The recession global financial markets are going through is a great opportunity for economists and statisticians to study live data and redesign economic theories.

It is also an opportunity for various industries including the financial sector to regain lost ground — slow down, get the shop in order, so when the race picks up again, you start at pole position.

The first thing that disappears in recession is customer pressure. Since business volumes drop, the processes are not stress tested any longer and TATs improve on their own.

Don't be misled by this.

Innovate and improve processes in this period.Identify bottlenecks and defective sub-processes based on historic data and clean them up. An improved process should
require fewer number of headcount and this will allow you to determine how many people are redundant.

The credit teams will have fewer files to underwrite and can be focused to develop credit scoring systems which will be critical in the coming years for banks to manage risk without shutting the lending doors.

Banks need to lend to make money, but it should be done objectively, to the right customers and who are assessed to be right scientifically.

Its also important not to lose the right customers to excessive documentation or incorrect rejection, because they are difficult to find in these times.

There is a strong need to innovate products, especially lower instalment or value for money products to motivate customers to bite. The product team can also be tasked to undertake a fee benchmarking exercise and leverage opportunities to charge more where they are undercharging or apply new global charges that may be missing in the market

Recession is a time to hold on to your customers real tight. Competition will try to lure them away by offering various carrots, so retention becomes a critical function and it is a good time to launch loyalty programmes. It should be an organisation-wide or segment-based rather than product-specific.

Organisations should also further segment their customer bases to identify high value customers and offer better products, services and pricing. These customers typically account for 70-80 per cent of the business and will be the first to be targetted by the competition.

Sourcing new customers becomes really difficult, and the best approach in these times is to cross-sell (X-sell) multiple products to existing customers. You know these customers,
can assess them better and hence offer better terms, have a better reach and they will trust you rather than go with a new bank.

Tele-calling and mailers are not really effective as X-sell techniques anymore, what is needed is to drive valued customers into the branch so that the sales guys can hit them with multiple products in a face-toface interaction, and also to drive the lesser customers out of the branch and migrate them to alternate channels. This should be tasked to the service team.

While all of these may seem like a lot of initiatives to run in a single year, they are easier to execute during this time when the teams are not stretched, by allocating project ownership to your
key resources. All staff should have a ‘key initiatives' KPI, which should have a 25per cent+ weightage.

Sanjiv Anand is Managing Director and Himanshu Bansal, is Senior Engagement Manager, at Cedar Management Consulting

By Sanjiv Anand and Himanshu Bansal,Special to Gulf News

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