The document discusses strategies for digital banking transformation at a bank. It provides an analysis of primary research findings on customer preferences and usage of digital vs branch banking. A SWOT analysis identifies strengths and weaknesses of both approaches. Industry research shows growth of digital banking in Asia. The roadmap proposes a strategic shift to a digital-centric model and building blocks for digital transformation including customer understanding, process digitization, and analytics capabilities. It concludes that Indian banks must bridge the digital divide and adopt digital banking through improved CRM, customer support, and knowledge sharing.

3. EXECUTIVE SUMMARY
Digital Banking vs. Branch Banking
Road Map for Implementation
Primary Research –
Survey Statistics
Secondary Research
Industry Research and
Growth Predictions
SWOT Analysis Future Scope of Products
Building Blocks Strategy
Inclusion

4. INTRODUCTION
The Digital Banking Promise Emerging Trends
Fair price with
transparency
Immediate,
high-quality
interaction &
processing
Rich spectrum
of products
Lean channel
organization
structures
Integrated IT
infrastructure
and
Enhanced
revenue model
Outside interactions
Product and Service Enhancements
Leading Change
Other
Gamification
Social investing
Person-to-person payment
Crowdfunding
Video chat function
Personal finance tool
Electronic wallet solution
Source: A.T. Kearney and EFMA Global Retail Banking study
93%
66%
69%
17%
28%
3%
3%
3%
10%
0% 50% 100%
Mobile app suite
Inside operations

5. PRIMARY RESEARCH INSIGHTS
Age Group
3%
8%
10%
10%
6% 63%
Total Number of Respondents : 102
Please Note : Some questions were multiple-select
<20
21-30
31-40
41-50
51-60
>60
Occupation Business
5%
15%
10%
4%
5%
53%
8%
Private Service
Public Service -
Banks
Teaching
Self-employed
Student
Banking Preference
23
87
100
50
0
Branch Digital
Banking Preference (Age 31
& Above)
14
20
40
20
0
Branch Digital
45 54 59
27
9
80
60
40
20
0
Digital Banking - Information
Sources
Reasons for preferring Branch Banking Reasons for preferring Digital Banking
1 • Information Security
2 •Control
3 •Trust
1 •Convenience
2 • Time of Transaction
3 •Ease of Use
Points to Note
1. The reasons for
choosing Digital and
Branch Banking vary
widely.
2. The sources of
information for Digital
Banking is incredibly
less from the branch
itself, and more from
online sources and
friends/family.

6. PRIMARY RESEARCH INSIGHTS
79
49
29 31
74 65
43 40
22
100
80
60
40
20
0
Branch Banking - Uses
33
54
0 0
21
11
30 29
84
100
80
60
40
20
0
Digital Banking - Uses
Banking Service Importance Index Banking Service Satisfaction Index
7.73
5.56
6.32
5.94
4.77
1.76
1.87
2.72
6.25
2.07
Customer Care Facilities…
Personal Assistance
Product Options
Information Security
Personal Touch
Ease of Use
Time of Transaction
Convenience
Control
Trust
0.00 2.00 4.00 6.00 8.00 10.00
1 • Ease of Transactions
2 • Quickness of Transactions
3 • Ease of Approach
4 •Online Banking
5 • Personal Banking Assistance
6 • Branch Query Resolution
7 • Customer Care Facilities (Telephone and SMS)
Points to Note
1. Digital Banking is mainly used for Fund Transfer purposes. There is huge scope for its penetration in other aspects of banking.
2. Customers give maximum importance to Trust, Convenience and Information Security when it comes to Banking. Digital Banking
scores high on the second aspect but doesn’t match up to customer expectations in the other two factors.
3. Banks fall short in Personal Assistance and Customer Care Facilities departments, indicating a need to redesign CRM processes.

7. SWOT ANALYSIS
BRANCH BANKING DIGITAL BANKING
• Stringent
policy
measures
• Entry of NBFCs
• Growing
rural market
• Cross selling
opportunities
• Mediocre
publicity
• Poor image of
certain
products
• Wide spread
of branches
• Enormous
customer base
Strength Weakness
Opportunity Threat
• Insufficient
law
• Foreign banks
hit
• Loan solution
for MSMEs
• Increased
demand
• Compound
talent
shortage
• Poor CRM
• Lack of
security
• Competitive
advantage for
economies of
scale
• Rich customer
resources
Strength Weakness
Opportunity Threat

8. INDUSTRY RESEARCH & ANALYSIS
Present and Potential Digital Customers (in Millions)
670
170
60
380
100
1700
150
900
450
200
0 500 1000 1500 2000
Japan and South Korea
India
Greater China
ASEAN and Australia
Asia
2020
2012
Source: McKinsey - How to prepare for Asia’s digital-banking boom
Top Trends - Indian Banking Industry by 2020
1
•Mortgages to cross Rs 40 trillion by 2020
2
•Wealth management will be big business with 10X growth
3
•“The Next Billion” population will be the largest segment
4
•The number of branches to grow 2X; ATMs to grow 5X
5
•Mobile banking to see huge growth and will redefine
transaction banking paradigm
6
•Customer Relationship Management (CRM) and data
warehousing will drive the next wave of technology
7
•Banking margins will come under pressure
8
•New models to serve the Small and Medium Enterprises
9
•Investment banking will grow over ten–fold
10
•Infrastructure financing to hit over Rs 20 trillion on commercial
banks books
Source: BCG – Indian Banking 2020

9. ROADMAP for IMPLEMENTATION
Building Blocks of the Digital Transformation
Customer Understanding
• Analytics based segmentation
• Socially informed knowledge
Top-line Growth
• Digitally enhanced selling
• Predictive marketing
• Streamlined customer processes
Customer Touch Points
• Customer service
• Cross channel coherence
• Self service
Process Digitization
• Performance improvement
Worker Enablement
• Working anywhere anytime
• Broader and faster communication
• Community knowledge sharing
Performance Management
• Operational transparency
• Data driven decision making
Customer
Experience
Operational
Process
Business Model
Unified Data & Processes
Digitally Modified Business
• Product/Service augmentation
• Transitioning physical to digital
New Digital Business
• Digital products
• Reshaping organizational boundaries
Digital Globalization
• Enterprise integration
• Redistribution decision authority
• Shared digital services
Analytics Capability Digital Capabilities Business & IT Integration
Solution Delivery

10. ROADMAP for IMPLEMENTATION
Strategic Positioning
1
•Find value proposition
targeted to the segment
identified.
2
•Enter the market with four to
five simplified core offerings.
Ensure a couple of necessity
products are included.
3
•Offer personalized web
experience, so that customers
receive recommended
products based on digital data
4
•Introduce a social and mobile-centric
dimension, in which latest
digital technologies and platforms
would be used to enhance their
reach and offering
Channel Offerings
1
•Make multichannel access a
core feature of the value
proposition.
2
• Inculcate a light physical
presence and agents to enhance
the customer experience, as well
as to promote trust and branding.
3
•Foster affinity and loyalty with fun
ways to engage younger customers
(selective gamification of certain
aspects of banking).
4
•Foster a cross-partner ecosystem
allowing creative collaboration
and formation of communities
and integrated applications.
Shifting Strategies
1
• Shift from -
Branch-centric,
product-focused
model. This is at
best a follower
strategy in Digital
Banking.
2
• Shift to - Self-directed
digital-centric model.
This is a more
proactive approach
where customers are
empowered to do
their own banking
Points to Note:
1. The digital future for banks will come in the form of the end-to-end digital bank.
2. A near-term digital strategy is deploying technology to reduce costs and increase effectiveness across elements of the sales
process.
3. The impetus for the end-to-end digital bank that is now being pioneered by innovative attackers will, however, only become
stronger as the young digital generation gets older and wealthier.

11. ROADMAP for IMPLEMENTATION
Urban India – Inclusion of the Older and/or Orthodox Population
Rural India – Inclusion of the Last Household
CRM
Improve CRM by improving
query handling and
approachability
Customer Care
Improve customer care
facilities by providing training
to improve efficiency
Personal Banking
Assistance
Introduce and/or sharpen
personal banking assistance
Knowledge Sharing
Train employees in the art of
providing knowledge to new,
digitally un-evolved customers
Go Mobile
Target Mobile Phone banking
as the medium to spread reach
into the rural sector
Bank Village Kiosks
Assign registered kiosks in
villages to provide basic
banking facilities to residents
Micro Franchising
Allow local players to operate
their own banking franchises
with due support and
verification from the company
Infrastructure
Development
Play a pivotal role in building
rural infrastructure

12. FUTURE OF PRODUCTS WITH DIGITAL
CASA
Present
•Drawn-out physical
process, based at the
branch
Future
•Online portal for form
submission and
identity verification
Loans
Present
•Paperwork and
processing done at
the branch
Future
Credit/Debit Card Applications Forex Services
•Online request
submission
•Verification process
integrated with UID.
Insurance Wealth Management
Present
• Already exists
Future
• Propagation of
‘smart’ chip
based cards
Present
• Limited availability
and minimal use
Future
•Ability to trade
currencies through
bank accounts, similar
to demat accounts
Present
• Comparison and
application
options
Future
• Commoditization
will lead to
reduced prices
Present
• Ever increasing
demand
Future
•Hyper-connected,
high-speed access
through mobile
channels

13. CONCLUSION
Learning from the Analysis
1. The Indian banking industry is poised for change, both in terms of demand as well as in terms of
technological advancement.
2. Bridging the digital divide is the most important challenge facing banks. This challenge has two
facets:
i. Bridging the gap between conventional bankers and digital banking.
ii. Reaching out to the rural population.
3. ING Vysya has to implement a step-wise approach towards the shift from Branch to Digital
Banking.
4. The challenge lies in adopting the change in mindset as well as concentrating on improving
those very same features which are inherently deficient in Branch Banking for the success of
Digital Banking.
5. Some of the important points to note towards the Digital Banking transformation include:
i. Improved CRM systems.
ii. Improved customer support and personal assistance.
iii. Knowledge sharing.
iv. Demographic, financial and social inclusion.
6. It would help ING Vysya immensely if they could be the first mover towards this change.
However, a strategic focus towards the long-term, including stakeholder development and
future sustainability should be kept in mind while driving towards this change.

14. SOURCES & REFERENCES
How to prepare for Asia’s digital-banking boom
• McKinsey Report
Digital Transformation: A Roadmap for Billion-Dollar Organizations
• Capgemini Consulting
World Retail Banking Report 2013
• Capgemini
Analysis of SWOT on Internet Banking
• Ulster University
Banking in a Digital World
• A.T. Kearney & Efma
The Digital Challenge in Retail Banks
• Bain & Company
Indian Banking 2020 - Making the Decade’s Promise Come True
• Boston Consulting Group

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