It is quite a feeling when I look at the new brand campaign by Union Bank of India in a scenario where Lehman Brothers is no more, Merrill Lynch got sold off for a paltry sum and AIG is about to get liquidated.
In retrospect, everything seems so easy and stupidly missed. It is a commonly accepted fact that any financial institution needs a stable, low cost, least elastic source of funds to further invest and make money grow. And the stablest, least cost, least elastic fund is the money that the banks accumulate through the 'ordinary' savings accounts.
Investment Banking can best survive on retail savings account.
Everybody is writing the same in big bold letters now. What were they doing till now? What was the 'hep' investment banking hotshot 'Lehman Brothers' thinking for 158 years? Was this simple concept not taught in all the IIMs where Lehman Brothers used to be one of the top recruiters?
Union Bank of India on the other hand is the conservative, not so forward looking, slow to change bank. Interestingly UBI seems to be not bothered by the dipping liquidity scenario and spending over double the amount in media advertising and relaunching itself with a new look and logo.
Bank of Baroda has done it two years back. Canara Bank did it last year. And now Union Bank of India has also gone ahead and effected a brand repositioning by spending Rs. 75 crores.
What is the reason that almost all the supposedly MNC banks with all the best talent pool are getting impacted by the global liquidity crunch but the nationalised boring banks remain untouched?
Sometime I like to reason that human proactiveness is the cause. To sound more philosophical, progress is the cause.
The smart quick thinkers are always short sighted. Tighter targets, Rat race to achieve those targets always leads to short-sightedness. Being restless to achieve targets, to achieve materialistic career ambitions is the reason.
Being cool and relaxed about life and not thinking about too much quick progress help avert short-sightedness by default. (Mind you, not by design)
Interesting thought. Isn't it?