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BW Businessworld

The Art Of Choosing The Best

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Albert Einstein said that whoever undertakes to set himself up as a judge of truth and knowledge is shipwrecked by the laughter of the gods. Not wanting to take on that awesome responsibility, and to help decide the awards, we organised a jury of experts with deep knowledge of finance and banking in the Indian market. Being judged by a jury of their peers would also give the banks greater comfort in the credibility of the process.

The logical place to look for members of a jury was the fraternity itself. To begin with, we wanted a couple of ex-bankers who held the topmost jobs at their banks. We were fortunate to get two of the best. We also wanted a member who had a similar wealth of experience, but who, while still active, was not part of the sample being considered for the awards. Again, we were fortunate to get one of the best-known names, and her participation in the jury gave it an enriching and unique dimension.

Finally, we wanted someone who was a part of the financial services industry, and in a sense was competition to banks in the range and type of services his company provided. We got an entrepreneur who started his own firm nearly a decade ago, which has since become one of the largest financial services firms in the country.

The jury was given the task of not only deciding the winners in each category, but also of questioning and validating the assessment methodology developed jointly by Businessworld and PricewaterhouseCoopers. The jury had several probing questions, and made some recommendations and suggestions to take on board for the 2010 edition of this survey.

Through the course of the discussions, whenever the bank that jury members had been associated with came up, the specific jury member abstained from the discussion to ensure that there was not even an appearance of a conflict of interest. For instance, State Bank of India was nominated in several categories, and in each case, A.K. Purwar, former chairman of SBI, did not participate when the bank was discussed, though he retired from SBI years ago.

Methodology And Approach
The jury made five important points. First, it was suggested that a longer time frame — five years rather than three — be considered as the assessment period. As bankers, jury members felt that a five-year cycle allowed for enough ups and downs to arrive at a more refined assessment. Second, it was suggested that greater weight be given to the sustainability and risk parameters, and was taken into account in jury deliberations. Third, it was pointed out that there was no measure of customer experience; we had planned a customer service survey conducted by an independent agency, but logistics and time pressures intervened. Next year's edition of the Best Banks Survey will incorporate such a study.

Fourth, the jury pointed out that qualitative factors — management quality, human relations management, incentive structures, among others — were not taken into account. It was recommended that the next edition of the survey would incorporate some of these.

The jury also suggested that the criteria for the most tech-savvy bank be improved upon by going beyond the survey and capturing the customer experience of service quality and security. Sample testing and focus groups were suggested as means, and incorporating a graded range of responses rather than binomial (yes or no) ones (for more on methodology see page 74). Following are the jury's deliberations for each of the awards.

Best Bank - Large Banks: After discussing the individual banks in detail, the jury did a first-cut by reducing the number of banks for consideration to three out of the top five shortlisted. Further discussion ensued, and the jury arrived at the final ranking. HDFC Bank chose its customers, rather than service anyone who wanted to be, according to jury members. The final choice of State Bank of India was made because the bank had performed very well under difficult conditions and was a universal bank.

Best Bank - Mid-Size Banks: The contest in this instance was close. The ultimate winner, Corporation Bank, scored high on a number of parameters. At the same time, not having raised capital in the recent past as some of the others might have, the bank's overall income might have suffered.

Best Bank - Small Banks: From the shortlist of small banks, the jury pointed out that Barclays Bank had not completed three full years of operations. Then, they further pruned the list down to a final list of three nominations.

Fastest Growing Bank - Large Banks: The choice of Axis Bank was unanimous since it was "the overarching champion with six gold medals" — having been ranked first on six out of seven parameters. Bank of India's results in the last two quarters had not been very good, according to the jury; State Bank of India came out ahead of HDFC Bank since its numbers were high despite its extraordinarily large base.

Fastest Growing Bank - Mid-Size Banks: In coming to their decision, the jury felt that ING Bank had perception and image issues stemming from some recent events related to management changes. Federal Bank, it was felt, was very state-centric rather than national. Corporation Bank had shown sound results, and the quality of its growth was considered good.

Fastest Growing Bank - Small Banks: Once again, Barclays Bank was taken out of the reckoning because it had not completed three full years as noted above. Besides, the jury observed, growth had been achieved in a relatively small base. Reputational issues stemming from recent newspaper reports were also a factor in the discussions.

Banker Of The Year: The jury added a few names to the list compiled by the BW-PwC team. They suggested that leaving out people who had won similar awards from other publications and agencies was not justifiable.

Lifetime Achievement Award: Three names were considered for this award, which was finally given to M. Narasimham.

Most Socially Responsive Bank: Given the government's emphasis on financial inclusion, this award was created to reflect performance on this aspect. The shortlist, based on the analysis of bank balance sheets was, considered by the jury, and State Bank of India was picked as the winner. The jury suggested that a more qualitative analysis be included in the next edition.

No award decisions are completely satisfying, and there is always scope for improving the basis on which they are made. David Lloyd George, British politician and former UK prime minister, said that one should not be afraid to take a big step; you cannot cross a chasm in two jumps. Next year, we will get better.