Times are challenging for Nepali banks and financial institutions. The Macroeconomic headwinds are blowing strong as the country’s economy grapples with a deep recession. Mahalaxmi Bikas Bank Limited, a prominent national-level development bank in Nepal, Limited is braving the situation with prudent banking practices, and effective marketing and communication strategies.
Basant Baksi, Head of Liability Sales, Corporate Communication, Branding & CSR at Mahalaxmi Bikas Bank, says the bank has set a number of priority areas in facing the challenges and tapping on the opportunities. In a conversation with the HRM, he lists out the current focuses of the bank in moving ahead. Excerpts:
Q: Despite the economic slowdown, the banking system has excess liquidity and the demand for credit is sluggish. How is Mahalaxmi Bikas Bank facing this situation?
A: We are taking a prudent and balanced approach to credit growth. While it may appear that Nepali banks, in general, have not seen significant growth in credit as of date, it is essential to highlight the rationale behind our strategy and our bank’s performance within this context.
Mahalaxmi Bikas Bank recognizes the importance of maintaining a stable and resilient financial position, especially in times of economic uncertainty and high liquidity. The decision to exercise caution in expanding our credit portfolio is a conscious one, aiming to protect the long-term interests of our bank and its stakeholders. This approach reflects our commitment to responsible banking practices and risk management.
The current market conditions, characterized by high liquidity, have created opportunities and challenges. On one hand, ample liquidity allows us to meet the funding requirements of our customers more effectively, ensuring their financial needs are met. On the other hand, it also presents challenges in terms of rising deposit costs as well as deploying these funds prudently to generate profitable lending opportunities.
We are maintaining rigorous risk assessment and due diligence processes to ensure that we lend to creditworthy borrowers. This approach helps us minimize non-performing assets and associated risks. We are exploring opportunities to diversify our credit portfolio across different sectors and industries to spread risk effectively.
While the current phase may not witness explosive growth in ours as well as the industry’s credit portfolio, our bank’s focus on prudence, risk management, and long-term sustainability is a testament to our commitment to financial stability. We are confident that these strategies will position us strongly for sustainable growth when market conditions become more conducive.
It is crucial to emphasize that our bank’s performance should not be evaluated solely based on credit growth, but rather on the soundness of our financial position, risk management practices, and our ability to serve the financial needs of our customers responsibly. We believe that by adhering to these principles, we are safeguarding the interests of our bank, our customers, and the broader economy in Nepal.
Q: What major challenges are there for a development bank like Mahalaxmi currently?
A: As a national-level development bank in Nepal, we face a unique set of challenges and opportunities in the evolving financial landscape of our country.
The regulatory landscape in Nepal is continuously evolving, with new policies and guidelines being introduced. Adapting to these changes while ensuring compliance is a major challenge. We are committed to maintaining the highest standards of regulatory compliance.
Further, Nepal’s economic situation can be unpredictable due to various factors, including political instability, natural disasters, and external influences. We must be prepared to navigate these uncertainties and mitigate potential risks effectively. Also, ensuring the quality of loans and managing credit risk is paramount. This is especially critical for a development bank like ours as we aim to support businesses and projects that contribute to economic development while minimizing non-performing assets.
Moreover, the high deposit concentration mix on fixed deposits has added to our challenges in managing huge deposit costs. The Current and Savings Account (CASA) ratio is depleting every year in financial institutions in the country which poses a threat to sustainable and stable deposit growth for any bank.
The financial sector in Nepal has become competitive with the entry of new players in the market. Staying ahead in terms of product innovation, customer service, and market share is a constant challenge.
As a development bank, securing capital for lending and investment in priority sectors is crucial. Balancing the need for capital with regulatory requirements and shareholder expectations is a complex task. Additionally, the lack of deposit opportunities from public service undertakings (PSUs) and companies with government investment is a challenge for resource mobilization.
The banking industry worldwide is rapidly embracing digital transformation. We must keep pace with technological advancements to offer innovative and convenient banking services while ensuring data security and customer privacy. Promoting financial inclusion in Nepal, especially in rural and underserved areas, is a priority for us. Expanding our reach while maintaining profitability is a challenge that we continue to address.
Customer expectations are evolving, with a demand for personalized services and convenient banking options. Meeting these expectations while maintaining operational efficiency can be a significant challenge.
As a development bank, we are committed to environmental and social responsibility. Balancing financial returns with sustainable practices and community development can be complex.
Q: What are the major focuses of Mahalaxmi in terms of business operations at present?
A: As the Sales Head of Mahalaxmi Bikas Bank, I am proud to share that our bank’s business operations are strategically focused on several key areas to drive growth, meet customer needs, and contribute to the overall development of Nepal’s economy in line with our mission, vision, and goal. The major focuses of Mahalaxmi Bikas Bank in business operations at present include:
Customer-Centric Approach: Our foremost focus is on providing exceptional customer experiences. We are committed to understanding our customers› financial requirements and tailoring our products and services to meet their needs effectively.
Digital Transformation: Embracing technology and digitalization is a top priority. We are investing in digital banking solutions to enhance convenience and accessibility for our customers while streamlining internal operations for efficiency.
Credit Portfolio Management: We place a strong emphasis on maintaining a high-quality credit portfolio. This involves prudent lending practices, rigorous risk assessment, and active portfolio monitoring to minimize non-performing assets.
Market Expansion: We are working on expanding our presence in both urban and rural areas to serve a broader customer base. This includes opening new branches and utilizing alternative delivery channels to reach underserved regions.
SME and Agriculture Financing: Supporting small and medium-sized enterprises (SMEs) and agriculture sectors is a key focus. These sectors play a vital role in Nepal›s economic development, and we are dedicated to providing tailored financial solutions to promote their growth.
Financial Inclusion: We are committed to promoting financial inclusion by reaching unbanked and underbanked populations. This involves offering simplified banking products and services that are accessible to all segments of society.
Sustainable Banking: Environmental and social responsibility are integral to our operations. We are actively involved in sustainable banking practices, such as financing environmentally friendly projects and contributing to the community›s well-being.
Human Resource Development: Investing in our employees› growth and development is a priority. We aim to ensure that our workforce is equipped with the necessary skills and knowledge to provide the best possible service to our customers.
Compliance and Risk Management: Adherence to regulatory requirements and robust risk management is non-negotiable. We prioritize maintaining a sound financial position while meeting all statutory obligations.
Innovation and Product Diversification: To stay competitive and meet evolving customer demands, we are continually innovating our product offerings. This includes the introduction of new and innovative banking products and services.
These focal areas represent our commitment to delivering value to our customers, ensuring financial stability, and contributing to the economic growth of Nepal. Our bank is dedicated to being at the forefront of banking excellence, actively responding to market dynamics, and fostering sustainable growth.
Q: How important do you think branding and marketing have become for banks at present?
A: In the contemporary financial landscape, branding and marketing have unprecedented importance for banks. Banking institutions are no longer just about offering traditional financial services; they have evolved into dynamic, customer-centric entities that must differentiate themselves in a highly competitive market.
Branding and marketing have become absolutely vital for banks, including our bank in the current era. In an increasingly crowded marketplace, where multiple financial institutions vie for the attention and trust of customers, effective branding and marketing are not mere luxuries but essential strategic imperatives.
Trust is the bedrock of the banking industry. Strong branding and marketing efforts help establish trust and credibility with customers. It conveys a sense of stability and reliability, which are pivotal factors when people entrust their financial well-being to a bank. Branding and marketing provide a platform for engaging with existing and potential customers. We can communicate our unique value propositions, demonstrate our commitment to customer service, and solicit valuable feedback through these channels. Branding allows us to distinguish ourselves in a crowded marketplace. It gives us the opportunity to showcase our strengths, whether it’s a specialized product offering, a particular focus on customer segments, or a commitment to social and environmental responsibility.
In an age where digital banking is on the rise, branding plays a pivotal role. It involves creating user-friendly, intuitive interfaces, mobile apps, and online platforms that enhance the customer experience. Effective marketing can help in retaining existing customers by keeping them informed about new services, promotions, and incentives, thereby reducing churn rates. Marketing is also instrumental in acquiring new customers. It helps to reach potential clients who may not be aware of our services, illustrating how we can meet their financial needs.
The banking sector is continually evolving, influenced by technological advancements and changing customer preferences. Effective branding and marketing enable us to adapt to these shifts and stay relevant. A strong brand is associated with regulatory compliance and transparency. It conveys our commitment to ethical banking practices, thereby fostering confidence among stakeholders.
Marketing materials can serve as valuable educational resources, helping customers understand complex financial products and make informed decisions. Branding and marketing also extend to our role in the community. They enable us to convey our involvement in social responsibility initiatives, further building trust and goodwill.
In conclusion, branding and marketing are no longer optional for banks; they are integral components of our business strategy. At Mahalaxmi Bikas Bank, we recognize that our brand represents not only our services but also our commitment to customers, the community, and the broader economy. It is an assurance of the quality, reliability, and trustworthiness that customers seek in a financial partner. In these times, branding and marketing are not just about advertising but about crafting an authentic and compelling narrative that resonates with our customers and sets us apart in a rapidly evolving financial landscape.
Q: The rise of social media and digital news mediums has eclipsed traditional mediums in recent years. How do you observe the prospects of branding and marketing for banks and financial institutions in this context?
A: In the age of digitization and social media, the prospects of branding and marketing for banks and financial institutions have undergone a profound transformation. This shift presents both significant opportunities and challenges. Digital platforms have become the primary arenas for customer engagement and brand exposure. They offer unparalleled reach and precision in targeting specific customer segments, allowing banks to create highly personalized campaigns and content that resonate with their audience.
However, with this increased visibility comes a heightened need for transparency, authenticity, and consistency in branding. Customers today are more discerning and well-informed, and they expect banks to not only provide excellent services but also embody values and principles they can trust. Therefore, financial institutions must be diligent in their branding efforts, ensuring their digital presence aligns with their real-world commitments.
Moreover, the rapid dissemination of information through digital mediums requires banks to be agile in responding to market trends, customer feedback, and emerging issues. This dynamic landscape necessitates continuous monitoring and adaptation of branding and marketing strategies.
In summary, the rise of social media and digital news has reshaped the branding and marketing landscape for banks, offering unprecedented opportunities to connect with customers. However, this shift also underscores the importance of maintaining brand integrity, authenticity, and adaptability in a world where customer expectations are higher than ever. By leveraging these digital tools effectively and keeping social media engagement as the top priority, Mahalaxmi Bikas Bank can solidify its presence, engage with its customers, and convey its commitment to being a trusted and innovative financial partner.
Q: How is Mahalaxmi Bikas Bank utilizing branding and marketing opportunities in this regard?
A: Mahalaxmi Bikas Bank is keenly attuned to the transformative power of digital and social media in shaping the branding and marketing landscape for banks. We have embraced these opportunities by crafting a dynamic and customer-centric strategy. Our approach is rooted in transparency, authenticity, and engagement.
First and foremost, we have established a strong digital presence through various social media channels and our website. This allows us to engage with our customers on a personal level, sharing not only information about our financial services but also our core values, community involvement, and responsible banking practices.
To enhance customer engagement, we create tailored content that addresses the evolving needs of our diverse customer base. This includes posts, trends, literacy, articles, financial tips, and updates on our services. We actively encourage two-way communication, valuing customer feedback as an invaluable source of insight for refining our offerings.
Furthermore, Mahalaxmi Bikas Bank leverages social media and digital platforms to stay agile in responding to market trends and emerging issues. This adaptability ensures that our branding and marketing efforts remain aligned with the ever-changing landscape of customer expectations.
Mahalaxmi Bikas Bank recognizes the significance of social media and digital mediums as potent tools for branding and marketing. We utilize these opportunities to connect with customers on a personal level, uphold our commitment to transparency and responsibility, and ensure that our bank remains not just a financial institution but a trusted, innovative, and customer-centric partner in Nepal’s dynamic banking industry.
Q: How is the bank managing its communication strategy to reach out to customers in these difficult times?
A: We›ve implemented several innovative changes in our communication strategy to connect with our customers. In the face of the global challenges that have affected our community and the way we do business, we have recognized the need to adapt and evolve our approach. Our communication strategy is now more customer-centric than ever, focusing on empathy, reliability, and accessibility.
We have intensified our digital marketing efforts, recognizing that the digital space is where our customers are spending an increasing amount of their time. Through our digital channels, we are providing informative and educational content that addresses the unique financial concerns and needs arising during these difficult days. This content encompasses financial planning advice, online banking guides, and updates on how we are supporting our customers and the community during times of crisis.
Furthermore, our social media platforms have become essential tools for engaging with our customers on a personal level. We actively respond to customer queries and concerns, providing timely and transparent information to alleviate uncertainties.
In addition, we have expanded our online services to ensure that our customers can access our banking products and services from the safety and comfort of their homes. This includes enhancing our mobile banking app, enabling online account opening, and facilitating digital transactions.
Mahalaxmi Bikas Bank has also demonstrated a strong commitment to corporate social responsibility by engaging in various community initiatives, such as supporting healthcare services, education, and relief efforts. We communicate these initiatives through our branding and marketing, reinforcing our dedication to the well-being of the community we serve.
Our bank’s communication strategy has evolved to place customers at the forefront. We are using digital channels to provide support, information, and access to our services during these challenging times. Our commitment to transparency, empathy, and community well-being remains unwavering, and we continue to adapt our strategies to meet the evolving needs of our customers and the community.
Q: As banks compete with each other to attract deposits by launching multiple savings and fixed deposit accounts with attractive features, how do you think effective communication has become more crucial than ever?
A: In today’s highly competitive banking landscape, effective communication has undoubtedly become more crucial than ever, particularly in the context of launching savings and fixed deposit accounts with attractive features. As Head of Liability Sales and Branding at Mahalaxmi Bikas Bank, I understand the significance of clear, compelling, and customer-centric communication in this environment.
The proliferation of financial products with varying features and benefits has created a situation where customers are presented with numerous choices. To stand out in this crowded marketplace, effective communication is the linchpin. Here’s why it’s more critical than ever:
Customers need to fully comprehend the terms, benefits, and risks associated with different deposit accounts. Clear and transparent communication is essential to help customers make informed decisions.
Effective communication fosters trust. When customers feel well-informed and understand what they’re getting into, they are more likely to trust the bank. Trust is a cornerstone of banking relationships, especially for savings and deposits.
In a sea of similar-sounding offers, effective communication helps a bank differentiate itself. It allows us to highlight our unique value propositions, whether it’s competitive interest rates, flexible terms, or personalized customer service.
It’s not just about attracting deposits; it’s also about retaining them. Effective communication strategies keep customers engaged, informed about account updates, and aware of new opportunities.
In an increasingly regulated environment, effective communication is essential to ensure that customers are aware of their rights and responsibilities.
With the rise of online and mobile banking, digital communication has become paramount in terms of the digital transformation of financial institutions. Banks must adapt to changing customer preferences by offering secure, convenient, and user-friendly digital communication channels.
At Mahalaxmi Bikas Bank, we recognize the paramount importance of effective communication. Our commitment to customer-centric, transparent, and informative communication is at the core of our branding and marketing strategy. We strive to not only attract deposits but also to empower our customers with knowledge and confidence in their financial decisions. In this competitive landscape, effective communication is not just a means to convey information; it is the cornerstone of trust, engagement, and lasting banking relationships.
Q: How is the growth of social media and other digital mediums changing marketing and promotion in the Nepali banking sector?
A: The massive growth of social media and digital mediums has brought a seismic shift to marketing and promotion in the Nepali banking sector, ushering in both challenges and transformative opportunities. This evolution is emblematic of the broader global trend in the financial industry.
First and foremost, digital platforms have exponentially expanded the reach and immediacy of marketing efforts. Social media, mobile apps, email campaigns, and online advertising have become powerful tools to engage with customers. Banking institutions, including Mahalaxmi Bikas Bank, can now communicate directly with customers in real-time, offering personalized content and services. This has forged a more intimate and dynamic connection with customers, enhancing their overall experience.
Furthermore, the advent of digital marketing analytics provides banks with valuable insights into customer behavior and preferences. This data-driven approach allows for targeted and efficient marketing, ensuring that resources are allocated where they are most effective. It enables banks to measure the success of marketing campaigns more accurately and make data-driven adjustments in real-time.
On the flip side, the digital realm has also introduced challenges. Banks must now be vigilant in safeguarding customer data and privacy. Security and compliance concerns have become paramount, necessitating investments in robust cybersecurity and adherence to stringent regulatory requirements.
In summary, the proliferation of social media and digital mediums has revolutionized marketing and promotion in the Nepali banking sector. It has rendered marketing more personalized, data-driven, and immediate, but it has also increased the responsibility to protect customer data and uphold stringent security standards. For institutions like Mahalaxmi Bikas Bank, this shift presents a remarkable opportunity to engage customers in innovative ways, communicate core values, and demonstrate a commitment to modern banking practices while remaining ever-vigilant in ensuring customer privacy and security.
