loan portfolio is, of course, the key to lowering overall credit risk. Default risk can be lowered through diversification of credit programs at each and every comer of the economy as best as possible. So the BBL should diversify the loan portfolio to reduce risk.
- BBL should introduce prime mte for the best customers which will attract the good customers. It is observed that irregular borrowers are given facilities like loan rescheduling, time extension etc. But a regular customer does not get any facility.
- For motivating the employees to perform their activities efficiently and effectively BBL should restructure the remuneration structure of the employees.
- Since the lending rate of BBL is comparatively high, it can attract more customers by lowering the rate of lending
- If the bank wants to provide services to the customer easily and comfortably it should increase the number of branch and should it place in a suitable situation when the client come and parks their cars easily.
- Introducer is an important factor for open an account most of people do not have introduce but they wants to deposit money to the bank so for increasing deposit the employee should do their function.
- To reduce the bad character of employee the bank should provide physical training. Another reason of misbehavior is lack of employee. The present employee became fad up and they misbehave to the client.
We moved a long way from the time when the banks were deposit taking and money-lending institution. The old concepts, attitudes and methods in banking have undergone a marked change all over the world. Modem Banking is an outcome development driven by changing financial activities and lifestyle. Bangladesh has not lagged behind. Banks are required to participate in the nation building activities and act as agent for bringing about socioeconomic changes.
Entering as a new bank in private banking scenario of Bangladesh, BRAC Bank is constantly try to cross the obstacles regarding typical business oriented ideas and come up with innovative curtailed to its Consumers need to harvest maximum benefit for them. BRAC Bank Limited is a third generation bank inaugurated on 4 July 2001 with a mission of providing best banking service in the country to enhance economic activity.
In the world of global economy, banking needs have become more diverse and exotic than ever before. In this regard BRAC Bank promises to fulfill every possible Customer needs with high quality service and satisfaction. This success has resulted from the dedication, commitment & dynamic leadership of its management over the periods. To become market leader in providing banking services, introduction of sophisticated banking instruments i.e., on line banking services, A TM services is a demand of time.
BRAC Bank is maintaining its competitiveness by leveraging on its on line Banking Software and modem IT infrastructure. It is the pioneer amongst the local banks in introducing innovative products like SMS Banking, Phone Banking, and Internet Banking and so on.
Though having some drawbacks the bank’s overall performance is satisfactory. I wish a prosperous future for the Bank.