Customers at India’s Cosmos Bank are willing to pay for more personal interactions, according to the company’s managing director and CEO, Vikrant Ponkshe. Could this be a model for banks in the United States?

Cosmos Bank is a co-operative (member-owned) institution founded in 1906. It has 1.8 million customers and 145 branches, which comes to approximately one branch per 12,400 customers. (Compare this to Union Bank, based in San Francisco, with about 2.5 million customer accounts according to the FDIC and 422 branches, or one branch per 5,900 customers.) However, that ratio might change slightly for Cosmos Bank when its 300,000 customers outside of India, primarily in the Middle East, are taken into account.

The bank is headquartered in the city of Pune — never heard of Pune? It has more than 5 million residents and is the 8^th largest city in India, but is overshadowed by nearby Mumbai.

Mobile banking is exploding in India, Ponkshe told Bank Innovation, but love for technology is anything but universal. “The customer is getting fed up with technology,” Ponkshe said. “PIN codes, authentication, people are getting fed up. We don’t want to lose the human touch in banking.”

About 27 million Indians living in cities had smartphones in 2012, which represented 9% of all city-based mobile phone users. The number of overall mobile users and smartphone users is surely higher across the entire country now.

Ponkshe spoke to the impersonality of technology, which is starting to affect customers. “The customer wants something unique to them. Humans want to feel that we are special, unique,” he said. “We approach them about a new technology and get the cold shoulder, but if we approach them about something unique to them, we get an overwhelming response.”

This is particularly true of older customers. Cosmos recently launched a banking facility for older people that addressed issues of primary concern to them, such as healthcare services, and contained a strong human touch.

Older customers as well as nonresidents are very concerned with maintaining that human touch and are willing to “pay an extra bit for services offered” that honor these values, Ponkshe said.

Younger customers of Cosmos Bank, on the other hand, tend to be “very, very tech-savvy,” Ponkshe said. “They like to have the latest software on the iPad, for example, so banks have to keep pace with the technology” to hold these customers. Younger customers are also not as loyal as older customers. “They will switch accounts for a cheaper bank,” Ponkshe said. “Ease and convenience are most important for younger customers.”

But younger customers also “like a face and a voice to interact with” Ponkshe said. “They need anytime, anywhere banking,” but at the same time, “they like to have one relationship manager, to put their trust in one person, and may be willing to pay a premium for this.”

This is a neat solution to the problem of pushing customers to self-service channels. If customers want higher touch and are willing to pay for that, banks can offset much of the cost of those more expensive channels.

Cosmos continues to see mobile usage grow. One popular area is fund transfers. “It’s pretty easy to move money over the mobile phone in most places,” Ponkshe said. This is done using existing banking rails, so the banks as well as the telecoms have a part in it, and Know Your Customer procedures are followed.

It is even easy to move money across international borders, for example, from Cosmos customers in the Middle East sending money back home to India. The exception, as might be expected, is the United States. Regulations and security measures put in place by the United States government have made moving money in and out of the country less simple for Cosmos customers.

India was shielded to some extent from the economic downturn beginning in 2008, Ponkshe said. “Gold prices, property prices, loan-to-property values” — India did not see the large fluctuations seen i the US and Europe, and consequently fewer new regulations have appeared in recent years.

The mobie money service M-Pesa, which began in Kenya, is also making inroads in India, but its penetration is fairly limited so far.

Cosmos is seeing younger tech-savvy customers and older, more tech-averse customers alike willing to pay for a higher and more personal level of service. This should be encouraging news for banks in the US looking to offset the high costs of staffing service channels.

Jim Marous, SVP of corporate development for New Control, has long been an advocate for banks to find more revenue from ongoing customer relationships. Speaking of the possibility of banks in the U.S. charging for higher-touch experiences along the lines of Cosmos, he told Bank Innovation, “Every bank has to do an amazingly focused job on getting revenue for services, for value.” After all, Marous tells banks, there are not many options. “You have to cut costs or generate revenue more than you are” right now.