27250133 Summer Project Part 2

8/6/2019 27250133 Summer Project Part 2

1/38

4. CASE STUDIES

4.1. HSBC NRI Services Research & Promotion

4.1.1. OBJECTIVES:

Research on HSBC NRI service offerings

Suggestion of Promotional activities

Suggestion of new services (core + soft) with regard to NRI banking

4.1.2 RESEARCH DESIGN:

The research is exploratory in nature as the NRI services are being identified and ranked in the order of

their importance. The problems faced by NRIs are also being explored.

4.1.3 RESEARCH METHODOLOGY:

Primary Research This includes interviewing the NRIs through phone, and mailing questionnaires to

the NRIs through internet.

Secondary Research This includes collection of data from books, internet, research papers etc.

4.1.4 About HSBC

Headquartered in London, HSBC is one of the largest banking and financial services organizations in the

world. HSBC's international network comprises around 9,500 offices in 86 countries and territories in

Europe, the Asia-Pacific region, the Americas, the Middle East and Africa.

Through an international network linked by advanced technology, including a rapidly growing e-

commerce capability, HSBC provides a comprehensive range of financial services: personal financial

services; commercial banking; corporate, investment banking and markets; private banking; and other

activities.

1


2/38

HSBC's origins in India date back to 1853, when the Mercantile Bank of India was established in

Mumbai. The Bank has since, steadily grown in reach and service offerings, keeping pace with the

evolving banking and financial needs of its customers.

In India, the Bank offers a comprehensive suite of world-class products and services to its corporate and

commercial banking clients as also to a fast growing personal banking customer base.

NRI

An NRI is a person resident outside India who is a citizen of India or is a person of Indian origin.

Under the Foreign Exchange Management Act (FEMA), generally, a person is resident outside India if

he is in India for less than 182 days during the course of the preceding financial year and also includesany person who stays abroad

for employment, or

for carrying on any business or vocation, or

for any other purpose indicating an intention of stay outside India for an uncertain period

for education provided the student has stayed overseas for more than 182 days in the preceding

financial year.

Under the Income tax Act, an individual is resident in India in a year if he:

is in India for at least 182 days or;

is in India for 365 days or more in the 4 years preceding that year and is in India for 60 days or

more in that year.

In other cases, the individual will be a non-resident under the Income-tax Act

2


3/38

List of NRIs in major countries

The list of NRIs in major countries across the world is given below:

COUNTRIES NUMBERS

Middle EastSaudi Arabia 1,400,000

United Arab Emirates 1,200,000Kuwait 500,000Oman 350,000Qatar 175,000Bahrain 140,000Yemen 100,000Jordan 4,100

South East Asia

Malaysia 2,300,000Singapore 400,000

South America and the Caribbean

Guyana 326,782Suriname 162113

Trinidad 473735

As well as nominal communities in Barbados,Belize, Jamaica, Grenada, St. Lucia,

St. Vincent, Martinique and Guadeloupe.

Africa

South Africa 1,200,000Mauritius 800,000Kenya 70,000Uganda 60,000

Tanzania 50,000Madagascar 30,000Mozambique 21,000Zambia 20,000Zimbabwe 20,000

Europe

3


4/38

United Kingdom 1,500,000 Netherlands France 70,000

North America

United States 2,500,00Canada 713,330 (2001)

Oceania

Fiji 350,000Australia 150,000 New Zealand

Source: http://www.nriol.com

The countries whose numbers have been highlighted in yellow are the countries where the population of

NRIs is extremely high.

NRI Banking

NRI banking is a niche segment with almost every major bank providing plethora of services to NRIs. In

recent years NRIs have come to be seen as an important niche segment for wealth managers to target

and as a key potential growth area in the future.

This brief assesses the strategies that companies are using to target NRIs.

This report assesses the scope and nature of the NRI market and reviews the competitive

strategies of key competitors. Findings are based on secondary and primary research.

4


5/38

It is the major banks like HSBC, HDFC, SBI, Bank of Baroda, Citibanketc. that provide plethora of

services to woo the NRIs. NRI services have gained a lot of momentum in the recent past.

The areas marked in red are the ones that are of maximum priority. USA, UK and the Middle-East fal

into this category. The obvious reason being that majority of NRIs are concentrated in these regions.

The areas marked in dark blue are the areas where there is a fair amount of NRI population but not as

much as the areas that are marked in red. These areas would include Asia-Pacific, Europe (excluding

UK), and Africa.

The areas marked in grey are of the least priority. This is because of the fact that there are very few

NRIs in that particular area. E.g.: South America.

5


6/38

Process

6


7/38

The process begins with a NRI identifying a need for bank account to comfortably remit money to India,

invest in Indian markets, depositing foreign currency in Indian rupees etc. The need might evolve

differently for different people. For NRI students the need might involve when they start earning,

whereas for a NRI professional the need might arise the moment he steps into a foreign country. For an

NRI already settled in one country, the need might arise once he has earned a sizeable income.

The next step is evaluating the alternatives. The alternatives in this case might be ICICI, Citibank, SBI,

Bank of Baroda etc. The NRI will weigh the pros and cons of each bank and select a bank which he feels

will most suit him. It has to be noted that in this case word-of-mouth is very important mode of

communication in this case.

The NRI will consider all the required parameters like comfort, portfolio of services, customer

friendliness etc. before selecting a bank/s. The 2 most important parameters that a NRI will consider will

be economy and customer service. It has been observed that customer service is one area where they are

not ready to compromise.

7


8/38

The NRI will then communicate with the Relationship Manager (RM) and see whether the bank actually

lives up to its expectations. His direct communication with the Relationship Manager (RM) will give

him hands on experience about the bank and will create a positive or negative perception about the bank.

Once the conversation between the NRI and RM is complete the NRI will make his decision and finish

all the formalities.

Providing thorough service, consistency and continuous innovation will enable the bank to retain its

customers. The customers (NRIs) will be loyal to the bank once it proves its mettle. This can be

achieved through CRM.

Word-of-mouth advertising is the most powerful form of advertising as far as banks are concerned. Once

the existing NRI is satisfied, he will automatically rope in a plethora of NRIs and this is a continuous

process. E.g.: SBI bank has most customers whose fathers/mothers have accounts in SBI. This shows

that the best way to attract more customers is by retaining the old ones. This is last step wherein, the new

customers are attracted and retained. This step is never-ending.

8


9/38

4.1.5. Competitors Analysis

A Competitors Analysis was done in order to find out the services that are being provided by major

banks vis--vis HSBC.

The major competitors in this field are:

CITIBANK

HDFC

ICICI

SBI

a. SERVICES PROVIDED BY HSBC

The NRI services provided by HSBC are as follows:

Rupee Accounts/Deposits

HSBC provides a magnanimous range of rupee accounts and deposits. The different rupee

accounts that are:

1. NRE (Non Resident External Savings account and Term Deposits)

2. NRO (Non Resident Ordinary Rupee Savings, Current and Term Deposit Accounts)

3. RFC (Resident Foreign Currency Deposits)

4. FCNR (Foreign currency Non-Resident Deposits)

9


10/38

The tenure of various deposits is as follows:

NRE Term Deposits 1 yr - 3 yrs

NRO Term Deposits 15 days - 5 yrs

RFC Term Deposits 30 days - 6 months

FCNR Term Deposits1 yr -3 yrs (USD & GBP)

1 yr - 2 yrs (EURO, JPY, CAD, AUD)

HSBC provides an interest rate of 3.89% compounded.

HSBC offers a plethora of remittance services to suit the needs of NRIs of different income

group. The different services provided are:

1. Dial or Click transfers

Sending money to India from, for Free in 3 working days

2. FastCHEQUE transfers

Incredibly easy remittance facility, enabling remittance to India for free in 3-5 working

days

3. Wire Transfers

Usually for high value remittances which is both quick and safe. Remittance is possible

in eight major currencies.

4. Foreign Currency Cheques/Drafts

Sending money in simple and traditional form of remittance and crediting takes place in

around 14-21 days.

5. Indian Rupee Drafts

Flexibility to buy an Indian Rupee Draft at any HSBC bank and mail the same to

beneficiaries back in India.

Country Guidance

10


11/38

This is one service which has been received very well by the NRIs. HSBC provides country

specific information for students/other NRIs moving to those countries. They provide

information such as key cities, etiquettes, communication etc.

b. CITIBANK:

Citibank is one of the major pre-eminent financial services company, with some 200 million customer

accounts in more than 100 countries. The inception of Citibank was in 1812, Bank Handlowy in 1870

Smith Barney in 1873, Banamex in 1884, and Salomon Brothers in 1910.

Citibank is one of the stronger players in the NRI segment. Citibank with their rationality approach have

been extremely successful in attracting potential customers. Citibank has gone ahead of the competition

by continuously innovating services. The main services that are provided by Citibank are:

NRI Accounts/Deposits:

Citibank provides numerous NRI accounts and deposits to suit the needs of various categories of

NRIs. This includes

1. Rupee Checking account

2. Indian Deposits

3. Internet Banking

Home Loans:

Citibank provides home loan solutions that guide a person through the process of taking a NRI

home loan from application, to disbursement of the entire amount

as soon as the application for a home loan with Citibank is put forth, a Relationship Manager is

assigned, who steers the customer through the entire process.

Overdraft

11


12/38

The US Dollar Overdraft is a secured overdraft facility against your NRI investments and

deposits and helps meet your short term liquidity needs.

Foreign Currency Loans

Foreseeing a loan requirement for a NRIs personal investment or business needs, Citibank

provides the flexibility to avail the convenience of foreign currency loans against the NRIs

Globe Deposits.

Swapping of currencies with loans reduces the interest cost by taking advantage of exchange rate

opportunities

Transfers

1. Automated Clearing House (ACH):

ACH is a unique, paperless and online transfer facility in the U.S. It saves a person from

the hassle of going to a bank or posting a check for affecting a transfer. Using the ACH

facility, one can transfer funds online into the Rupee Checking Account from his/her

local U.S. account, provided your bank in the U.S participates in the ACH network.2. Citibank Global Transfers Facility:

It allows NRIs to transfer funds from the local Citibank Account to Citibank Rupee

Checking Account instantaneously.

3. National Electronic Funds Transfer (NEFT) / RTGS

It is one of the fastest ways to transfer funds to India. It gives the ability to transfer funds

online from Rupee Checking Account to any local account in India to over 41,000

branches. No charges from Citibank for this facility.

4. Dial-to-transfer

This refers to the phone transfer. Money can be remitted to India by placing a call.

5. Loans and Investments

Citibank provides a variety of services with regard to global investments such as

Treasury Services, Structured Products, Mutual Funds and Fixed Income securities.

12


13/38

c. HDFC

The Housing Development Finance Corporation Limited (HDFC) was incorporated in August 1994 in

the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced

operations as a Scheduled Commercial Bank in January 1995.

HDFC provides the following NRI services:

Rupee account/Deposits

The various accounts/deposits provided by the bank are NRE Accounts, NRO Accounts and

Special Resident Indian Savings Account.

1. Special Resident Indian Savings Account:

This account is available for Resident family members of existing as well as new NRI

customers. The account also offers the leverage to the customers to group their savings

account with the account of the respective NRIs.

The various deposit schemes available with HDFC are NRE deposits, NRO deposits, Super

Saver Account, Sweep-in Account, FCNR and RFC deposits and accounts.

1. Super Saver Account:

This account combines a Fixed Deposit and Savings/Current account. The bank also

offers an overdraft of 75% if the deposit, or 1 Crore, whichever is lower without breaking

the Fixed Deposit or losing interest.

2. Sweep-In Account:

This allows the NRI to link the Fixed Deposit to NRI savings or current account. It helps

to cover the deficit in Savings or Current Account by your Fixed Deposit, without

disturbing the interest on the reminder.

Remittances

The various remittance services provided by HDFC are:

13


14/38

1. QuickRemit:

QuickRremit allows the transfer of funds from the foreign country to family members

back in India through internet at relatively negligible time.

2. Cheque Lockl-Box:

Money can be remitted by mailing a Cheque to local mailbox.

3. Telegraphic/Wire Transfer:

The most commonly used form of transfer

4. Fund Transfers through Cheques/DDs/TCs:

It is the traditional way of transferring funds through cheques and demand drafts.

d. ICICI

ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial institution, and was

its wholly-owned subsidiary.

ICICI Bank is India's second-largest bank with total assets of Rs. 3,793.01 billion (US$ 75 billion) at

March 31, 2009 and profit after tax Rs. 37.58 billion for the year ended March 31, 2009. The Bank has a

network of 1,451 branches and about 4,721 ATMs in India and presence in 18 countries. ICICI Bank

offers a wide range of banking products and financial services to corporate and retail customers through

a variety of delivery channels and through its specialized subsidiaries and affiliates in the areas of

investment banking, life and non-life insurance, venture capital and asset management. The Bank

currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States,

Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and

representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia

and Indonesia. Our UK subsidiary has established branches in Belgium and Germany.

ICICI bank offers a comprehensive list of services. The service offered encompasses almost all the

categories of NRIs including students. ICICI has gained a lot of prominence in the NRI segment by

targeting students. The main servicesprovided are:

Rupee Accounts/Deposits:

14


15/38

A variety of Rupee account and deposits are offered by ICICI which include NRI Edge, NRE

NRO, RFC, NRI SmartSave Account, Student Account, Global Indian Account and Seafarers

Account.

1. NRI Edge:

NRI Edge is ICICI Bank's new premium banking product for NRIs from across the

world. It is equipped with premium Platinum Debit card, a dedicated 24x7 phone banking

team and exclusive investment options. For NRIs looking priority service and exclusive

privileges, NRI Edge is an ideal choice.

Investments

ICICI Bank offers abundant investment opportunities for NRI investors which is often flexible

and lucrative.

1. Offshore Banking Deposits:

This offers investment in various currencies. The tenure period is between 3- 6 years

which exemplifies the fact that an NRI can park his money in the currency and duration

of his choice.

2. Singapore Deposits

3. Bahrain Deposits4. Structured Deposits

5. Private Equity

6. Commercial Real Estate

Money Transfer:

Like most banks ICICI provides a complete remittance facility. The main services offered are

1. Online Transfers:

This includes E-transfer (ACH), Money2india, Netbanking transfer, Chequelock box and

Web-based wire transfer.

2. Wire Transfers

3. Foreign Currency Cheques

Property Solutions:

15


16/38

ICICI Bank offers a wide variety of home loan products tailored to the unique needs of NRIs

Insurance:

ICICI provides Life Insurance and General Insurance to NRIs.

Loan Against Deposits

ICICI provides liquidity in NRIs investments by offering a loan facility against his/their

deposits. Rupee loans are provided against the security of NRIs Rupee Deposits or FCNR

deposits.

e. SBI

The State Bank of India, the countrys oldest Bank and a premier in terms of balance sheet size, number

of branches, market capitalization and profits is today going through a momentous phase of Change and

Transformation the two hundred year old Public sector behemoth is today stirring out of its Public

Sector legacy and moving with an agility to give the Private and Foreign Banks a run for their money.

The main NRI services offered by SBI are:

NRI accounts:

SBI offers a huge range of NRI accounts. It offers fixed deposits in various currencies such as

the USD, CAD, AUD, GBP etc.

Deposits:

The flexibility provided for deposits in staggering. The tenure ranges from a mere 6 months to 5

years.

Car-Loan Schemes:

State Bank of India presents a special product in car loans to cater to overseas Indians. This is

one of the most unique and effective service offering in the NRI segment.

To meet their specific needs, SBI has launched a new car loan scheme titled as NRI-Car Loan.Under the stated scheme the Borrower will be a Resident Indian who is a close relative of

sponsoring NRI/PIO who would be the Guarantor.

Under the NRI Car Loan Scheme the NRI/PIO will be the Guarantor and the NRIs /PIO's

nominee will be the principal applicant. The car loan will be granted at the request of Guarantor

(NRI/PIO)

16


17/38

Purpose:

Loan is for the purpose of Purchase of new passenger cars, Multi Utility Vehicles (MUVs) and

SUVs.

Eligibility:

For Borrower & Guarantor

Age: 21- 65 years (for both). Loan to be repaid before the guarantor turns 65 yrs of age.

A Comparative Analysis has been prepared to find out the respective strengths and weaknesses of each

of the major banks providing NRI services.

HSBC CITIBANK HDFC ICICI SBI STANDARD

CHARTED

Remitting money

to India

Remitting money

to India

Remitting

money to India

Remitting

money to India

Remitting money

to India

Remitting money

to India

Rupee accounts Rupee accounts Rupee accounts Rupee accounts Rupee accounts Rupee accounts

NRI deposits (1-

3 years)

NRI deposits NRI deposits NRI deposits NRI deposits NRI deposits

Loans Loans Loans Loans, Property

Solutions

Loans(*car-loans,

home loans)

Loans

Country

Guidance

Special Services

(Not specified)

Investments

(PIS, Private

Banking)

Investments and

Insurance

Investments Investments

4.1.6. Primary Research

17


18/38

A primary research was conducted to find out the banks preferred by NRIs, the services availed by

them, the gaps in services and new services that the customers would like the bank/s to incorporate.

The sample size was unbiased covering NRIs residing in various parts of the world.

The questionnaire was sent across to NRIs in various countries including USA, Spain, Saudi Arabia etc

through email and on certain occasions questions were asked through phone. The responses were

collected and inferences were drawn. These inferences were then analyzed and the following

conclusions were drawn.

18

Preferred banks for NRI accounts

2

1

2

5

1

3

Citibank

HDFC

HSBC

ICICI

SBI

StandardCharted

Others


19/38

WT

4 2

Various

DepositSchemes(NRE,NRO..)

Investme

nt andInsuranceSchemes

L

4 5 1

Number of NRI accounts

It is evident from the pie chart that the most preferred bank for NRIs is SBI. It is ironic seeing a Public

sector bank overtaking the likes ofHSBC, HDFC etc. The major thing noted here is that the services

provided to NRIs changes from country to country. A NRI is USA/UK receives lot more services than a

19


20/38

NRI who resides in any other country like Argentina, Nigeria and to an extent Gulf. This might be due

to the fact that the percentage of NRIs in USA/UK is huge compared to other countries.

Nationalized banks are more preferred as compared to Private players like Citibank and ICICI as per

the survey. Persons from the Gulf prefer SBI and Bank of Baroda whereas most people in USA prefer

Citibank and ICICI. Citibank is the most preferred bank in USA for NRIs. In Europe, people prefer SBI

and other Indian banks.

Economy plays a major role in selection of a bank. A customer doesnt want to be charged

miscellaneous amounts for some service he never availed. Also excessive remittance charges is a huge

let down for NRIs. This is one more reason due to which nationalized banks are preferred over their

Private counterparts.

It has been found that people in Gulf tend to have more than one NRI accounts and have accounts with

multiple banks. This trend is also present in the US but to a lesser extent.

The service that is most sought by NRIs is the Ease and Comfort of remitting money to India. Also

NRIs are very particular about the types of NRI accounts and Deposits that the banks offer them.

Investment opportunities also play a vital when it comes to the selection of bank by NRIs. In fact,

most customers open NRI bank accounts for the purpose ofRemittance and Investment opportunities

only. The survey has shown that customers want to invest in the Indian stock markets and presently

only one bank (HDFC) provides that faclity.

NRIs in the survey want betterBenefits and Policies with regard to interest rates and insurance policies.

Safety is also a major factor which NRI customers look closely before choosing a bank.

The NRIs do not want their funds to be misused or stolen. They are very particular about the safety and

do a prodigious amount of research before selecting a bank with good safety. This might be one of the

reasons that SBI is more preferred than other banks as it ensures safety.

20


21/38

The most important thing that NRIs found lacking was good Customer Service. Many a time it has so

happened that a reputed bank has held up NRIs life savings due to some software error or other such

excuses. NRIs are very frustrated with these activities. The filing of a lawsuit and claiming damages is

a long and complicated process.Almost all the NRIs whose survey was taken agreed to the fact that these

banks need to improve their customer service.

The bank which is finally ready to improve the customer service is the bank that will gain the maximum

NRI customers.

21


22/38

4.1.7. Promotional Tools Used by Various Banks

Banks normally use 2 methods of promoting their services. One is the Rational approach and other is

the Emotional approach. Banks such as SBI use their emotional touch to appeal to the customers

whereas banks such as HSBC use the rational quotient to attract the customers.

The most common tools used by most banks are:

Personal Selling

Direct Marketing

Brand Building

Sales Promotion/advertising

HSBC

The promotion of HSBC bank is a unique mix of Rational and Emotional appeal. Rationality

occupies the major space, but small quantities of emotions are added to the mix. The following

two schemes exemplify the same.

Country specific services

HSBC provides a unique, one of a kind country specific service. It provides information about

the countrys culture, holidays, etiquettes, hot spots etc. to the NRI/s who is traveling to that

particular country.

This service can presently be availed only for a few countries.

Blockbuster Weekends

This is the part wherein a small amount of emotional appeal comes into the picture. HSBC offers

special blockbuster weekends (screening of bollywood movies in particular channels) to NRIs

who have accounts with them. The factor of nostalgia has been exploited to the maximum

possible extent.

22


23/38

CITIBANK

Citibank also uses a combination of rational and emotional appeal with more focus on emotional appeal.

Personal touch

Citibank gives a personal touch to the NRI the moment he subscribes for a service. A

Relationship Manager is appointed to a NRI as soon as he subscribes for any service. This person

takes care of all the NRIs requirements. This gives the NRI the familiarity of dealing with one

person as well as helps in breaking the barrier.

Tie-up with Indiaplaza.in

NRI love to gift their dear ones back in India. Citibank just made that easier by tying up with

Indiaplaza.in. This website consists of a comprehensive list of gifts that one can send to

friends/family back in India. Citibank users get to avail special discounts and offers which

purchasing these gifts. The range of gifts is from Cakes to Electronics.

Complimentary Bollywood DVDs

This is mainly used as a promotional tool. Indians outside are very nostalgic. Taking advantage

of this fact, many banks go bollywood happy! In this case, Citibank provides free complimentary

DVDs (Hindi Movies) when a NRI opens an account with them. This is one of the soft services

that really help in attracting the customers who are unsure of selecting the bank.

HDFC

HDFC uses a rational approach to attract their customers.

23


24/38

Variety of Investment opportunities

The range of Investment opportunities provided by HDFC for NRIs is astounding. Their services

are holistic and cover the needs of common investors and HNIs. One of the major USPs of the

bank is that they provide Portfolio Investment Scheme (PIS) which allows a NRI to invest in

the Indian stock markets.

They also provide numerous Mutual Funds investment schemes.

Also, HDFC provides tailor made Wealth Management schemes and Private Banking for

HNIs.

Exclusive Gold credit card for NRIs

Credit Cards have become a part of life. An exclusive credit card in foreign countries allows the

NRIs to have that flexibility in spending. This goes a long way in attracting customers.

ICICI

ICICI bank appeals to the customer in an emotional manner with a hint of rational approach added to the

mix. This unique approach is both intriguing and attractive. Their main promotional schemes are:

Special accounts

ICICI is renowned for providing tailor made accounts to various segments of the society. They

provide special accounts for Student NRIs, Seafarer and Global Indian account

Customization is required in banking and ICICI is the one bank that provides it.

Property consultants

Purchasing a home is a tedious and lengthy affair intertwined with many complications and

frauds. This becomes all the more difficult for an NRI to purchase a house at the right place and

right amount. ICICI bank has appointed property consultants for NRIs who want to purchase

homes in back in India.

Economical charges

ICICI bank provides one of the most economical charges with respect to remittances. This being

one of the major requisites of customers is a huge influencer.

Innovation

24


25/38

4.1.8. SWOT Analysis of HSBC

Strengths Weaknesses Opportunities Threats

Brand Equity Limited Services Untapped markets Reverse Brain-

Drain

Country-specific

services

GAPs in service

provided by

competitors

Tough

Competition

Economical

The survey and SWOT analysis imply the need of certain Core and Soft services that need to be added

to the portfolio.

25


26/38

4.1.9. Recommendations

The main services that need to be added are:

Core Services:

PIS (Portfolio Investment Services).

The survey conducted showed that NRIs were quite enthusiastic about investing in Indian Stock

markets but expressed the lack of availability of such services. Investing in Indian Stock markets

is highly lucrative and rewarding. Considering the fact that India in a developing country and it

is at a high growth stage the amount of probable investors (especially NRIs) is colossal. Seeing

the present trend, it is evident that HSBC needs to include the Portfolio Investment Services

This service is presently only being offered by HDFC. It has the potential to grow as a major

service in the future.

Increase the loan Portfolio.

The bank should try and provide Personal loans and Educational/Sibling loans. This

conclusion has been arrived at with the help of a small survey. The survey was conducted to find

whether NRI students who finished their Graduation/ Post Graduation abroad would like their

siblings in India to pursue their careers/education abroad.

The NRI students will not be able to afford the amount required to sponsor their siblings to

pursue their careers/education abroad. If a sibling loan is opted for, there will be a sizeable

percentage of NRI who will opt for this service.

Wealth Management services

Wealth Management services should be provided for NRIs who are High Net worth Individuals

(HNIs). NRIs who are earning substantial income need to invest their money wisely. The Indian

stock market is very lucrative for NRIs to invest in. There is more and more interest being

generated for investments in the Indian stock markets.This service would help in encapsulating

the NRI (HNI) cadre.

26


27/38

Student Accounts

There has been a trend of many Indian students going abroad for the sake of studies and settling

there. These students mostly open a NRI account to satiate their needs. Its been observed that

most students/persons once open an account and are satisfied with it, they will seldom switchbanks. This means that a student NRI customer is a potential customer for life. ICICI bank is

already providing this facility to NRI students. This service would help HSBC tap the potential

customers at the grass-root level.

Instant Transfers (ACH/RTGS)

Almost every bank has started a facility of instant transfer of funds. This is very vital when it

comes to remitting money during an emergency. Situations where time is of essence might

require Instant transfers. SBI provides instant transfer services. This needs to be added to the

portfolio to give a holistic product offering.

Differentiation of Services

Indians value relationships. This fact does not change even if an Indian goes abroad. These

relationships assume different meanings in various age groups. Instead of offering the same

services to all NRIs the bank can offer slightly differentiated services to different sub-groups ofNRIs. The services need not differ. The positioning of services need to be specific and focused

so as to make the NRIs believe that these services have been specially designed for them.

These services have been differentiated in a manner which has taken all these above factors into

consideration. The culmination of these factors presents a very holistic ideology, by which each

segment of NRIs can be captured.

27


28/38

The services have been separated categorically. They have been represented in the

following manner.

Quick Transfer of money Comfort of Remittance Comfort of Remittance

(RTGS/ACH)

Designated RMs to Credit/Debit card Wealth Management Schemes

facilitate with clients facility for family

Transparency Deposit Schemes Venture Opportunities

in India

Ease of banking for parents back in

India

The differentiation has to be carried out in the above mentioned order.

These are major Core services that need to be added to the services mix to attract more customers.

28


29/38

Soft Services:

Soft Services are certain add on services that need to be provided along with the Core services to make

the whole service offering striking and gravitating.

Festival Offerings

India is a land of festivals. No matter how far an Indian goes, he always remembers the festivals

and sends gifts/money to his loved ones in India. It is during these festivals that remittance

frequencies and amount of money remitted increases drastically. NRIs during this time becomevery fidgety and touchy with regard to service. HSBC could offer special schemes and incentives

to NRIs during these times. These incentives could be reduction in time of transfer, reduced

costs, free gifts etc.

E.g.: During Rakhshabandhan many brothers living abroad send gifts to their sisters living in

India. There need not be any NRI account opened with the bank. Bank of Baroda offers free

remittance without the requirement of opening a account with the bank. This service intertwined

with the festivals would be a huge success.

Increasing Emotional Appeal during Festivals

Festivals like Diwali, Holi are the ones that bond Indian families together no matter how far they

are from each other. The emotions run extremely high during these times. These are the times

when the bank can emotionally bond with the NRIs with relative ease. This can be achieved by

providing small mementoes, or greeting cards or gifts just to remind them that the Bank cares

This emotional attachment will help the bank override small diversions in services. The

customers will be more tolerant that they would be otherwise. This will also help the bank create

positive brand equity in the mind of the consumers.

29


30/38

The list of probable festivals for both the above mentioned points is listed below

Festivals

Gokulastami

Onam

Christmas

Rakhsha Bandhan

Diwali

Easter

Dussera

Holi

Durga PoojaMahakumbhmela

Ramlila

Mahashivartri

Navaratri

Pongal

Ganesh Chaturti

Eid

Bakri Eid

The festivals highlighted in red are the ones that will have maximum NRI activities. These are the top

priority festivals that need to be targeted directly.

Tie-up with Online gift-shop

NRIs normally remit money to India. But they also like to surprise their loved ones with gifts and

other articles. It becomes a lot less cumbersome for a NRI when he is able to buy gifts

directly linked to the website of the bank. Not only that, it also gains the trust of NRIs as they

already trust the bank. This service will have a few positive effects. The NRI/s likes/like to work

with the bank as it provides a plethora of options for gifts, it saves his time, and he trusts the

bank. Then it affects the online gift shop which gains to stand a lot of revenue from this venture.

30


31/38

Student Related Services

As NRI students are one of the target segments, it is vital that HSBC targets them in every

possible way. This service could be an extension to country guide. The bank could provide NRI

students guidance in form of selecting colleges, the residence, the underlying areas, loan

guidance etc.

Reverse Effect

Normally, the trend is that most NRIs send gifts to their loved ones in India and not the other

way round. But, today many families back in India want to gift their loved ones in the foreign

countries. During their (NRIs) special days, HSBC on behalf of the families in India or on their

request can send a small gift/memento to the NRI. Indians are one of the most emotional beings

in the world. The NRIs would be very touched and delighted. This would again help in creating

an affinity towards the brand. This can be termed as reverse-effect.

Extension of Country Guide

The country guide which is being provided by HSBC bank is only extended to USA. This service

is one that is not being provided by the competitors. According to a survey that was conducted

many NRIs especially students are very open to the idea of country guidance. If this service

could be extended to other countries it would be received positively by the NRI customers who

yearn for such services.

Tie-ups with Online sites providing add-on services

There are a few online websites such as www.aai-baba.com and www.doorstepdoctor.com

which specifically cater to the needs of the NRIs.

Aai-baba.com provides parental care (includes providing tiffins, providing chauffeurs, maids

etc.) to parents of NRIs. This service is presently available only in Maharashtra.

Doorstepdoctor.com provides medical services for aged parents of NRIs at the comfort of their

homes. They provide regular medical checkup of patients, hospitalization, medication etc. all in

all a holistic medical care service.

31
http://www.aai-baba.com/http://www.aai-baba.com/


32/38

Today most NRIs who have been settled abroad for a while worry about their aged parents

health and well being. If these websites can tie up with HSBC their advertising will be done

through the banks website. In return, HSBC will have the ability to provide which other banks

cannot provide. This would act as huge influencer for selecting a bank. The NRI customers of

HSBC will have access to these websites and the trust factor of these websites will increase

monumentally once it ties up with this bank.

Thus, it results in a Win-Win situation for both the parties.

Promotional Activities

Sending cards/mementoes on occasions:

32


33/38

The bank can identify the reason during which money/gifts are being remitted. This column can

be optional. If the occasion is wedding, Child birth etc. the bank can from its side send a

gift/card/memento to the family of the NRI. We would be targeting one of the important

recipients of the service.

Promoting Occasion-wise services:

In the previous section the need to differentiate services was explored. These services need to be

effectively promoted during those festival months so as to gain the maximum out of these

festivals and attract the customers.

Direct Marketing:

Direct Marketing is one of the most powerful tools in banking sector. It allows the bank to make

personal contact with the customers/NRIs, in the process building a strong relationship with

customer. A letter drafted in a Indian way (some Sanskrit words/slokas etc.) with traditional

Indian envelope will surely grab the attention of the NRIs.

The main advantages of Direct Marketing are:

Quick to produce:

Preparation and mailing a small promotion is possible within days or weeks. Direct mail is

perfect for quickly testing prices, offers, and potential audiences. We/HSBC complete contro

over the media, the audience, and banks offer.

Quicker response:

33


34/38

Not only is direct mail quicker to prepare, but response time to direct mail is usually quicker as

well. HSBC can project the final results of a mailing quickly and accurately. Ogilvy can build an

advertising campaign with more confidence by testing small lists, then building to larger lists.

Highly targeted:

Using carefully developed lists, the bank can target its mailings more selectively than with most

other media. Almost any market segment, buyer profile, or area of the Treasure Coast you feel is

most appropriate for your business can be reached with effortless ease.

Less competition:

The advertising message does not have to compete with other advertising messages. Thecompetitors are less apt to know your current strategy.

More personal:

Not only can letters be personalized via mail-merging techniques, but there can be use of more

informal language in writing the letter and the letter can be directed to the specific interest of the

reader.

Enhance newspaper advertising:

The bank can build on customer awareness by complimenting its print advertising with the

impact of targeted mail.

Easy response:

The inclusion of an order card and return envelope makes it convenient for the consumer to

respond to direct mail.

List of loyal customers:

34


35/38

Direct mail will allow the bank to build and maintain a list of prime prospects for future direct

mail campaigns.

Targeting Students who are giving GRE/GMAT

Most of the future generations of NRIs are students who give their GRE/GMAT exams and go

abroad. They study and often settle in foreign countries. If HSBC could offer some kind of

student guidance and student accounts (Refer Core services), the potential customers would be

targeted from the infancy stages. This time is the easiest time to build brand loyalty. By targeting

these students, we would capture a major chunk of student population of NRIs.

Offering Special Schemes to NRIs working in Organizations

Today, one of the major chunk of NRIs are persons who have been sent abroad through their

organizations back in India or ones who have been hired by Fortune 500 companies. Most of

these companies have a sizeable amount of Indians working amongst them. If HSBC could

provide certain additional features to the NRIs working in these organizations (like Vodafones

corporate offers), then it could easily capture these segments.

Advertising Near Consulates

Advertising inside consulates or on consulate website would be a very difficult proposition. Most

people who want to go abroad would have to visit a Consulate to obtain a visa. I

hoardings/signage/s could be displayed near these consulates it would aid in brand recall. OOH

has been gaining more and more prominence in the recent past. So it is preferable the company

displays these hoardings/signages in these areas.

Participating in NRI events/meets:

35


36/38

The one thing that NRIs all over the world predictably do is they have a meeting or event

somewhere in the world once every 6 months or 1 year. All NRIs of one community make it a

point to participate in these events. The thing that can be exemplified is that majority of the

target segment attends these meets. Examples of these meets could be Viswa Hindu Parishad

Meet, NR Maharastrians Meets, etc. If HSBC sponsors such an event then it can easily

promote its NRI accounts in these meets. Simple participating would be a brand building

exercise.

This would be a very powerful tool as the company would be directly interacting with its target

audience. This congregation of NRIs presents a huge opportunity to the bank to advertise a

relatively economical cost and high returns.

Offering special schemes at NRI meets:

This is an extension of the previous point. To woo the target segment the company can offer

certain incentives so that the NRIs get attracted. Eg: In a worldwide Maharastrian meet the bank

can offer special schemes on remittance of money to Maharashtra.

36


37/38

4.1.10. Conclusion

NRI banking is one of the upcoming niche markets in the banking sector. NRI banking is sure to gain

more prominence in the near future. The growing trend of NRIs exemplifies the fact that sector of NRI

banking is about to grow exponentially. The frequency of Indians settling in various parts of the globe

like Australia, New Zealand etc. has increased dramatically. The only hurdle that makes the niche a bit

challenging is the amount of the banks that are coveting for the market share in this segment.

HSBC, being one of the most premium banks in the world, is sure to gain more prominence in NRI

segment. It needs to improve its customer service and invoke the desire in customers to open NRI

account in its branches. NRI banking is a segment which has eluded HSBC for a long time.

It can be concluded that HSBC has the capability to capture the much coveted NRI segment with some

focused and effective promotion strategies.

37


38/38

27250133 Summer Project Part 2

Documents

Transcript of 27250133 Summer Project Part 2