NEW TO BANK – ACQUISITION

SIP Project Report

Submitted in Partial fulfillment of the
requirements for the

PGDM Program
2018-2020

By Saloni Garg
18PGDM232

Supervisors:
1. Mr. Dhawal Saxena
2. Prof. Nalin Jain

International Management Institute, New Delhi

2019

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ACKNOWLEDGEMENTS
I would to express my sincere gratitude to Mr. Dhawal Saxena, for guiding me through
the entire program of summer placements under the project named “New to Bank
Acquisition” and for addressing numerous queries with utmost patience despite their busy
schedule.
Accompanying Mr. Praveen Kumar on customer visits and observing his customer
handling techniques provided great knowledge on sales techniques and on how to
understand customer requirements and how to pitch them for other products and services
which they are not using and probe them into using various banking products provided by
HDFC Bank. The hospitality of Mr. Dhawal Saxena and his team made me feel the branch
to be my own and I was always treated no less than a full time employee.
The successful completion of this project wouldn’t have been possible without the
guidance of my project mentor, Prof. Nalin Jain and his views on any initiative or process
I was to work on. I am extremely grateful to have him as my project guide and would like
to take this opportunity to express my sincere gratitude to him for investing his time in this
project.

-SALONI GARG

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COMPLETION CERTIFICATE

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Table of Content
EXECUTIVE SUMMARY ........................................................................................................................................... 5
INTRODUCTION ........................................................................................................................................................... 6
 Banking Sector ........................................................................................................................................................ 6
 HDFC Bank Ltd...................................................................................................................................................... 7
 New To Bank Acquisition ................................................................................................................................. 10
OBJECTIVE OF THE STUDY ............................................................................................................................... 11
METHODOLOGY....................................................................................................................................................... 12
FINDINGS AND CONCLUSION ........................................................................................................................... 13
RECOMMENDATIONS ........................................................................................................................................... 20
I. Recommendation from Customer Survey ................................................................................................... 20
II. Recommendation from Bank Manager ................................................................................................... 20
LIMITATIONS OF THE STUDY .......................................................................................................................... 21
SCOPE FOR FUTURE IMPROVEMENTS ....................................................................................................... 22
BIBLIOGRAPHY ........................................................................................................................................................ 23

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EXECUTIVE SUMMARY

The banking sector in India is well regulated and organized by Reserve Bank of India (RBI). The
Indian bank sector consist of various types of banks like- Private Sector Banks, Public Sector
Banks, Foreign banks, Regional Rural Banks, Urban Corporative Banks, Rural Corporative
Banks, etc. The Indian Banking Industry keeps evolving by introducing new products and
services.
One of the main objective of any organization is to strengthen its customer base by attracting
more and more customers. In banking sector also, banks try to increase its customer base amidst
the high competition by approaching new customers and informing them about their products.
This can be done either by acquiring competitor’s customer by providing better services and
benefits or by introducing it in untapped market.
Another objective of any organization is to increase its market share which can be done by cross
selling. In banking sector, organizations can increase its market share by selling their other
products and services (which are not being used/purchased) to their existing customers. Also,
whenever a banking product launched in the market, it becomes the duty of employees to inform
about it to the existing customers.
One of the main function of banks is assemble and manage money of their customers. They do it
by acting as intermediary between savers and spenders. They collect money from people who
save it and provide it to the customers who need money. The difference in interest rates acted as
their only source of income.
But with advent of Banking and Financial Sector in the whole world which was majorly fuelled
with technological advancements, they have evolved as well. They have started offering various
advanced products apart from traditional ones. Some of these products are Recurring Deposits
and other term deposits. However, now the banks have evolved even further. The customer today
demands to be treated special and banks have come up with customized products for their
customers. One of such product Auto sweep facility where customers provide standing
instructions as per their comfort and requirements.
These customized services that banks are offering, helps bank in two ways- helping them to pitch
new clients by giving them what they want, and selling new products to existing clients. Apart
from this, banks have other decisions to make like the percentage of CASA Ratio to maintain,
corporate banking versus retail banking, acquiring few big accounts versus acquiring multiple
small accounts, and many more. All these decisions are very vital when we see them from the
business perspective and can affect the profits and risks involved.
We worked towards analysis of the product and marketing of the new client acquisition by
introducing a new product for small and medium earning customers. We were responsible to
approach the target segment and analyze their response and accordingly devise the marketing
strategies for the product. The step clearly displays the importance of such customized products
today.

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INTRODUCTION

 Banking Sector

The banking sector is one of the fastest growing sector in India. It is considered as the most
preferred source of employment. Also, the role of government to improve and promote this
sector has been increased from last few years, because of which more and more people are
opening their accounts in banks. The schemes like Pradhan Mantri Jan Dhan Yojna played an
important role for the growth of this sector. Along with this, digitalization in this sector not only
made the transactions easier but it also helped the customer to take the benefits of the services
while sitting at home.
The main function of banks are to get money from the households having excess money and
provide it to customers who need funds, banks and other financial institutes are the bridge for
such customers. Banks also play a role of advisors for their clients, it gives advices related to
investment and insurance.
The client/customer of the bank can be government, corporates, small business units, etc.
Also, the Indian banking sector are classified into schedule and non-schedule banks, both of
which are following the rules and regulations imposed by the apex bank, Reserve Bank of India
(RBI).

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  HDFC Bank Ltd

HDFC Ltd is a premier private company of India. It is one of the leading banking and financial
services company and is headquartered in Mumbai, India. The bank was incorporated in 1994
and started its operations in January, 1995. The bank is having 5103 branches across different
cities in the world. These branches are linked through an online portal. Also, the bank is having
more than 13000 ATM network available in different areas of India.
HDFC Bank is having five core values on which it works, Operational Excellence, Customer
Focus, Product Leadership, People and Sustainability.
The current Managing Director of the company is Mr. Aditya Puri. And the present chairperson
of the Board is Mrs. Shyamala Gopinath.
HDFC Securities Ltd. and HDB Financial Services Ltd. are the two subsidies of HDFC Bank
Ltd. Also, the bank is having 3 primary business segments that is, banking, wholesale banking
and treasury.
 Retail Banking- This sector serve to the customer through a branch network and other
delivery channels. This sector raises money from the customer as deposits and provide
loans and other services. HDFC Bank is having large number of products for the retail
customers.
 Wholesale Banking- This segment provides loans, non-fund facilities and transaction
services to corporates, governments, small medium enterprises, etc.
 Treasury- This segment is about net interest earning on investment portfolio of the Bank.
Foreign Exchange, Derivatives, etc. are some of the examples.
Other than this, the bank’s shares are listed in Bombay Stock Exchange Ltd (BSE) and the
National Stock Exchange of India Ltd (NSE).
HDFC Bank is the first bank of India that launched International Debit Card in association with
VISA. It also issues Master card Maestro Debit Card.
As per HDFC Annual Report 2017-18, the company’s net profit was 17,487 Crore, which was
20.2% higher than FY 2016-17. Whereas, their balance sheet size increased by 23.2% from the
previous financial year 2016-17.
The company is focusing on digital evolution. It provides customized products and services to its
customer and evolve more in this area with the help of digitalization and new technologies. To
enhance customer’s experience, the company is taking help of AI Technologies, Software, digital
platforms, etc. some of the examples of this technologies are- EVA (Electronic Virtual
Assistance), OnChat, DCC (Digital Command Center), PayZapp, etc.

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CORE VALUES

The HDFC Bank is having some core values on which their business work. Their core values
are-

 Operational Excellence
This bank believe in systematic and smooth operation activities, for an example, one of
the operation activity is daily transaction of money of different customer at different
banks (in retail banking), the teller (collector of money) needs to recheck transactions by
each customer and provide the information to the Branch Manager who again checks and
sign the opening and closing report of the day.

 Customer Focus
The bank is customer centric and always try to satisfy customer need. The bank expect
full focus on customer from their employees. Even, to increase the customer satisfaction
level it starts providing customize and personalize financial products to its customer.

 Product Leadership
The bank provide large set of products and services to its customer. It has diverse range
of products like- Accounts and Deposits, Loans, Insurance, Cards, Demat Services,
Investments, etc.

 People
Along, with customers, the employees are also important for any organization. HDFC
believes that it is important to make their employees happy in order get successful results
and achieved targets. Also, the sustain its current position the employees need to be
satisfy with their organization and need to work together in order to reach the
organization’s goals. The Human Resources Department of HDFC Bank is looking after
the need and expectations of their employees from the bank in an effective and efficient
way.

 Sustainability
To remain on the top and to sustain the market position, the bank needs to achieve the
targets and earn certain level of profit. The company keeps increasing its targets and
goals to sustain its market share and remain market leader by having competitive
advantages.

It is believed that because of such core values and beliefs the bank is No.1 private bank in
the country.

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MANAGEMENT

The top management team of the bank includes the people with diverse background and with
years of experience in different banking fields. HDFC believes that people are their competitive
strength and that’s why acquire best talent for their organization. Also, they try to retain them by
providing certain employee benefits which increase the sense of ownership.

HDFC Bank is having large number of senior executives with vast experience in banking sector
in India and abroad. The list of members of the Board of Directors of HDFC Bank is as follows:

 Mr. Aditya Puri

 Mrs. Shyamala Gopinath

 Mr. Partho Datta

 Mr. Bobby Parikh

 Mr. Malay Patel

 Mr. Keki Mistry

 Mr. Paresh Suthankar

 Mr. Kaizad Bharucha

 Mr. Umesh Sarangi

 Mr. Srikanth Nadhamuni

Mrs. Shyamala Gopinath (Ex-RBI Governor) is serving as a chairperson of the board. Mr. Aditya
Puri has been the Managing Director of the bank since 1994. Mr. Paresh Suthankar is a Deputy
Managing Director and Mr. Kaizad Bharucha is serving as an Executive Director.

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  New To Bank Acquisition

Acquiring customers is one of the major task in retail banking. In HDFC Bank also, the success
of achieving the targets of acquiring new customer is the main task of branch banking team
across the world.
Acquisition in banks are usually acquiring new customers. It is a micro level activity at the
branches and is a primary responsibility of the teams.
The main objective of acquisition is to increase the customer base and the market share. Also,
through this HDFC Bank also tries to make their bank as primary bank for their customers. And
attract more and more active and loyal customers who will transact profitably and carry
maximum numbers of products and services of the bank.
One of the example of new to bank acquisition is HDFC Bank signed Memorandum of
Understanding (MoU) with Indian army for salary accounts. In this project, they are providing
extra benefits to the army officers if they open their salary/current account in HDFC Bank.

Fig: HDFC Bank Signed MoU with Indian Army for Salary Account

By signing this MoU the Bank is acquiring new customers that is the Indian army. Along with this
they provide some benefits to other companies also (like- TCS) so that these companies promote
their bank among their employees and they open their salary account in HDFC Bank.

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OBJECTIVE OF THE STUDY

The main objective of any company is to increase its market share and strengthen its customer
base. Banks and financial institutes also have same objectives. And to fulfill their goals, banks
try to acquire their competitors’ customers as well as try to penetrate the untapped market where
no other bank (competitors) entered. Also, in order to become primary bank, banks also try to do
cross selling that is, selling their other major products to their existing clients.
New to bank acquisition is an important goal of any bank and it is important to know from where
the banks can get new customers. Along with this, it is also important for the banks to know the
needs and preferences of customers. Other than this, it is also important for the bank to know
about their competitors, their offerings, their strategies, etc.
These study on new to bank acquisition will be helpful for banks. The research will help the
banks to know about the needs and wants of the customers, it will also help them in determining
the strengths and weaknesses of their organization and their competitors. With the help of this
data they will get to know about the opportunities ahead and also help them to overcome their
weaknesses.
These study is basically a market research consist of a survey of customers of different banks.
The questionnaire for the survey has certain questions which will help banks to determine about
their customers better, also it will help them in offering better products and services to them. It
will also help them to modify or innovate their products and services as per the demand. Along
with these, it will help them to know why customers are attracted towards their competitors,
which competitors’ products and services are better than theirs, and how can they provide those
products and services with better features.
These study will also help them to find the loopholes in their system and get better insights to fill
those gaps with the data gathered through these market research. It will also help them in gaining
competitive edges in the market and getting insights about the current market trends.
The objective of these study is to gather all these information about customers and competitors
and extract data from these information. After getting the data, an analyses of these data is
needed to get the result. The result will provide the detailed information about the customers like
their preferences, their expectations, their future plans, their primary bank, financial products and
services they use, financial products and services they are intended to buy, etc., it will also
provide detailed information about the competitors like their major products and services, their
offerings, their weaknesses, threat from them, their marketing strategy, and what makes their
customer to choose them as their primary bank, etc.
From these result, banks can change or improve their strategies to attract more new customers,
also it will help them in developing new and better products for the customers as per their needs
and wants, also they will be able to provide more satisfying and better services to their customer,
which may help them in increasing their market share, customer base and may also help them in
becoming market leader.

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METHODOLOGY

The title of my project was “New to Bank Acquisition”. Under this project I conducted a market
research to analyze the behavior of existing customer for HDFC.
To conduct this research I used a proper methodology. The research includes customer survey of
sample size 20. These customers are the users of HDFC Bank’s services. The survey is
conducted in HDFC Bank Old Judicial Complex, Gurgaon Branch in the tenure of 2 weeks.
The survey is conducted by directly asking questions from the customer who visited the branch.
The survey includes some basic questions that provide some ideas about the customers and about
their behavior for HDFC and the banking sector as a whole. The questions asked are related to
the services that HDFC provide and also about their primary banks. By asking these questions I
get to know about the preferences and tastes of customers in financial products. Also, it helps me
to identify the loyalty of customers.
Before the market research, I learnt about certain products and services of the bank. And to
acquire new customers our branch manager Mr. Dhawal Saxena sent us to different places like-
District Court and to Vegetable vendors. We visited different places in teams to pitch our
products and services. The team consist of 3 member each and all the members need to visit
places together and provide information about the products. Information like- its features,
benefits, costs, etc.
With the help of this activity we get some prospective customers for certain products. Also, it
helped us in determining the most needed and desired product of HDFC. And also about the
position and image of the bank in the market.

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FINDINGS AND CONCLUSION

With the help of the market research conducted on a sample of 20 people and the insights given
by the customers, the research has been successfully completed. And it helped me in analyzing
the behavior of customer for HDFC Bank and its product.

The questions that had been asked to customers and its findings are as follows-

1. How frequently do you visit banks?

a) Daily
b) Twice in a week
c) Once in a week
d) Twice in a month
e) Rarely

Frequency of visiting bank

5% 16%
Daily
11% Twice a week
8% Once a week
60%
Twice a month
Rarely

2. How many accounts do you have in different banks?

a) 0
b) 1
c) 2
d) 3
e) More than 3

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 Bank Accounts in other banks
More than 3 0
10% 10%

3
5% 0
1
2 1
30% 2
45%
3
More than 3

3. Which is your primary bank?

a) ICICI Bank
b) HDFC Bank
c) Axis Bank
d) Kotak Bank
e) Other

Sales

Other ICICI Bank

25% 20% ICICI Bank
Kotak Bank
HDFC Bank
0%
Axis Bank Axis Bank
15% HDFC Bank
40% Kotak Bank
Other

4. Where do you get to know about this bank?

a) Print Media
b) Billboards
c) Friends and Relatives
d) Online
e) Television

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 Awareness
0%
0%
16% 10%
Print Media
Billboards
Friends and Relatives
74% Online
Television

5. Did you ever change your primary bank?

a) Yes
b) No

Primary Bank

35%
Yes
65%
No

6. Which type of banking products/services do you prefer the most? (in HDFC)
a) Accounts And Deposits
b) Loans
c) Insurance
d) Investment
e) Demat Services
f) Cards

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 Preferred Products/Services
0%

10%
Accounts And Deposits
15% 35%
Loans
Insurance
15%
Investment
25% Demat Services
Cards

7. Which attribute of the bank do you value the most?

a) Quality of service
b) Technology used
c) Trust
d) Location
e) Type of Bank

Value
0%
10%
Quality of Service
15% Technology used
55%
20% Trust
Location
Types of Bank

8. Which factor promotes you to use new techniques in banking?

a) Reduced time in transaction
b) Cost effective
c) Ease of use
d) Technology savvy

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 Promotion Of New Techniques

5% Reduced time in
transaction
30%
Cost effective
40%

Ease of use
25%

Tech savy

9. How do you usually get the information about new banking products?
a) Bank Employees
b) Advertisement
c) Friends And Family
d) Agents
e) Other

Source of information

20% 0%
Bank employees
45% Advertisement
20% Friends and Family
15% Agents
Other

10. For how long you have been using the services of HDFC Bank?
a) New user
b) 6 months
c) 1-3 year
d) 4-7 year
e) More than 7 years

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 HDFC Customer
0%
20% 15%
New users
6 months
30% 35%
1-3 years
4-7 years
More than 7 years

Other than these some basic questions has been asked like
1. Name
2. Age
3. Gender
4. Qualification

From the primary research the following interpretations and conclusion has been drawn-
 Majority of the customers visit bank twice in month, but customers who are having their
business account with the bank visits bank more frequently.

 Most of the customers are having more than 1 account in other banks as well.

 Out of all the 20 customers only 40% consider HDFC as their primary bank. The bank
need focus on this area.

 Majority of people get to know about the bank from their friends and family. Bank need
to use this opportunity.

 People don’t prefer changing their primary bank, the reason why few people changed
their primary bank was because of trust issue and bad behavior from the employees of
public banks.

 People visit bank mostly for RTGS/NEFT, Demand Draft, Opening accounts or
depositing cash. But customer preferred HDFC Bank not only for accounts and deposits
but also for loans. Loans are the second most preferred product of HDFC Bank.

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 The bank is already well known because of the quality of services it gives to the customer
and even customers themselves believe that the quality of service is the reason why they
chose HDFC Bank over any other bank.

 Customer gets ready to use new technologies in banks. Mostly because it makes their
transaction fast and easy. Along with this time and cost also play an important role for the
banks to convince customer to use new technologies.

 Customer gets to know about new banking products from the bankers. Advertisement
doesn’t contribute much for HDFC Bank in spreading awareness about its new products.

 According to the data collected the bank is not acquiring new customer but having a good
number of loyal customers who are with the bank from more than 3 years (around 50%).

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RECOMMENDATIONS

From the primary research we get to know so many insights about customers and their behavior
towards financial products/services, HDFC bank, etc.
Following are the recommendations for the bank to acquire more new customers and retain its
existing customer.

I. Recommendation from Customer Survey

I. The bank should try to become primary bank for its customer, for this it needs to provide
some benefits to the existing customer and focus more on cross selling.
II. From the survey we get to know that all the customers who visited the branch were
existing customer, so the bank should also focus on acquiring new customers.
III. As majority of customers get to know about the bank from their friends and relatives,
bank should start taking leading from their existing customers. It will help them in
acquiring new customers and strengthen their customer base.

II. Recommendation from Bank Manager

I. The main focus of the employees should always be on its existing customer rather than
new customer because acquiring a new customer is five time costlier than retaining an old
customer.
II. The bank should give more beneficial offerings to Micro, Small and Medium Enterprises
like Vegetable vendors, General Stores, Stationery, etc.
III. The Indian Government is trying to develop the banking sector because of which so
many new schemes and promotional activities are being introduced. HDFC Bank should
utilize this opportunity and take its advantage for acquiring new customer and serving
existing customers.

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LIMITATIONS OF THE STUDY

The market research that has been conducted have some limitations-

I. The survey is conducted in a small branch of Gurgaon, it cannot be assumed for a

completely unbiased sample of a population.

II. The sample size of the research is small.

III. The research is limited to only HDFC customers. It can only provide the information
about the customers of HDFC Bank and their behavior for HDFC’s product and services.
No data on competitors and their products has been gathered.

IV. The research has been conducted by directly asking customers, if a separate desktop and
an employee code has been provided by the bank, it would be easier to reach customers.

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SCOPE FOR FUTURE IMPROVEMENTS

 Digitalization is a biggest opportunity for the banking sector especially in India. HDFC
should take advantage of this as more and more customers are using e-wallets.

 The bank should improve its website, application and wallet PayZapp.

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BIBLIOGRAPHY

 https://www.hdfcbank.com/htdocs/common/pdf/corporate/Annual_Report_2017_18.pdf
 https://www.hdfcbank.com/

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