SUMMER INTERSHIP PROJECT REPORT

A STUDY ON CUSTOMER LOYALTY AND RETENTION STRATEGIES IN

RETAIL BANKING SPECIAL REFERENCE TO KOTAK BANK

Submitted to NARANLALA SCHOOL OF INDUSTRIAL

MANAGEMENT AND COMPUTER SCIENCE

Prepared by :

Singh Misha Manoj

ENROLLMENT NO : 227990592063

MBA (SEMESTER-3)

Month & Year

September 2023
 Content

• Industry overview
• Company overview
• Literature review
• Research methodology
• Data analysis
• Statistical test
• Finding
• Suggestion
• Conclusion

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  INDUSTRY OVERVIEW
 What is the banking industry?
The banking industry is made up of networks of financial entities called banks that help people save and use their
money. Bank clients can open accounts for a variety of purposes, including saving or investing their money. By
providing people, families, and organizations with access to resources for transactions and investments, the banking
industry supports the economy. One way the banking sector does this is by planning and allocating loans for
applicants that they can use for things like acquiring real estate, launching a business, or paying for college.

 What exactly is the banking sector?

The banking sector consists of networks of financial entities called banks that aid in the storage and usage of
people's money. Banks give customers the option to open accounts for a variety of uses, including saving or
investing their money. The banking sector contributes to the economy by providing resources that can be used for
transactions and investments by people, families, and organizations. One way the banking sector does this is by
planning and allocating loans for applicants that they can use for things like acquiring real estate, launching a
business, or paying for college.

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 What do experts in the banking sector do?
The banking sector employees a wide variety of experts, each of whom has a specific role to play in
managing clients' finances. For instance, bank tellers can assist customers with account opening and closing,
deposits and withdrawals, and setting up regular payments for other services. A mortgage consultant is
another category of baking expert who may assist people and families in obtaining mortgages so they can buy
real estate. Similar to this, a bank's credit analyst can evaluate a client's credit and provide suggestions
regarding whether they might be a good candidate for a loan.

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 Banks several types :

Bank of
investments

Bank for Bank for

small
businesses industry

Banks

Centralized Regional
bank bank

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 Bank for Industry
An organization that provides financial services to the general public's citizens and businesses is a commercial bank.
Commercial banks frequently have physical locations where tellers and advisors work to assist customers with their
banking needs. This can involve making deposits or withdrawals, setting up loans, and establishing asset protection. A
commercial bank can help clients with obtaining business loans that they can utilize to fuel their activities.

 Bank of Investments
The primary clientele of an investment bank are large enterprises, firms, and institutions that need assistance with
investments.. Planning and approving mergers and acquisitions, issuing securities, and helping businesses finance
significant projects are all tasks that investment banks may help with. Many investment banks have highly qualified
financial analysts on staff who may advise and suggest potential investments that clients might find profitable.

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 Bank for small businesses
By offering financial services to clients in the general public, a retail bank performs similarly to a commercial bank.
However, a retail bank normally does not accept businesses as clients and solely assists individuals with their financial
needs. Retail banks can help individual customers manage their finances, access credit choices, and make secure
deposits. A retail bank can help customers open new checking and savings accounts, arrange personal loans, and create
mortgages to enable them to buy real estate.

 Regional Bank
Community banks often exist to assist customers in their immediate service region. This indicates that the majority of
community banks solely serve residents of their local areas, which frequently makes them smaller than other types of
banks. Community banks can tailor the services they provide and typically forge enduring bonds with the consumers
they attract by focusing their services on community members.

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 Centralized Bank
In a financial system, all banks rely on the central bank as their main source of liquid resources. The rest of the
banking activities in most nations are supported by some kind of central bank. The Federal Reserve is the name of the
government-run bank in the US. The Federal Reserve performs a variety of duties, including buying and selling
securities, deciding how much money banks can lend, setting interest rates, and assisting banks with borrowing.

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  COMPANY OVERVIEW
 Introduction of Kotak Mahindra Bank
The Kotak Mahindra group was one of India’s most well-known financial conglomerates when it was founded in
1985. The Reserve Bank of India (RBI) granted Kotak Mahindra Finance Ltd., the group’s flagship entity, the
authorization to conduct banking activities in February 2003. Since Kotak Mahindra financial Ltd. is the first non-
banking financial firm in India to transform itself into a bank as Kotak Mahindra Banking Ltd., this permission made
banking history. The bank is currently one of India’s most admired financial institutions and one of those with the
quickest growth rates. As it spreads throughout the entire nation of India, not just in the main cities but also in Tier
II cities and rural areas, it is redefining the reach and power of banking. It currently engages in commercial banking,
stock broking, mutual funds, and life insurance. It satisfies the financial needs of both individuals and companies.
The bank has operations abroad thanks to its subsidiaries, which are devoted to assisting foreigners who want to
invest in India and have offices in London, New York, Dubai, Mauritius, San Francisco, and Singapore with a loan of
30 lakh rupees from family and friends, Uday Kotak established Kotak Capital Management Finance in 1985 as an
investment and financial services firm. After Anand Mahindra and his father Harish Mahindra invested Rs. 1 lakh in
it in 1986, the company was renamed Kotak Mahindra Finance. The company's initial business activities included
bill discounting, lease transactions, and hire buy agreements.

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 History
Kotak Capital Management Finance was established by Uday Kotak in 1985 as an investment and financial
services firm with a loan of Rs. 30 lakhs from friends and family. After Anand Mahindra and his father Harish
Mahindra invested Rs. 1 lakh in the business, Kotak Mahindra Finance was given the new name. Initially, the
business was involved in lease and hire-purchase transactions as well as bill discounting. The organization began
offering investment banking and car financing services in the early 1990s and grew its global reach. A 60:40 joint
venture between Ford Credit International and Kotak Mahindra Finance resulted in the establishment of the auto
financing business Kotak Mahindra Primus in 1996. The same year, Kotak Mahindra Finance split out its
investment banking section to become Kotak Mahindra Capital, a new business that was founded in collaboration
with Goldman Sachs. Kotak Mahindra Finance launched Kotak Mahindra AMC, its mutual fund division, in
1998. OM Kotak Mahindra Life Insurance was founded in 2001 as a 74:26 joint venture between Old Mutual and
Kotak Mahindra Finance. The Reserve Bank of India granted Kotak Mahindra Finance a banking license in
February 2003. As a result, it was India's first non-banking financing company to undergo bank conversion. After
that, Kotak Mahindra Finance became Kotak Mahindra Bank. Uday Kotak owned 56% of the company at the
time, while Anand Mahindra owned 5%.

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 Vision
The Global Indian Financial Services Brand Our customers would gain from dealing with a global Indian brand that
best understands their needs and provides tailored practical solutions across several platforms. We are a renowned
Indian financial services organization. While our understanding of our customers will be uniquely Indian, our
technologies and best practices are compared to those of other countries. We do more than merely store our clients'
savings with us. We, the company, act as the customers' single point of access to all financial services. The Indian
Financial Services Brand Internationally Working with an international Indian brand that better understands their
demands and provides tailored practical solutions across several platforms will benefit our customers. We are a
renowned Indian financial services organization. Our technologies and best practices are compared to international
standards even if our understanding of our customers will be uniquely Indian. We provide more than just a safe haven
for our customers' savings. All financial services offered to consumers are accessible through us, the business, as a
single point of access. The Most Preferred Employees in Financial Services Our culture of empowerment and spirit of
enterprise attracts bright minds with an entrepreneurial spirit to join us and build long-term careers with us. Our staff
members have a perspective that is both universal and unique because they work for a locally created, professionally
operated company that has benefited from collaborations with world leaders. The Most Trusted Financial Services
Company All of our stakeholders now share a culture of trust that we've fostered.

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Maintaining stringent compliance and corporate governance standards is necessary for building confidence. Value
Creation Value creation, not just size, will be our company's main incentive. Most Popular Financial Services
Employer Our culture of empowerment and spirit of enterprise attracts bright minds with an entrepreneurial spirit
to join us and build long-term careers with us. Our staff members have a perspective that is both universal and
unique because they work for a locally created, professionally operated company that has benefited from
collaborations with world leaders. The Most Reliable Provider of Financial Services All of our stakeholders now
share a culture of trust that we've fostered. Maintaining stringent compliance and corporate governance standards is
necessary for building confidence. Value Development Value creation, not just size, will be our company's main
incentive.

 Values
Our five fundamental beliefs have guided us on our journey to become the finest in the industry over the years,
acting as a compass for us. We continue to delight our clients and support the professional development of our
workers by living up to these ideals every single day.
HONESTY AND APPROACHABILITY
We are uncomplicated, straightforward, approachable, and give consistently excellent results. Our leadership ethos
also displays how approachable we are. When you enter our doors, you'll discover a welcoming, humanistic
environment where people interact well wisth one another and with clients.

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BUSINESS-LIKE APPROACH
We have a tendency of recognizing possibilities, acting on them, and developing ventures, goods, and services with
recognizable value for our clients, stakeholders, and society at large. We operate within predetermined parameters
while implementing fresh concepts or initiatives, demonstrating a high degree of procedural discipline.

INTEGRITY AND TRANSPARENCY

We promote an ethical and open workplace. a place where each person's dignity is protected and their contributions
are acknowledged. We provide each of our employees with an equal opportunity to succeed and develop.

ETHICAL AND GOVERNANCE-BASED

We support conducting business ethically. We are dedicated to making sure that we always follow laws and
operational rules while operating within the established process and company boundaries.

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 Organizational Structure of Kotak Bank

UDAY KOTAK
MD and CEO

DIPAK GUPTA
Joint MD

KVS MANIAN SHANTI EKAMBARAM

JAIMIN BHATT
Group president & Group President & Whole -
Group President & CFO
Whole-Time Director Time Director

VIRAT PAUL SHEKHAR

DIWANJI OISHARYA PATISOSH
PARAMBI BHANDARI
DAS S.RAMESH KASHYAP
Group Group President
President Group MD and CEO President and
President Global
Prsident and , Investment Head
and Head and Risk Transaction
CEO Private Banking Wholesale
Consumer Officer Banking
Banking Banking
Banking (CRO)

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 Strength
The investment banking and stock brokerage franchises of KMB are some of the best in India, despite losing market
share during the previous four years.Almost the entire top management team of KBM has worked for the bank for
more than ten years, making it one of the most stable top management teams.KMB is a global leader in auto and
commercial vehicle financing with outstanding evaluation capabilities in these fields (as demonstrated by its low
NPAs).Power, infrastructure, aviation, and textile are some of the pressured industries that KMB has very little
exposure to.

 Weakness
In terms of corporate banking, KMB is underrepresented. However, corporate banking is becoming the company's
primary area of expertise.When it comes to liabilities, KMB largely relies on the interbank market.

 Opportunity
By boosting its CASA deposit, KMB can fortify its liability franchise.KMB may cross-sell its products by leveraging
its footprint across asset management, capital markets, and insurance.

 Threats
If the leading business is unable to maintain its momentum, further weakening in non-leading businesses could have
an impact on KMB's earnings growth.

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  Functional department of Kotak Mahindra Bank
As is customary for a sizable financial organization, Kotak Mahindra Bank functions with a number of
functional departments. Some of the important functional departments you can find at a bank like Kotak
Mahindra are as follows, but these departments may have changed or evolved since then:
Corporate
financial

Technology Investment
and IT banking

Operations
Human
Resources
and
Technology

Risk
Legal
management

Finance and
Accounting
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Individual customers are served by the retail banking division, which also offers services including credit cards,
personal loans, savings accounts, and other retail financial products.

Corporate financial:
This division manages the bank's interactions with corporate customers and offers specialized financial services made
to satisfy the requirements of small and large organizations.

Investment banking:
This division handles corporate client advising services, mergers and acquisitions, underwriting services, and capital
raising activities.

Operations and Technology:

To maintain efficiency and security, this division is in charge of the bank's technology foundation, online banking
services, and regular operational procedures.

Risk management:
This department is in charge of identifying and reducing several risks that the bank may encounter, including credit
risk, market risk, operational risk, and compliance risk.

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Finance and Accounting:
The bank's financial planning, accounting, and reporting operations are managed by the finance department.

Legal:
Handles all legal issues pertaining to the bank, such as contracts, agreements, and lawsuits.

Human Resources:
This division oversees hiring, employee growth and development, performance reviews, and other HR-related duties.

Technology and IT:

The bank's IT infrastructure, software systems, and projects for digital banking are managed by the
technology department.

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 Details about major competitors and market leaders
Major competitors:

HDFC BANK ICICI BANK

State Bank of India

Axis Bank (SBI)

YES BANK
INDUSIND BANK

PUNJAB
NATIONAL BANK

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HDFC BANK :
In terms of size and proximity to Kotak Mahindra Bank in the Indian private banking sector, HDFC Bank is one of the
country's biggest institutions.

ICICI BANK :
ICICI Bank is another big private sector bank in India that competes fiercely with Kotak Mahindra Bank by providing
a broad range of financial goods and services.

Axis Bank :
Kotak Mahindra Bank competes with Axis Bank in a number of banking sectors and is one of India's leading private
sector banks. It offers a variety of banking services, such as personal and business banking.

State Bank of India (SBI) :

As the largest public sector bank in India, SBI competes fiercely with Kotak Mahindra Bank and other private sector
institutions. SBI is well-known throughout the nation and provides a variety of financial products.

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YES BANK :
YES Bank is a privately held bank that had been expanding quickly before running into some financial difficulties
recently. Offering a variety of financial services puts it in competition with other private sector banks.

INDUSIND BANK :
Private sector bank IndusInd Bank is well-known for its emphasis on cutting-edge financial solutions and ability to
serve a range of clientele.

PUNJAB NATIONAL BANK :

One of India's oldest public sector banks is called Punjab National Bank (PNB). In a variety of banking segments, it
contends with private sector banks.

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 Market leader

One of India's top private sector banks was Kotak Mahindra Bank. It is important to confirm this information with
more recent sources because market dynamics and leadership positions may have changed since then. The following
information about Kotak Mahindra Bank:
Kotak Mahindra Bank Limited is its name.
Overview: Full-service private sector bank Kotak Mahindra Bank has its headquarters in Mumbai, India. It provides
retail and business customers with a vast array of banking and financial goods and services. The bank has a large
presence in the financial services industry and operates through a network of branches and ATMs across India. Market
Position: According to market capitalization, asset size, and general company performance as of my most recent report,
Kotak Mahindra Bank was one of India's top private sector banks. Over the years, it has been continuously developing
and growing its business.

Leadership:
Kotak Mahindra Bank was founded by Uday Kotak, who also serves as its managing director and chief executive
officer. He was essential in starting the bank and has contributed greatly to its development and success. A well-known
name in the Indian banking and financial services sectors is Uday Kotak.

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Dipak Gupta (Joint Managing Director): Dipak Gupta is a prominent figure in Kotak Mahindra Bank and has a
lengthy history there. He has made a substantial contribution to the strategic goals and growth of the bank.
These are a few of Kotak Mahindra Bank's key executives. The bank's excellent management team, knowledgeable
employees, and client-focused philosophy all contributed to its success.
 Current industry trends, challenge and opportunities:
Current banking industry trends :
Despite being a constant in society, the banking sector goes through adjustments when new trends emerge. Online
banking, which enables account holders to access their accounts and manage their money from home using a
computer, is one of the most well-liked current trends in the banking sector. The rise of mobile banking, which
gives consumers access to their bank accounts using mobile devices, is a trend that is strongly tied to this one.
These two developments in technology assist the banking sector streamline its operations.
The expansion of investment banking is a further well-known trend in the banking sector. Investment banking is a
service where bankers advise clients on potential investments they might like to make. Investment banking is
becoming more and more popular as a result of advancements in artificial intelligence and automated banking
procedures. Due to the fact that many investment banking chores can be accomplished automatically, many people
use investment banking to inform their investment decisions while also lowering the expense of
professional consultation.

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Current banking industry challenges :

Growing Competition Cultural Transition Complying with

regulations

Increased
Modifications to Retention of clients
Business Models Expectations

Old-fashioned
Persistent Innovation
Mobile Experiences

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Growing Competition
FinTech’s pose is a serious danger because they frequently target some of the most lucrative financial services
sectors. According to Goldman Sachs, these firms will drain upwards of $4.7 trillion in yearly income from
traditional financial services corporations. According to Goldman Sachs, startups will displace financial services
firms' yearly revenue by up to 4.7 trillion US dollars.

A Cultural Transition
Technology has permeated every aspect of our culture, including banking. From wearables powered by artificial
intelligence (AI) that track the wearer's health to smart thermostats that let you change the temperature of your
home from a computer or smartphone, technology is pervasive.

Complying with regulations

One of the main challenges the banking industry is currently facing is regulatory compliance due to the sharp
increase in regulatory fees relative to earnings and credit losses since the financial crisis of 2008. With Basel's risk-
weighted capital requirements, the Dodd-Frank Act, the Financial Account Standards Board's Current Expected
Credit Loss (CECL), and the Allowance for Loan and Lease Losses (ALLL), banks and credit unions are subject to
an expanding number of restrictions. The ability to correlate data from many sources is frequently necessary for
compliance, which can place a heavy demand on resources.

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Modifications to Business Models
A variety of problems affecting the banking sector, such as the price of compliance management, are forcing
financial organizations to change the way they conduct business. The rising cost of capital, ongoing low interest
rates, diminishing return on equity, and declining proprietary trading are putting pressure on traditional banking
profit margins. Shareholder expectations are unaffected by this.

Increased Expectations
The modern customer demands a high level of personalization and convenience from their banking experience
because they are smarter, savvier, and more educated than ever before. These elevated expectations are significantly
influenced by shifting customer demographics: Each new generation of banking customers has a greater natural
awareness of technology and, as a result, a higher expectation of digitized experiences.

Persistent Innovation
One needs intelligence, adaptability, solid client relationships, and continual innovation to succeed in business. By
contrasting their operations with other businesses' best practices, banks and credit unions can maintain their
competitiveness. However, benchmarking by itself only serves to keep businesses competitive; it infrequently spurs
innovation. Businesses must benchmark to survive, but innovate to thrive, according to the cliche; innovation is a
crucial differentiator that distinguishes the wheat from the chaff.

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Old-fashioned Mobile Experiences

Every bank and credit union today has its own customized mobile app, but just because a business has a mobile
banking strategy doesn't mean that it is maximizing its use. A bank's mobile experience must be speedy, easy to
use, fully featured (think live chat, voice-enabled digital assistance, and similar), secure, and regularly updated in
order to retain customer happiness. Some banks have even started to reimagine what a banking app might be by
introducing mobile payment functions, allowing customers to use their smartphones as secure digital wallets and
send money instantly to family and friends.

Current banking industry opportunities :

Digital change Fintech Collaboration

Cybersecurity and
Data analytics and AI
Fraud Prevention

Sustainable and
ethical banking
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Digital change:

With a greater emphasis on online and mobile banking services, the banking sector has been undergoing substantial
digital change. In order to enhance client experience, provide individualized services, and optimize internal
operations, banks are investing in technology.

Fintech Collaboration:

To take advantage of these businesses' cutting-edge technologies and services, many banks have formed alliances
with fintech firms. These partnerships aided banks in streamlining processes, improving customer experience, and
expanding their product offerings.

Data analytics and AI:

To better understand consumer behavior, assess risk, and streamline numerous processes, banks are investing in data
analytics and artificial intelligence. AI was also being utilized to create customer service chatbots and virtual
assistants.

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Cybersecurity and Fraud Prevention:

As the banking sector relies more and more on digital channels, cybersecurity concerns have increased. To
safeguard the information and assets of their customers, banks can take advantage of the chance to invest in strong
security measures, fraud detection technologies, and staff training.

Sustainable and ethical banking:

There is a rising desire for banking methods that are both socially and environmentally conscious. By creating green
financing choices, incorporating environmental, social, and governance (ESG) principles into their business
practices, and establishing sustainable investment options, banks can take advantage of this opportunity.

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  Literature Review
(Uwamariya & Justine, 2021) Customer Retention strategies and performance of commercial banks in
Rwanda A case study of Equity Bank RWANDA Public Limited Company (PLC) : With Equity Bank
Rwanda PLC as the case study, the primary goal of the research was to analyze the impact of consumer
retention tactics on the performance of commercial banks in Rwanda. The study specifically set out to
determine the performance level of Equity Bank Rwanda PLC, examine the impact of consumer retention
strategies on Equity Bank Rwanda PLC performance, and establish a link between consumer retention
strategies and Equity Bank Rwanda PLC performance. Three hypotheses were used in the study: the
relationship commitment model, the theory of customer bonding, and the disconfirmation of consumer
happiness. The research design for the study was a descriptive case study. 134 employees made up the
study's target population. The sample size, n=100, was determined using Slovin's formula.
Based on the analyst's assessment that the chosen sample matched the study's aims, the purposeful sampling
technique was employed. Using survey questionnaires, the researcher gathered primary data from the
respondents. Secondary data for the study was gathered from peer-reviewed papers and open access libraries.
Accurately completed questionnaires were assigned.

(Jill & Joffreswait, 2008) The effects of brand credibility on customer loyalty : Customer churn is a
problem that is getting worse all the time in the relational services industry (like retail banking and
telecommunications), where the profitability of business models ultimately depends on building long-term
connections with clients.

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Businesses in this industry have a propensity to see customer happiness and service excellence as the two
most important instruments for boosting client retention. The current study looks on the crucial extra
function of the brand in controlling the loss of current relational service users. We particularly suggest that
the credibility of the brand underlying the function that the brand might play in this process based on
information economics.
This study clarifies how the standard tools of customer relationship management, such as satisfaction and
service quality, relate to brand credibility and increases knowledge of the brand's important role in
maintaining long-term customer relationships. According to samples of customers from retail banks and long
distance phone companies, brand credibility plays a protective role by significantly increasing word-of-
mouth and lowering customer switching behaviors. These relationships are mediated by customer
satisfaction and loyalty. The study's implications for theory and practice are examined.

(Asuncion, Josefa & Agustin, 2004) A model of customer loyalty in the retail banking market : This
paper proposes a structural equations model based on empirical research conducted in the retail banking
market, allowing us to draw the conclusions that perceived quality is a result of satisfaction and that both
satisfaction and personal switching costs are antecedents directly leading to customer loyalty, with the former
exerting the greatest influence. The study also demonstrates that there is no moderating effect of the level of
detail in the bank selection process on the causal linkages between customer satisfaction/switching
costs and loyalty

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(Barbara & Magdalini, 2006) The antecedents of consumer loyalty in retail banking : This essay is
centered on a study intended to look at customer loyalty in retail banking. According to the research, loyalty
is the result of a cognitive process rather than an emotional one. Perceived value, service quality, service
qualities, contentment, image, and trust were discovered to be the primary antecedents of bank loyalty. These
categories are interconnected and form a network of loyalty antecedents.

(Rizal & Francis,2002) Customer retention management : A reflection of theory and practice :
Customer retention is becoming more and more recognized as a critical managerial concern, particularly in
the setting of a saturated market or slower increase of new customer numbers. It has also been identified as a
crucial relationship marketing goal, particularly because to its potential to produce superior relationship
economics, i.e., the fact that keeping existing customers costs less than acquiring new ones. This essay
describes a case study inquiry of whether or not activities in four businesses correspond to a theoretical
viewpoint on client retention methods. The underlying premise is that whereas generalized theories suggest
universal application, they frequently fail to account for the unique influence of contextualized company
situations on successful customer retention techniques. The paper suggests that when creating and putting
into practice customer retention strategies, both theoreticians and managers should take "business context"
into consideration.

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  Research Methodology
Problem statement

Customer loyalty and retention are crucial aspects in the retail banking industry. A study on these topics with
special reference to Kotak Bank would involve investigating various factors that influence customer loyalty and
retention. It may include analyzing customer satisfaction levels, identifying key drivers of loyalty, studying the
effectiveness of Kotak Bank's existing retention strategies, and exploring ways to improve customer engagement
and long-term relationships with the bank's customers. The study could also involve conducting surveys,
analyzing data, and proposing tailored strategies to enhance customer loyalty and retention for Kotak Bank.

Scope of the study

The scope of the research on customer loyalty and retention strategy in retail banking with a focus on Kotak Bank
would include an examination of elements that influence customer loyalty, such as customer happiness, service
quality, and brand perception. It will also look into Kotak Bank's retention strategies, such as tailored services,
reward programs, and customer relationship management procedures. To acquire insights into the effectiveness of
Kotak Bank's tactics and their effects on customer loyalty and retention, the study could include a review of
existing literature, data analysis, surveys, and interviews with customers and bank representatives.

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Signification of the study

The study on customer loyalty and retention strategy in retail banking, with a focus on Kotak Bank, is important
for analyzing and enhancing customer satisfaction and loyalty. The study can assist Kotak Bank develop
successful retention strategies, improve customer experience, and eventually raise customer retention rates by
investigating aspects that drive customer loyalty. This study may result in stronger client connections, increased
brand loyalty, and a competitive edge in the retail banking market.

Objective

1.To examine whether there is any relationship between customer loyalty and customer retention.
2 .To examine the factors affecting the loyalty of the customers.
3. Analyze the effectiveness of kotak bank's existing customer retention strategies.

Hypothesis

H0: Between groups, there is no statistically significant difference.

H1: There is a statisticant difference between groups.

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Data collection tools / Description of data analysis techniques

Tools and techniques of analysis

Tools: Microsoft Excel, SPSS
Statistical Techniques: Research have applied three test to my data and test are Descriptive test, correlation and
regression test.
Limitations of the study

1. Due to lack of time, respondent may not give Quality response.

2. Respondents may not fill the response for just filling up the Questionarie and they may have some assumption
which may turn into prejudiced responses.

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 Data analysis and Interpretation
age
3% 4%
5% 1
2
3
4
23% 5

65%

Sr no. Particulars No. of respondents Percentage

1 18 to 25 98 65%
2 26 to 30 34 23%
3 31 to 35 8 5%
4 36 to 40 4 3%
5 40 above 6 4%

Interpretation: For this survey the majority of respondents i.e., 65% belong to the age group of 18 to 25.

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 occupation
5%
9% 1
2
3
4
29% 53% 5

4%

Sr no. Particulars No. of respondents Percentage

1 Student 80 53%
2 Homemaker 6 4%
3 Employee 44 29%
4 Businessman 13 9%
5 Others 7 5%

Interpretation: For this survey the majority of respondents i.e., 53% are Students.

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 Gender

1
2
3
40%
60%

Sr no. Particulars No. of respondents Percentage

1 Male 90 60%
2 Female 60 40%
3 Prefer not to say 0 0%

Interpretation: For this survey the majority of respondents i.e., 60% are Male.

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 Educational qualification

10% 1
4% 2
3
1%
4
5
28% 57%

Sr no. Particulars No. of respondents Percentage

1 Bachelor 86 57%
2 Masters 42 28%
3 Doctorate 1 1%
4 Professional Degree 6 4%
5 Other 15 10%

Interpretation: For this survey the majority of respondents i.e., 57% are with bachelor’s degree.

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 Marital Status

1
26%
2

74%

Sr no. Particulars No. of respondents Percentage

1 Married 39 26%
2 Unmarried 111 74%

Interpretation: For this survey the majority of respondents i.e., 74% are Unmarried.

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 Monthly Income:

1
2
30% 3
4
49%

21%

Sr no. Particulars No. of respondents Percentage

1 Less than 15000 73 49%
2 15000 to 25000 32 21%
3 25000 to 35000 45 30%
4 Above 35000 0 0%

Interpretation: For this survey the majority of respondents i.e., 49% belong to the income of less than 15000.

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 How long have you been customer
of Kotak bank?
2%
1
9% 2
3
4
22%

67%

Sr no. Particulars No. of respondents Percentage

1 Less than 1 year 100 67%
2 2 to 5 year 33 22%
3 5 to 10 year 14 9%
4 10 to above 3 2%

Interpretation: For this survey the majority of respondents i.e., 67% belong to the less than 1 year member.

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 How often do you use Kotak
bank's service?
1
21% 2
31% 3
4

27%
21%

Sr no. Particulars No. of respondents Percentage

1 Daily 32 21%
2 Weekly 40 27%
3 Monthly 31 21%
4 Rarely 47 31%

Interpretation: For this survey the majority of respondents i.e., 47% use Kotak bank’s services rarely.

43
 Have you ever considered of
switching to another bank?

1
20% 2
3
43%

37%

Sr no. Particulars No. of respondents Percentage

1 Yes 64 43%
2 No 56 37%
3 Maybe 30 20%

Interpretation: For this survey the majority of respondents i.e., 43% users think to switch another bank.

44
 What factor influences your de-
cision to stay with Kotak bank?
5
0

4 16

3 24

2 20

1 37
0 5 10 15 20 25 30 35 40

What factor influences your decision to stay with Kotak bank?

Sr no. Particulars No. of respondents Percentage

1 Supporting 37 38%
2 Time Management 20 21%
3 Online Service 24 24%
4 Other 16 17%

Interpretation: For this survey the majority of respondents i.e., 38% users influences by Supporting service to
stay with Kotak bank.

45
 Do you feel that Kotak bank
values your loyalty as a cus-
tomer?

11% 1
2
7%
3

82%

Sr no. Particulars No. of respondents Percentage

1 Yes 123 82%
2 No 11 7%
3 Maybe 16 11%

Interpretation: For this survey the majority of respondents i.e., 82% respondents feels that Kotak bank values
your loyalty as a customer.

46
 How do you rate the customer
service provided by Kotak bank?
6% 1% 1
2
3
15% 4
5

17% 61%

Sr no. Particulars No. of respondents Percentage

1 Excellent 91 61%
2 Very good 26 17%
3 Good 23 15%
4 Fair 9 6%
5 Poor 1 1%

Interpretation: For this survey the majority of respondents i.e., 61% are respondents rate Excellent service
provided by Kotak bank.

47
 5
0

4 12

3 28

2 15

1 49

0 10 20 30 40 50 60

Are there any specific features or service

that you believe Kotak bank could have
improve and enhance customer loyalty?
Sr no. Particulars No. of respondents Percentage
1 Digital Experience 49 47%
2 Personalization 15 14%
3 Customer Support 28 27%
4 Other 12 12%

Interpretation: For this survey the majority of respondents i.e., 47% of respondents think Digital Experience
improve and enhance customer loyalty.

48
 What motivates you to choose Ko-
tak as a brand than other com-
petitors?

0
5
14
3 24
18
1 44
0 5 10 15 20 25 30 35 40 45 50

What motivates you to choose Kotak as a brand than other competitors?

Sr no. Particulars No. of respondents Percentage

1 Trustworthy 44 44%
2 Service 18 18%
3 Employees 24 24%
behaviour
4 Other 14 14%

Interpretation: For this survey the majority of respondents i.e., 44% of respondents choose because they are
Trustworthy to Kotak as a brand than other competitors.

49
 How does Kotak Bank's customer
service quality impact customer
retention and loyalty?
14% 1
2
6% 3

80%

Sr no. Particulars No. of respondents Percentage

1 Positively 120 80%
2 Negatively 9 9%
3 Have no idea 21 21%

Interpretation: For this survey the majority of respondents i.e., 80% of respondents thinks Kotak bank’s
customer service quality impact customer retention and loyalty positively.

50
 How do changes in interest rates
and financial policies impact cus-
tomer loyalty and retention at Ko-
tak Bank? 1
2
7% 3
11% 4
6%

76%

Sr no. Particulars No. of respondents Percentage

1 Positive impact 114 76%
through competitive
rates
2 Negative impact on 9 6%
borrow
3 Confidence in 16 11%
financial stability
4 Communication and 11 7%
transparency

Interpretation: For this survey the majority of respondents i.e., 76% of respondents think positive impact
through competitive impact customer loyalty and retention at Kotak bank.

51
 84 78
74 70 75
80
53 57 52 56 58
60
40
12 17 17 17 16
20 2 2
0 1 1 1 1 1 0 1
0

Strongly satisfied Satisfied Neutral Dissatisfied Strongly dissatisfied

Interpretation: 56% of respondents are strongly satisfied with the overall banking experience at Kotak
Mahindra Bank.
49% of respondents are strongly satisfied with the statement: “ Kotak Mahindra Bank’s online banking platform
is user-friendly and easy to navigate.”
52% of respondents are strongly satisfied with the Kotak Mahindra Bank offers a wide range of banking
products and services.
49% of respondents are strongly satisfied with the accessibility and availability of ATM’s and branch locations
of Kotak Mahindra Bank.
50% of respondents are strongly satisfied with the responsiveness and efficiency of customer service
representatives at Kotak Mahindra Bank.

52
 81 78
80 73 73
61 56
60 53 52

40
15 16 19
20 13
0 1 1 2 2 2 1 1
0

Strongly satisfied Satisfied Neutral Dissatisfied Strongly dissatisfied

Interpretation: 54% of respondents are strongly satisfied that Kotak Mahindra Bank values and appreciates
your loyality as a customer.
48% of respondents are strongly satisfied with the statement: “Kotak Mahindra Bank’s rewards and loyalty
program are attractive and beneficial.”
52% of respondents are strongly satisfied with the clarity and transparency of free structures and account terms
at Kotak Mahindra Bank.
48% of respondents are strongly satisfied with Kotak Mahindra Bank addresses your financial nedds and goals
effectivelty.

53
  RELIABILITY TEST
SCALE : ALL VARIABLES

Case Processing Summary Reliability Statistics

N % Cronbach's
Cases Valid 155 99.4 Alpha Based
Excludeda 1 .6 on
Total 156 100.0 Cronbach's Standardized
a. Listwise deletion based on all variables in Alpha Items N of Items
the procedure. .999 .999 9

Interpretation:
As the above test show that the after testing reliability analysis the answer is 0.999 which is
greater than 0.6 we can say that the data is most reliable.

54
 Shapiro wilk test:

Case Processing Summary Tests of Normality

Cases Kolmogorov-Smirnova Shapiro-Wilk
Valid Missing Total Statistic df Sig. Statistic df Sig.
N Percent N Percent N Percent
VAR0000 150 96.2% 6 3.8% 156 100.0%
VAR0000 .312 150 <.001 .759 150 <.001
1 1
a. Lilliefors Significance Correction

55
 Interpretation: As the shapiro wilk test was conducted to know the normality the
normal of the data, from the above conducted and also the diagram we can say
that the data is not normal.
Kruskal Wallish test:

Descriptive Statistics
Test Statisticsa,b
Std. Maximu
N Mean Deviation Minimum m ave1 ave2
ave1 150 1.63 .689 1 4 Kruskal-Wallis 2.440 3.303
ave2 150 1.74 .755 1 5 H
monthly_inco 155 2.39 8.381 0 100
df 3 3
me Asymp. Sig. .486 .347
a. Kruskal Wallis Test
b. Grouping Variable: monthly_income

Hypothesis:
H0: There is no statistically significant difference between group.
H1: There is a significant difference between groups.

56
 Interpretation: A Kruskal – wallis H test showed that there was a statistically no
significant difference in Average personal, cultural, advertisement & price
between the different Age. Here I/ We reject the null hypothesis.

Test Statisticsa,b
Descriptive Statistics
Std. ave1 ave2
N Mean Deviation Minimum Maximum Kruskal-Wallis H 8.730 13.449
ave1 150 1.63 .689 1 4
ave2 150 1.74 .755 1 5 df 1 1
occupation 155 2.32 8.526 0 90 Asymp. Sig. .003 <.001
a. Kruskal Wallis Test

H0: There is no statistically significant difference between groups.

H1: There is a significant difference between groups.

Interpretation: A Kruskal – wallis H test showed that there was a statistically no significant difference in Average
personal, cultural, advertisement & price between the different Age. Here I/ We reject the null hypothesis.

57
 Descriptive Statistics
Std. Test Statisticsa,b
N Mean Deviation Minimum Maximum ave1 ave2
ave1 150 1.63 .689 1 4 Kruskal-Wallis H 5.118 2.583
ave2 150 1.74 .755 1 5
educational_qualificatio 155 2.65 9.271 0 111 df 1 1
n Asymp. Sig. .024 .108
a. Kruskal Wallis Test
b. Grouping Variable: educational_qualification

H0: No group differences are statistically significant.

H1: Groups differ significantly from one another.

Interpretation: A Kruskal – wallis H test showed that there was a statistically no significant difference in Average
personal, cultural, advertisement & price between the different Age. Here I/ We reject the null hypothesis.

58
 Chi – square

Chi-Square Tests
Asymptotic
Significance (2- Symmetric Measures
Value df sided) Approximate
Pearson Chi-Square 427.458a 32 <.001 Value Significance
Likelihood Ratio 57.161 32 .004
Nominal by Phi 1.661 <.001
Linear-by-Linear 127.667 1 <.001
Association
Nominal Cramer's V .830 <.001
N of Valid Cases 155 N of Valid Cases 155
a. 38 cells (84.4%) have expected count less than 5. The minimum
expected count is .01.

Hypothesis:
H0 : There is no statistically significant relationship between the median of variable X and median of variable Y.
H1 : There is a statistically significant relationship between the median of variable X and median of variable Y.

59
 Chi-Square Tests
Asymptotic Symmetric Measures
Significance (2- Approximate
Value df sided)
Pearson Chi-Square 635.076a 56 <.001
Value Significance
Likelihood Ratio 58.238 56 .393 Nominal by Phi 2.024 <.001
Linear-by-Linear 141.898 1 <.001 Nominal Cramer's V .765 <.001
Association
N of Valid Cases 155 N of Valid Cases 155
a. 66 cells (91.7%) have expected count less than 5. The minimum
expected count is .01.

Hypothesis:
H0 : There is no statistically significant relationship between the median of variable X and median of variable Y.
H1 : There is a statistically significant relationship between the median of variable X and median of variable Y.

60
  Finding

 Objective 1: To examine whether there is any relationship between customer loyalty and customer
retention.
According to the survey's findings, Kotak Mahindra Bank customers who are devoted to the company are more likely
to remain customers. The following conclusions back this up:
According to 82% of respondents, Kotak Bank values its customers' loyalty.
According to 80% of survey participants, Kotak Bank's customer service performance favourably influences
customer loyalty and retention.
54% of respondents are very satisfied with how much Kotak Mahindra Bank honours and respects their client loyalty.
 Objective 2: To examine the factors affecting the loyalty of the customers.
The poll found a number of variables that affect Kotak Mahindra Bank customers' loyalty, including:
Digital Experience: According to 47% of respondents, improving the digital experience can increase consumer
loyalty.
Trustworthiness: According to the survey, 44% of respondents chose Kotak Mahindra Bank because of this quality,
which is important for retaining customers.
Customer assistance: According to 24% of respondents, having strong customer
61
assistance affects their loyalty.
Service Quality: According to 61% of respondents, Kotak Bank's customer service is exceptional,
demonstrating the importance of service quality for retaining customers.
 Objective 3: Analyze the effectiveness of Kotak Bank's existing customer retention strategies.
The poll offers information on how well Kotak Bank's client retention strategies work:
According to 82% of respondents, Kotak Bank valued their patronage, indicating that the bank's tactics are to
some extent successful.
According to 76% of respondents, Kotak Bank's cheap rates increase client loyalty.
The availability and accessibility of ATMs and branch locations was rated highly by 49% of respondents,
demonstrating a favourable opinion of the bank's physical presence.
Customer service initiatives are successful if 50% of respondents are extremely satisfied with the
responsiveness and efficiency of customer service professionals.
Overall, the survey results show a strong correlation between client retention and loyalty at Kotak Mahindra
Bank. Customer loyalty is significantly influenced by elements like the digital experience, reliability, customer
service, and affordable prices. Although the client retention methods now in place at Kotak Bank are seen well,
they might need to be improved in a few key areas.

62
  Suggestion
Personalize your customer's experience to reflect their unique tastes, needs, and behaviors in order to make them
feel appreciated and comprehended.
Design loyalty programs that provide incentives for customers to continue doing business with the bank, such as
cashback, discounts, or special offers.
Outstanding customer service In order to create a great experience, teach personnel how to deliver exceptional
customer service, immediately addressing questions and complaints.
Introduce loyalty incentive systems that give customers points, rebates, or discounts on purchases. These rewards
may motivate clients to interact with the bank more frequently.
Educational Resources: Make materials available to clients to teach them about money management and financial
literacy, such as webinars, articles, and workshops.
Create channels for customers to express their opinions on their experiences. Act on their suggestions to enhance
services and show that you value their input.
Support via many channels: Provide customer service over phone, email, chat, and social media. Respond to
questions and issues as soon as possible to increase client satisfaction.
Packages for Specialized Banking: Create packages for certain consumer groups,
such as seniors, professionals, or students. These bundles could come with
63
personalized advantages and services.
 Conclusion

The study on customer loyalty and retention strategy in retail banking, with a particular focus on
Kotak Mahindra Bank, found that the bank's concentrated efforts on tailored services, cutting-
edge technological advancements, and seamless customer experiences have significantly improved
customer loyalty and retention. The bank's customer ties were further cemented by the
introduction of specialized financial products, quick problem solving, and continuous
communication. As a result, Kotak Mahindra Bank has successfully established itself as a reliable
financial partner, which eventually increases client retention and loyalty.

64
Thank you