Most foreign banks and a few local ones too, offer their services through a dedicated resource called Relationship Manager (RM), stationed at your nearest branch. “A Relationship Manager is a one-point-contact for all your banking needs; he or she is the face of the bank to the customer. He/she builds a relationship with the customer and ensures the highest banking standards and services,” explains a bank branch manager from one such bank.
Relationship Managers are generally MBAs or equivalent. They gain advisory licenses from the IRDA (Insurance Regulatory & Development Authority) and the AMFI (Association of Mutual Funds in India) and also undergo regular trainings and company sponsored accreditations. There are several customer segments that a bank operates into; the premium segments are generally offered special services.
Most banks encourage customers to use the phone and internet banking facilities for service needs. This helps reduce the overall footfall, reduces maintenance and personnel costs at the branches and provides a 24/7 service to customers. But when money is concerned, customers trust man over machine.
“I understand that relationships are based on trust and although we strive to provide both banking and investment services, we really prefer the latter as we belong to the sales team and achieving targets is our key result area,” reveals one relationship manager, who services the premium segment of an MNC bank.
RMs are not trained, empowered or inclined to service customers. “We have to sometimes avoid clients who do not have the potential or the willingness to invest,” adds another RM. He points out that, “Although I could entertain the clients’ service issues, I am just not equipped for, or appraised on the service queries I handle. My boss says that sales are most important. I ask, ‘Then, why don’t we say that to the customer?’”
A service request received by a relationship manager ends up increasing the time taken and the dependency as he or she forwards that request to the concerned department.
“I understand that service leads to sales. But it could sometimes back-fire. One might end up losing an investment deal if the customer is unhappy with the banking services. They feel that since I am the RM, I should be able to fix everything,” says a relationship manager with an MNC bank that prides itself on its service quality. This often leads to a conflict of interest for relationship managers, as they have to keep servicing the customer, while looking for an opportunity to sneak-in a sale.
Compare this with an NBFC (Non banking Financial Corporation), operating in the same business with similar or competitive products. They employ the direct sales model by having a dedicated sales force. They are designated as Sales associates, Sales agents, Area sales Officers or Sales Managers. They believe in calling a spade a spade.
Here, the customer knows what to expect from the sales agent; this, in turn, helps build trust and confidence, unlike the bank RM who has to live up the service expectations first and then arrive at a probable sale. The NBFC sales agent is viewed as a specialist, and hence his advice and recommendations carry weight with the client.
NBFCs believe in catching the bull by the horn. They employ resources for leads generation. “When I receive a lead, I know the client is willing to meet me to discuss an investment product. I only need to focus on my product features and better my competitors’ offerings. This way I can have a higher number of successful sales calls”, explains a sales associate with a leading NBFC. “This also aids to gaining references of family and friends who then become easy to approach”, he adds.
Another avenue where a relationship manager loses out is the increased documentation requirements. “While the IRDA guidelines regulate all companies equally, the extra paper-work that a bank requires causes inconvenience to a customer,” points out a RM referring to an insurance sale.
Customers are generally mindful that banks and financial institutions try and cross-sell investment and insurance products. Then why conceal the fact that RMs are salesmen, only polished, better equipped and more qualified?
They are an expensive resource and hence presenting them as investment experts or investment consultants would get them closer to their actual identity and help the banks serve their customers better. A clear positioning will indeed be appreciated by all parties concerned.
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