Cross(ed) Selling Strategy limits

Unpleasant Cross Selling Techniques 

Last month, my friend’s sister, single and living in India, died suddenly. My friend, settled in US, flew down to perform the final rites and other rituals. He faced the issue of liquidity to pay for all expenses, as he had to rush in immediately. The deceased was an ex-staff of a reputed public sector bank. As I happened to know some of the officials of the PSB concerned, I requested for their help. I even assured that I can be counted as a surety for any amount that will be paid from the deposits of the deceased to her brother, the only legal heir to her estate. Fortunately, there was no need to seek approvals for any deviation on this score, as all deposits were in the joint names of the deceased and her brother, styled “either or survivor”. The lowest value of the several deposits held on that date was Rs. 14 lacs and my friend’s need for meeting the expenses was Rs.8 lacs. 

The branch extended all courtesies in helping him to encash Rs.8 lacs for the ritual expenses, but they also canvassed for a five year lock-in unit linked insurance product, carrying an annual premium of Rs.6 lacs. The product is a typical investment linked product, where the premium is to be paid for a minimum period of 5 years and the promised returns are after 10 years. After a week, when my friend visited the branch again, he was requested to improve the annual premium to Rs.20 lacs; however, they could not succeed this time, as there was no expectation or a favour from my friend's side.

Though my friend did not utter a word on the product canvased on him, I felt unhappy as to the time of marketing a bancassurance product. The legal heir approached for withdrawal of money to meet the funeral and related ritual expenses of the deceased. And no favour was done to him, since he was the rightful second owner of the deposit, in the style "E or S".  Will any one make use of the opportunity to market a product for the balance amount lying in the account, after meeting his needs? Is it the right occasion? Is achieving targets, by any means, the only goal in life? Apart from the ethical issues involved, I would also like to raise a few questions on the due diligence performed in canvassing a unit linked insurance product, with a hefty premium, to an unknown individual, within two hours of having met him.

1. Any investment linked product should be done after understanding the customer's preferences and capabilities to achieve them, with particular reference to his risk profile.

2. The product should be suitable to him, with assurances, not at the time of selling but at the time, when it matures. Empathy is needed. The product should be show cased and not solicited.

3. Rs.6 lacs, the first year premium, is paid out of the balance in the deposit, that was invested from the funds of the deceased.  How the marketing executive was convinced, that the future premium of the minimum five year lock-in product will be met by the applicant cum beneficiary regularly.

The above episode reminds me that this may be just one of the hundreds of ‘seize-in’ opportunities that a banker may get, while handling customer requests every day. Is a counter obligation created on the customer, who is in need, each time? As my friend was favoured to encash a deposit, which was rightfully his, so were thousands of genuine bank customers, who are beneficiaries of bank loans each day. Whether they become easy targets for ‘bancassurance products’? Should such sales be termed 'opportunity-sell' or 'mi-sell'? And there may be many more unanswered/uneasy questions in 'banca' selling, who knows?

 V. Viswanathan

7th January 2022