CUSTOMER EXPECTATION AND SATISFACTION:

For a banking company,what we feel is imperative is avoid the whole fire-fighting process today and focus on new age banking. New age banking will be driven by customers and requires banks to crate value for customers,run as an optimized business model and evolve with economy in future. Shifts in demographics, incomes, attitudes and behavior, in addition to easily accessible information, are empowering customers to demand greater autonomy, responsiveness and transparency from their banks. Not only do they want personalized products but are willing to shift loyalties and approach another bank that offers them a better deal. Increasingly, banking customers worldwide are exercising their freedom of choice changing their banks in search for better service and custom-tailored products. The writing on the wall is clear: Keep your customers happy and survive. The five imperatives that customers would be looking at to be addressed by their bank of choice are:

Simplified Banking: Make banking sophisticated, yet simple, in terms of processes and services, to enhance banking experience. Data Privacy and Security: Protect the identity of the customer, and ensure appropriate mechanisms are established to proactively guard against internal and external misuse of customer information. Channel Amplification: Develop the right mix of assisted and self-service channels to provide rich,unified and consistent banking experience. Service Accessibility: Incorporate technologies which can make banking accessible for a broader base of population. Customer Serviceability: Develop a responsive, reliable and competent service model, accessible via various channels that continuously take feedback and can improvise.

Channel amplification:
Banks need to understand that customers have a lot a choices. To service their customers,they need to have a right mix of both traditional and new age banking instruments. A customers approach to a channel is additive and not substitutive,so banks need to be aware of that. Banks need to attend following points while formulating their ground and customer strategy, Better communication to enhance profits potential. Better mobility to increase competitive agility. Better customer insight to get new customers. While its personalized service or mass banking service,new channels open opportunities for increasing customer loyalty.

Customer serviceability:
The new age growing base of customers seeks instant gratification. While banks need to balance their service offerings across different segments, they also need to provide a responsive, reliable and a competent service model which provides a uniform level of information and interactions across each channel.

Simplified banking experience

In todays world, a customer has access to multiple channels of banking. Still, we see a drift of customers from one bank to another in search of easy banking processes and smooth and seamless banking experience. With the higher technological and financial awareness of todays customer, they are looking for banks to offer: The search of satisfying the customer, banks have no doubt in recent times started implementing simplified processes and procedures in customer facing business functions, providing a number of value added services and bundling of products through channels such as internet banking. As a result of higher focus on customer service and offering a number of products through a single channel, there have been instances where the cramming of additional features into products and making banking processes, products, and channels very complex to use, has led to a declining customer experience. Providing a simplified, yet, fully loaded banking experience is the need of the hour for banks. Banks will need to take the participative view of customers and design banking processes, products and channels in such a way that banking experience remains easy and simplified and at the same time can offer world class products and services at competitive rates.

Data privacy and security

The resulting impact of data breaches on customer's personal life is huge and has been found to result in emotional disorders and complications developed in both the short and long terms amongst banking customers. In such a critical situation, the basic expectation from customers is to find their banks to be responsive and not only ensures recovery of financial losses but, most importantly, be respectful and empathetic. Banks need to keep in mind two basic points while deciding authentication processes.
1. On-time implementation of government regulations of authentication processes such as FFIEC

in the US and HKM and MAS in Asia that require multi-factor authentication. 2. Biometric authentication methods, such as palm vein scanning, use something you are as the basis of verification, rather than something you have, like a smart card or PIN. Hence, it is logical to conclude that data privacy is still a relevant area of concern for banking customer despite technological advances made in the last few years such as PKI based authentication, secured internet technologies to contain hacking and phishing and strong risk management processes within bank not only to minimize the financial loss but also to safeguard emotional victimization of customers.

Service accessibility:
Accessibility would not only help banks to understand and embrace the diverse needs of their customers; it would also help them transform their business and put them ahead of competition. Investing in accessibility is the smart thing to do for a banking company. With an infrastructure of accessible hardware and software and sound corporate culture in place,banks can do business.
And may be bring sharp focus on gaining business advantage from accessibility, to on-demand business.

BUYING BEHAVIOUR OF CUSTOMERS INVOLVED IN BANKING INDUSTRY

Banks are defined as the "Organizations, which accepts deposits from public and give loans from the general public." In the present time they are over and above this definition. Banks are providing innovative services with innovates styles. ATMs, Credit cards and Internet banking have changed the quality of delivery of services of banks. Banking services are growing with many new additions such as money transfers, Bankassurance, NRI services and so on. Promotion of service has been a challenging task. Banking services being of a sophisticated nature should be promoted carefully, clearly and innovatively. Mass Media Advertising: Most Preferred mode for marketing of Banking Services Mass media advertising includes TV commercials and advertising in national level newspapers which have a wide coverage. Advertising in these has made maximum people aware about the offerings of the banks and established most of the bank names as big brands. In a recent survey ICICI Bank has been considered as the most popular banks in private sector. The use of umbrella branding works well in promotion of banking services. Different types of advertisement campaigns have been seen in form of TV commercials and as print ad in newspapers. Print ads mainly focus on corporate image advertising of banks as well as a new offering of the bank such as increase in interest rate on deposits or decrease in the interest rates in loans and so on. TV commercials mainly focused on corporate advertising, where banking service is promoted as a whole rather than a particular product of banks. Themes and appeals used in TV commercials of banking: Advertising appeal is the method used to draw the attention of consumers and to influence their feelings toward the product, service, or cause. There are hundreds of different appeals that can be used as the foundation for advertising messages. These are the central idea of an ad which has been used to catch the attraction of customer by heart. The theme of a commercial strikes a person in depth and forces him/her to act in the desired manner. Generally advertising appeals are broken into two categories: rational appeals and emotional appeals. Personal Selling is being very much popular and effective for private banks in India. It is concerned with face to face meeting with the customer and making the presentation of the service offering to the prospect and making the person customer of the bank. This process has its own advantages and disadvantages. Banks may have some complex service offer which may include so many charges and facilities of different types. The biggest advantage of personal selling in banking services is that the salesperson can make the prospect well understood about the product. Further customers may prefer it because they need not to go anywhere the sales person comes to them. But there is certain limitation also people usually do not give their time to meet and talk on issue. It also does not become cost effective if the sales are not closed in a handsome number. Banks are going to be societal now and taking care of environment the plantation Bank of Baroda and Punjab National Bank is the examples of the same. Consumers are always emotional about the Brands doing social and national services. Banks wants to win the faith of the customers and also wants to come out from their typical financial image. Societal marketing really helps to attain this objective.

Sales promotional has become popular due to the popularity of the usage of debit and credit cards. The offers are also given to the customers for registering and transacting with internet banking. Further there are lots of other schemes also giving discount and other gifts on different types of purchase on debit and credit card of the bank.. However the sales promotion has its nature that it is always for a particular time being. The purpose of sales promotion is to enhance the sales in particular time duration. The sales promotion offers are redesigned frequently for effective promotion in sales. Consumers feel happy when they get something extra then the regular utility. Sales promotion offers really attract customers. In present time the most popular tool for promotion of banking services has become Internet Marketing of services. E-Advertising is being very much popular. In city areas of India, people use internet so frequently. Studies tell that they use internet mostly for checking their mails, finding results and educations and research purposes. The eadvertising of banking services not only promote the services by giving offers but it also interacts with the person and a potential customer can purchase the product with the help of this. However internet advertising in pop ups irritates the internet users but advertisements done on home page of any website such as email service provider is useful and customers get knowledge about the new banking services and promotions. When they see something in front of their eyes they can remember it much.

HENCE,WHILE GOING FOR BANKING PRODUCTS AND SERVICES, A CUSTOMER ALMOST ALWAYS TAKES A COGNITIVE DECISION, WIEGHING THE UTILITY OF THE PRODUCT FOR HIS PRESENT AS WELL AS FUTURE. CUSTOMER WILL LOOK TO TAKE A RATIONAL DECISION AS OPPOSED TO AN EMOTIONAL ONE INCASE OF PURCHASING BANK PRODUCTS. HAVING SAID THAT, ONE CAN NOT RULE OUT THE IMPACT OF DEMOGRAPHICS ON BUYING BEHAVIOUR WHEN AVAILING BANK PRODUCTS AND SERVICES.

CUSTOMER SATISFACTION IN THE BANKING INDUSTRY

It appears that what consumers are saying is that they expect good products and services from their bank and that what is important to them is to have courteous and professional employees whom they can trust to explain them; and correct problems when they happen. Banking operations are becoming increasingly customer dictated. The demand for 'banking supermalls' offering one-stop integrated financial services is well on the rise. The ability of banks to offer clients access to several markets for different classes of financial instruments has become a valuable competitive edge. Convergence in the industry to cater to the changing demographic expectations is now more than evident. Bank assurance and other forms of cross selling and strategic alliances will soon alter the business dynamics of banks and fuel the process of consolidation for increased scope of business and revenue. The thrust on farm sector, health sector and services offers several investment linkages. In short, the domestic economy is an increasing pie which offers extensive economies of scale that only large banks will be in a position to tap. With the phenomenal increase in the country's population and the increased demand for banking services; speed, service quality and customer satisfaction are going to be key differentiators for each bank's future success. Thus it is imperative for banks to get useful feedback on their actual response time and customer service quality aspects of retail banking, which in turn will help them take positive steps to maintain a competitive edge.

Primarily it becomes important to live up to customers expectations to create customer satisfaction for banking customers. The key features determining customer satisfaction provided by banks would be: 1. Product and services provided by the banks, both saving and investment. 2. Customer emotions while availing a banks services i.e. how a persons mood is controlled in banks services cape. 3. Customer perception of fairness of treatment by staff and delivering what has been promised esp. service aspect of banking. 4. Core banking solutions provided to the customers.

Industry analysis of Indian banking industry

SWOT Analysis of Banking sector
Strength of the Indian banking industry lies in its asset quality, growth and profitability over its global peers over the last few years. The banking index has grown at a compounded annual rate of over 51 percent since April 2001 as compared to a 27 percent growth in the market index for the same period. Geographical reach and market penetration have expanded at a very fast pace over the past few years. Customer base is constantly growing. High capital inflows has appreciated a lot over the years. Liquidity position has been quite comfortable in the recent times. The buoyant capital market coupled with an appreciating rupee vis--vis US dollar has been attracting large foreign institutional inflows during the last two years. Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks in comparable economies in its region. Thanks to reforms and stringent regulatory measures taken by RBI Indian banks are considered to have clean, strong and transparent balance sheets thus good quality of assets relative to other banks in comparable economies in its region. Other noticeable developments contributing to banking industry strengths are: 1. Indian banks have compared favourably on growth, asset quality and profitability with other regional banks over the last few years. The banking index has grown at a compounded annual rate of over 51 per cent since April 2001 as compared to a 27percent growth in the market index for the same period. 2. Policy makers have made some notable changes in policy and regulation to help strengthen the sector. These changes include strengthening prudential norms, enhancing the payments system and integrating regulations between commercial and co-operative banks. 3. Bank lending has been a significant driver of GDP growth and employment. 4. The vast networking & growing number of branches & ATMs. Indian banking system has reached even to the remote corners of the country.

5. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. 6. In terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets relative to other banks incomparable economies in its region. 7. India has 88 scheduled commercial banks (SCBs) - 27 public sector banks (that is with the Government of India holding a stake)after merger of New Bank of India in Punjab National Bank in 1993, 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. 8. Foreign banks will have the opportunity to own up to 74 per cent of Indian private sector banks and 20 per cent of government owned banks. Weakness of the sector pertains to factors like limited market penetration in few geographies, lack of fundamental institutional skill level and less household savings. Public sector banks hold over 70 percent of total assets of the banking industry. However they are Severely lacking in sales and marketing, service operations, risk management and as a result these banks have not been able to match the aggressive growth by the private players. Although the semi urban areas have been successfully penetrated the banking sector hasent been able to fully penetrate through the rural areas. And if overall profitability needs to be improved this segment cannot be ignored. According to a McKinsey report, even though Indian households save 28% of their disposable income, they invest only half their savings in financial assets. The rest goes towards buying gold, housing, and buying/maintenance of equipment for the various small Indian enterprises.some other weaknesses: 1. PSUs need to fundamentally strengthen institutional skill levels especially in sales and marketing, service operations, risk management and the overall organizational performance ethic & strengthen human capital. 2. Old private sector banks also have the need to fundamentally strengthen skill levels. 3. The cost of intermediation remains high and bank penetration is limited to only a few customer segments and geographies. Opportunities for the Indian banking industry lies in the untapped rural market Banking sector has not penetrated to the rural sector .About 80% of the rural households in India have no access to formal lending. About 46% of these used informal lending channels, 24% of which resorted to unregulated money lenders. These unregulated money lenders charge astronomical interest rates on their loans which reflect that there is scope for cheaper and more formal lending in the rural credit market. The rural economy accounts for more than two-thirds of India's population and has great untapped potential. The Indian economy is expected to grow at a significant rate in the next couple of years not only in India but also overseas. The Indian banking industry is likely to record significant growth in the short to medium term. By the end of 2012, the asset base of the Indian banking industry is expected to exceed the $1 trillion mark, with profits of about $10 billion. 1. The market is seeing discontinuous growth driven by new products and services that include opportunities in credit cards, consumer finance and wealth management on the retail side, and in fee-based income and investment banking on the wholesale banking side. These require new skills in sales & marketing,

credit and operations. 2. With increased interest in India, competition from foreign banks will only intensify. 3. Given the demographic shifts resulting from changes in age profile and household income, consumers will increasingly demand enhanced institutional capabilities and service levels from banks. 4. New private banks could reach the next level of their growth in the Indian banking sector by continuing to innovate and develop differentiated business models to profitably serve segments like the rural/low income and affluent/HNI segments; actively adopting acquisitions as a means to grow and reaching the next level of performance in their service platforms. Attracting, developing and retaining more leadership capacity 5. Foreign banks committed to making a play in India will need to adopt alternative approaches to win the race for the customer and build a value-creating customer franchise in advance of regulations potentially opening up post 2009. At the same time, they should stay in the game for potential acquisition opportunities as and when they appear in the near term. Maintaining a fundamentally long-term value-creation mindset. 6. Reach in rural India for the private sector and foreign banks. 7. With the growth in the Indian economy expected to be strong for quite some time-especially in its services sector-the demand for banking services, especially retail banking, mortgages and investment services are expected to be strong. 8. Reserve Bank of India (RBI) has approved a proposal from the government to amend the Banking Regulation Act to permit banks to trade in commodities and commodity derivatives. 9. Hybrid capital: In an attempt to relieve banks of their capital crunch, the RBI has allowed them to raise perpetual bonds and other hybrid capital securities to shore up their capital. If the new instruments find takers, it would help PSU banks, left with little headroom for raising equity. Threats: Over the course of the years the number of market player has significantly increased. This Intense competition could adversely affect the margins of the bank. So the there is threat of the stability of the system and threat from existing players. Other better Savings, investment option available. Failure of some weak banks has often threatened the stability of the system. The global banking industry weathered turbulent times in 2007 and 2008. the investment pattern with regard to foreign direct investment (FDI) and inflows from non-resident Indians remains resilient and FDI inflows into the country grew by an impressive 145% between fiscal 2006 and 2007 and by a respectable 46.6% between fiscal 2007 and 2008. Though the Indian banking system was de-coupled to a large extent but the threat posed by capital market slow down cannot be overlooked.other threats noted by us: 1. Threat of stability of the system: failure of some weak banks has often threatened the stability of the system. 2. Rise in inflation figures which would lead to increase in interest rates. 3. Increase in the number of foreign players would pose a threat to the PSB as well as the private players. STP OF BANKING INDUSTRY:

Segmenting the banking market

Marketing is one of the important function in any organisation. Marketing has become important function in banking industry because of the existence of intense competition, not only within the industry but also from development banks, finance companies, insurance companies, capital markets, etc. This has resulted in banks paying increasing attention to marketing techniques. Banking industry has unique nature compared to that of manufacturing or trading industry dealing with tangible products. Marketing of banking products is a field of study that is evolving rapidly. Banks deal with various types of customers e.g., individuals, group of people, corporate entities, etc. who have their likes and dislikes. No bank can afford to assess the need of each and every individual customer separately. It is nearly impossible for banks to market all these categories of customers on a one-to-one basis, particularly if they simply rely on predictable socio-economic data like age and income as the base for dividing customers into segments. To overcome this problem, banks adopt market segmentation strategy, which recognises the wisdom of specialising to suit the need of a segment of the market rather than trying to address the requirements of each and every customer separately. Market segmentation divides the whole market into groups of customers who have the requirement of similar kinds of products and services. The need for market segmentation arises as markets are becoming increasingly diverse and it is rare for mass marketing to be a profitable strategy. Market segmentation enables more accurate and effective communication of benefits in relation to needs. Market segmentation also helps to identify growth opportunities for the bank. Market of banking products can be segmented in a number of different ways. Market segmentation must have certain qualities that make it possible to specialise the marketing approaches. The segmentation must be measurable in terms of the criteria used for segmentation; accessible through the distribution system; and sizable in volume in order to generate the economy of operations. One of the rational ways of segmentation could be diving the banking market into retail and wholesale market and subdivide the market into various segments. Retail market can be segmented on the basis of demography, geography, social class and cultural values. Demographic segmentation divides the market in terms of the characteristics of populations such as age group, sex, size of family, level of income, occupation. For example, fixed income earner demands different product than the variable income earners. On the Other hand, geographic segmentation divides the market on the basis of different geographic units such as urban market, rural market, eastern market, western market, etc. There exist a major difference between bank customers of different social class. On the basis of social class, the market can be segmented into higher class, middle class and the lower class. Higher-class customers are generally complicated one, selective in choosing the products and they may be willing to take risk for earning higher returns. Such customers may also demand for customisation of products to fit their requirement. On the other hand, the lower class customers have limited sense of choice and are very much concerned on the risk inherent in the product. The market can also be segmented based on the cultural values of the customers. The segmentation may be on the basis of religion, nationality, region etc. A bank can gain competitive edge by programming different marketing strategies for customers of different segments. Wholesale market can be segmented on the basis of the classification of the companies. Such segmentation may be based on status of the company (e.g., private company, public company, government corporations, partnership firm, proprietorship firm); industry classification (e.g., manufacturing industry, trading industry, service industry); requirement of funds (e.g., company needing Rs. 20-50 million, Rs. 50-100 million, above Rs. 100 million); life-cycle of the company (e.g., start-up company, growing company, mature company); market served by the company (e.g., domestic market, export market); and profitability of the company. A bank can segment the wholesale market and target

the particular segments of customers. As discussed above, a bank segments its market into more or less homogeneous groups, in terms of their needs and expectations from the banking industry. Marketing strategy of a bank should involve dividing the market into major segments; targeting the segments to be catered by the bank; and developing the products and marketing programs to take care of the selected segments. Each segment of the market may demand different products and require different marketing mix to address the demand. The bank should, therefore, develop the profile of different market segments. Then the targeted market segments should be selected based on their attractiveness. Once the bank has identified the market segments that it might address, the next steps will be positioning of the product into the targeted market segment.

Targeting the banking market Banks are a business like any other; they have services to sell and they need customers to buy them. Seeking the consumer's dollar in the face of tough competition is the province of the marketing people, and the marketing of banks is as varied as the number and type of banks out there. Three basic questions form the basis of a bank's plan to attract--and keep--customers. What does our bank offer? Which customers do we seek? How will we reach them? Most banks' focus comes from their strategic plan, wherein they decide what they're going to be and who they're going to serve. In these days of electronic banking, most banks can, if they choose, offer their customers pretty much any service. The trick lies in taking a good look at the customers they'd like to serve. Niche marketing serves some banks very well. Bank 1st is strictly commercial, marketing to mid-market businesses and business owners, using direct calling efforts to reach them. A corollary to targeting customers by category is setting a goal for the number of them the bank wishes to garner. This market share can be very specific. Other market share goals are stated in terms of general growth and expansion, or the desire to reach out to as many customers across the board as possible. The means by which banks draw in their desired customers form the practical heart of their marketing plans. Marketing includes advertising, public relations and community involvement, all aimed not only at explaining what the bank can do, but putting a face on the bank--its image. Many banks rely upon their distinctive logo to make themselves instantly recognizable and to build a link between themselves and customers and potential customers. Banks offer shorter or longer versions of specific requirements and everybody needs them. The challenge of matching the bank with its target customers lies in the marketing. Positioning of a bank: With internet spreading its net across the markets, financial products are being invented and developed by companies read as independent innovators. The selling points for all such innovators mostly revolve around three common spokes Speed, Secure & Service. With multiplicity of products and innovators in the financial intermediary space, a relook on Banks positioning is undoubtedly warranted. Banks need not consider these upheavals as competitive threats to their existence. Instead, these independent innovations should strengthen Banks role in the market. This is where a Bank has to position as a giant and demonstrate success models to active innovators for their existence. On a wider perspective, Bank should assume role of a multinational hypermarket. What to sell, where to sell, how to sell and why to sell should form integral part of Banks alliance strategies with independent innovators. Rest of the marketing initiatives should be taken care of by independent innovators. The banks sight should be focused on expanding, nurturing and refining their customer base. Bank should invest on this front. More

achievement on this front, would be more gain through alliances with independent innovators. The more attractive clientele Bank has, the more would be their negotiating power to derive maximum value to the bottom line. In the alliance, Bank would be opening the market of its million customers. Through the alliance, Banks can offer an innovative product to its clientele, for reaping the benefits of technological growth with better experience. On intermediary role, Bank would be cherishing its role both functionally and financially. Drawing parallels with hyper market, promotional sales can be offered at Banking floors. Imagine customers receiving brochures on new offering on products in their shelves. It can be promotion of international payments during a period with lesser processing charges, mostly during off-peak days for load balancing, or when bank looks for float funds. Banks need not follow the alternate small players in producing such products, rather it should position as a custodian of customer trust. It should oil the infrastructure, refine the processes and practices of selling products. It should concentrate on improving turn around times and understanding the customer preferences. This should be linked back to all alliance strategies. Better understanding of the customer needs will certainly result in better alliance stories. Bank should ratify good products and advise customers to experience the product and service through them. Confronting the innovators, Banks need to project the trust of millions, project the satisfaction in customer faces while closing a service request, project achievements as a customer partner. Independent innovators may rarely have choice but to join the wagon. Deliver the best solution through the established level of service delivery and aim to achieve better customer experiences. The bottom line is - trust reposed by customers through the ages is a real power for every successful Bank. This power should drive the Banks to meet small transitional challenges by alternate players in the intermediary space. This power should pose survival challenges to average products and cultivate value propositions to innovative products, by scripting successful alliances, with customers at one hand and innovators on the other.

DEMAND AND CAPACITY MANAGEMENT:

The key to efficiency and fast customer service in the service industry is the correct and dynamic matching of demand and capacity. Given the seasonality and unpredictability of the various types of banking services and transactions, this process may be difficult but not insurmountable. The important step is to separate the bank's factory-like transactions which are more or less standardized, like check encashment, withdrawals, and check deposits, from the personalized ones like opening accounts, loan application, or marketing a new service. It should be recognized that the former constitute the bulk of banking transactions. Factory-like transactions are fairly predictable in terms of duration or cycle time, and occurrence. Their seasonality or peak-and-low periods during the day, week, and month can also easily be discerned from a careful study of past data. By matching the demand and capacity of its factory transactions, a bank can decongest its lobby or ATM booths, improve over-all customer satisfaction, and provide its staff with ample time and better composure to attend to the more personalized transactions.

Long-term capacity planning is a critical task of bank management. No plan or a wrong plan is planning for failure or bad service which leads to customer attrition. After the right the capacity is set and installed, whether tellers, verifiers, or ATMs, there is a need to dynamically match capacity to a changing demand pattern. In manufacturing, this short-term process is called production control. Both long and short term capacity matching has to be done carefully and adapted to the bank's particular environment. In many banks, capacity management is characterized by fire-fighting and gut-feel decision making. Tellers in a branch are added or subtracted from the front-line, according to across-the-board head office guidelines which are not consistent with local realities or demand pattern. Moreover, the branch manager may request head office for more personnel after overtime has become unmanageable or customer complaints due to long queues have mounted. Perhaps the most blatant flaw committed by many banks is basing its capacity plans on its total dollar value of business, e.g. deposit base, loans outstanding, or total assets. To compound the error, a productivity index is derived by dividing the dollar value by the headcount. The head office may stipulate a standard index like so much dollars in deposits per employee. Branch managers are enjoined to observe this index by downsizing or risk getting adverse performance appraisal. Often this index is used by head office to reject the branch's "unreasonable" request for additional manpower. Basing capacity on value will either lead to overcapacity and idle resources, or under-capacity and long customer queues. In banking, as in many other service establishments, what use capacity, consume resources, and drive costs are not the financial value of the transaction, but rather the volume of transactions. To process a $100 check deposit takes exactly the same teller or ATM time to process as a $200 one. A $100 passbook withdrawal or check encashment would take about the same time to transact as a $200. Even in the non-factory like transactions, there is no direct relationship between value of the service and the amount of bank resources utilized to deliver it. For instance, in general, a $2,000,000 loan will definitely take less than twice the time to process a $1,000,000 one. To correctly match capacity to demand, it is important therefore to derive the total volume of factory-like transactions and translate these to teller time or man hours, or machine hours for automated services. Thereafter, these hours can be translated to the number of tellers or ATMS required to meet the expected demand. A branch may get the average number of checks encashed, check deposits, cash withdrawals, cash deposits, utility payments on a daily, weekly, or monthly basis, whichever is appropriate for its capacity planning. It is tempting to use the number of customers accounts, particularly the number of active accounts, to compute for capacity. While this is more accurate than dollar value, and easier to use than transactions, it is not as accurate than the latter, since clients will have different volumes and types of transactions. Tellering, whether manual or automated, is transaction driven, not client or value driven. The best way to determine teller deployment is to use the number of transactions - regardless of number of clients or value of transactions - and translate these to transaction hours, and then to headcount. With the increasing power of computer technology at the disposal of banks, getting an accurate count of transactions should not be difficult.