Insight into Brand Management Practices of BFIs in Nepal
The Banking and Financial sector of Nepal is considered to be the most stable, lucrative and reliable for a person aspiring to build a strong corporate career. As such, competition is cut-throat in the sector with thousands of individuals flaunting their specialized academic degrees and work experience. Amidst this nature of the sector, a person who has made remarkable progress in a short period is Mr. Nirajan Kandel, Deputy CEO at Reliance Life Insurance.
Kandel’s BFI career started at Siddhartha Bank in 2006 backed up by his strong academic base as a graduate of MBA and ACCA degrees. Owing to a lack of interest in his assigned department, he moved on to Citizens Bank where he quickly became the branch manager in one of the largest branches of the bank in 2009. He found his career breakthrough when he joined his institution of choice, Standard Chartered Bank in 2010. While many employees in banks work in a department for an extended period, Kandel was fortunate enough to work across several departments due to his finesse in the sector. He was recognized as a high performer in the bank for three consecutive years. After 8 years in Standard Chartered bank, he entered Reliance Life Insurance as the Deputy CEO citing his desire to learn more in a different financial sector.
Branding Reliance Life Insurance
The insurance industry in Nepal has its roots way back in 2004 B.S. when Nepal Insurance Company started its operations. However, in comparison with other financial institutions like banks, the insurance industry is lacking in one major aspect i.e. quality of human resources. Particularly in the branding periphery, insurance industry employees lack a holistic understanding.
Kandel believes that the whole idea of branding must resonate with the brand values and promises which seems to be lacking in the Nepali industry. Also, most people possess a half-baked understanding of branding as a thing to do name, colors, logo, and print posters. These aspects that are heavily neglected by many are what Reliance aspires to fulfill. Reliance Life Insurance has consistently looked to align its branding actions with its core values. Kandel states that every business needs to address one imperative question – Why does my business exist? Reliance exists to provide protection to its customers and encourage a disciplined saving habit. Its marketing and branding exercises are focused on one central theme – Live Life. Making the lives of customers convenient is what Reliance looks forward to inculcating in its actions.
Merger & Acquisition in BFIs – Brand Implications
A lot of BFIs in Nepal have opted for mergers and acquisitions (M&A) in recent years. M&As between companies include either a larger institution acquiring a smaller one or companies of similar size merging to create an entirely different institution. Such events are bound to have an impact on the perceived brand image of the acquisitor or the newly merged entity. Kandel stresses that the brand image of entities opting for M&A is carried forward after the process and the new entity must perpetuate the positive aspects of merging brands while improving on the negative aspects. Brands must also define the values and promises of the new entity post-M&A to build a good brand.
Branding in a Homogenous Market
The Banking and Financial sector is marked by a homogenous market. Products and services in this sector are identical in nature and differentiating brands based on them is difficult. Proper brand management practices are pivotal in developing a unique brand image. Kandel notes that corporate personnel of the BFI industry must understand what a brand is, to begin with. Beyond hoarding boards, TVCs, flyers and social media posts, branding is all about shaping what customers think about your brand.
Moreover, Kandel also argues that one of the major bottlenecks in the industry is that senior managers like CEOs in Nepal feel the need to intervene in every business process. Such leaders drive an organization according to their mindset and he feels that many leaders in the Nepali BFI sector are unaware of the branding concept. Leaders need to understand that they will lead the brand towards prosperity if they recognize the potential of those under them. Moreover, leaders must address branding as a crucial business function and form a specialized unit for the matter.
Optimizing Customer Experience
Contemporary businesses have upgraded the concept of customer satisfaction to customer experience. Optimizing customer experience is a crucial brand management function. Especially in the digital platform which has grown significantly in the past decade, the quality of customer experience can dictate the perceived image of brands. With Fintech platforms like digital wallets and mobile banking taking their hold in Nepal, Kandel notes that brands must focus on creating a frictionless digital experience for customers. While Nepali Fintech platforms are working to optimize customer experience, having a complete digital ecosystem is not possible because of the absence of a central KYC system.
However, it comes without a doubt that brands cannot neglect customer experience in the physical realm. There is a sizeable population that, to date, prefers physical touch over digital. Kandel adds that BFIs must address the varying preferences of people and optimize the experience of different sets of customers.
The State of Fintech Industry in Nepal
The Fintech industry is and will be the disruptor in the finance sector. Kandel believes that at least for the next 10 years, Fintech will be the buzzword throughout the world as technological advancement is experiencing geometrical growth. Later developments in blockchain technology have also seen promising signs. Eventually, the next big innovation is going to be in embedded finance which could be the bigger disruptor in the financial world.
The Fintech industry in Nepal has seen a major revolution in the digital wallet and mobile banking periphery. Preference for digital money while making payments, along with QR codes has become evident in our surroundings. As such, there are a lot of digital wallet brands that have sprung out in the past decade. However, Kandel stresses that Nepal, being such a small country, does not need so many digital wallets. He adds that despite operating at a loss, digital wallets are aspiring to be future digital banks and they might as well continue their operations to build their valuation which will help them in many aspects. Moreover, the latest monetary policy of Nepal has also talked about facilitating complete digital banking platforms. Digital-only banks can very possibly be the next big disruptor in the BFI realm of Nepal.
