Page 54 - Banking Finance December 2023

ARTICLE

fund plans, Govt securities. By selling these additional
products they reduce per customer cost and increase per
customer earning.

Cross selling is a major element of driving business revenue,
to augment this most of the banks in India have separate
verticals for cross selling. It is a foundational sales strategy
which remains to be an unshakeable pillar for growth. The
banking sector is no different. Cross selling has been a major
source of revenue growth for the banking sector since last
two decades. According to Banking Intelligence solutions
(BIS) from Fiserv, a customer with one product at a bank
will stay for about 18 months. The same relationship can
extend for up to four years with two products. And at three
products, the relationship averages 6.8 years! In order for relationships with customers based on trust and loyalty.
banks to be able to continue cross selling effectively, they Pushing products blindly is no longer acceptable. Customers
need to adapt their practices with changing times, while have come to expect just in time information and service
wearing a tech forward lens. when it comes to services like opening an account, buying
financial products or solving queries through chatbots.
Cross Selling by Banks in India
They are empowered and independent, and prefer being in
Liberalization, privatization and globalization jointly have
the driver's seat. They need to be offered the choice to get
transformed the entire Indian banking system. The solutions seamlessly through multiple devices and platforms.
liberalization of the financial sector and banking sector The way to win customer interest is by investing time and
reforms, which took place thirty years back, have exposed resources in understanding their personal preferences
the Indian banks to a new economic environment that is through data, using latest technology to reach out to them
characterized by increased competition and new regulatory in the right way and at the right moment, and acting as
requirements. As a result, there is a revolution in every
financial advisors to them, rather than sellers.
sphere of activities of the banks in India, Innovation, and
intensification in new technologies escorts to increase in the
customer expectations and there is a major shift from Use of AI in Cross Selling
product centric approach to customer centric approach. Large banks are already diving into adopting artificial
intelligence (AI) as a part of their core marketing strategy
People not just demand more from their banks but also to create such personalized experiences for their
receive more. Banks are striving hard for retaining the old consumers. Customers of various International as well as
customers then acquiring the new ones in the era of intense Indian Banks have access to a predictive banking feature
competition. And one of the main customer retention that analyses account information, and provides customized
strategies is to cross sell more and more financial products financial guidance. All major International and Indian banks
to the customers. Most managers' cross-sell to every have introduced the virtual financial assistant that uses
customer, sure that more sales means more profits. And predictive analysis and cognitive messaging to offer financial
cross-selling is profitable in the aggregate. But best of our guidance to the millions of customers. It is well known truth
knowledge the first of its kind, found that firms that that Banks have access to a large amount of information
indiscriminately encourage all their customers to buy more relating to their customers. But this data has not been
are making a costly mistake: A significant subset of cross- properly utilized to their advantage. AI can help address this
buyers are highly unprofitable. by simplifying automation and use of valuable data to enable
proactive and personal customer experiences at low cost
To be able to cross sell effectively, banks need to shift their and superior efficiency.
focus back to the customer, or risk being left behind. The
new way is to rely more on establishing long term Virtual Assistants run by Artificial intelligence may ask the

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