- Banks are increasingly adopting digital banking to meet rising customer demand for technologically advanced products and services. However, customers still value physical branches for personalized advisory and building confidence in the bank. - A survey found that most customers prefer digital and mobile banking, and would recommend their bank to others. Digital banking provides opportunities for cross-selling through data analytics while physical branches shift focus to complex services. - The transition to digital banking involves three phases - initiation, implementation, and maturity - with careful evaluation of speed versus efficiency. Banks must consider organizational challenges and risks in their digital transformation roadmaps.

2. Executive Summary
Banks are entering into newer dimension of relationship with customers
• Customer wants new products which are inline with the technological advancement
• But Along with technologically advanced products, Customers are also looking for banking systems which are robust and have stability and value
Physical bank branches still remain a vital element
• Physical banks are expected to play a shift in role from traditional “transactional selling” to “enterprise selling”
• Transactional operations would be shifted to digital while Physical bank infrastructure would be expected to boost customer confidence and increase
customer’s wallet share
Digital Banking means enormous opportunities for cross selling
• Ease of application of predictive analytics and data intelligence on digital data would enable easy identification of customer’s present and future
needs providing opportunities to cross sell
• Ease of maintaining long historical data about customer for accurate future predictions
Digital Banking as a means to capture the Long Tail
• In past Infrastructure cost of setting up a branch in rural areas made it expensive and infeasible to capture customers with lower average deposits but
the same can now be achieved digital banking
• The capture of long tail would not only provide greater market share but also access to additional low cost funds
Transition to Digital Banking from traditional model : A three phase process
• The three phase being Initiation (pressure for going digital), Implementation (Shape of digital banking) and Stability/Maturity
• The second most important aspect for making of this transformation is evaluation of speed vs. Efficiency/results
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3. A total of 167 participants were surveyed for collecting data on various aspects of their decision making between traditional and digital banking
Frequency of using digital banking
4%
4%
8%
~50% are using digital banking for 2-5 times a week which gives bank
increased opportunity to interact and sell other products to customers
Population classification based on their profession
Respondents were selected from diverse background for the survey with
highest proportion being students
Understanding Consumer Behavior: in Banking
Age Group distribution of Survey Participants
19%
9%
Maximum Responses were from age group of 26-35 and 36-45 who are
or would be major user of banking system
Your Preferred Mode of Banking
15%
Digital banking has been the most preferred mode of banking with mobile
banking also forming substantial share. Also, those who prefer online
banking are customers of different age group and profession
Would you recommend your bank to others?
Maximum respondents are willing to recommend their bank to others
giving banks an opportunity to capture new audience through existing
Which banking channel is most convenient for you?
7%
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8%
14% 50%
18-25
26-35
36-45
46-55
55+
17%
50%
4%
8%
5%
once a week
2-5 times in a week
once in a month
2-5 times in a month
Once in a year
less than 5 times in a year
More than 5 times in a year
I do not use mobile banking 94%
6%
Yes
No
77%
5%
6%
5%
Online/Internet
Mobile
ATM
Branches or Office
Call Center
29%
8%
15% 14%
12%
5%
9%
8%
Student
Business
Commercial - Management Cadre
IT professional
Technical
Housewife
Retired
Other
52%
22%
11%
Digital Banking Only
Mobile and Digital
Banking
Traditional Banking
Mobile Banking Only
Digital banking stands out to be the most convenient channel probably
due to convergence of products between traditional and online and
the increasingly fast life of the individuals at work

4. Expected Change in Pattern of using Bank Branches
11%
73% participants voting for less often visit to bank branches indicated
an expected change in trend and want to move towards digital banking
from traditional banking.
Understanding Consumer Behavior: in Banking II
Are you working in a Bank?
Participants working for a bank were helpful in providing “Employee
perspective of the bank” which was necessary to understand what they
think could be improved in the banking system for digital banking
70
60
50
40
30
20
10
In which bank do you hold your primary account?
The respondents of survey had bank accounts in different banks giving a
healthy distribution with majority from ICICI Bank followed by Axis bank
Considering to switch your bank account?
Reasons for Recommending Current Bank to Others
91
Product Customization
Too much Hassle to Switch
Stability of Bank
Good Branch Service
Services accessed from banks other than primary
17
Other
Life Insurance
Private Banking
Auto Loan
College Loan
Money Market Instruments
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10%
90%
Yes
No
17%
83%
Yes No
9 17
60
18 25
7 11 6 14
0
No. of Customers
Bank
61
152
91
30
91
60
91
75
1
0 20 40 60 80 100 120 140 160
Good no. of branches nearby
No. of Customers
74
15
0 0
15
0
32
15
0
4 4
0
0 20 40 60 80
Checking Savings
16%
73%
More Often
Less Often
No Change
Majority of respondents surveyed for the exercise were satisfied with
their current bank and its facilities
Good online banking facilities (152), Stability of the bank (91), Trust and
Values (91) are the major reasons for recommending the bank. Banks
needs to include these messages in their overall communication strategy.
Apart from secondary savings account, home loans and credit card
facility are major products which customer buy from other banks

5. • Lockers, Cheques and
Cash deposits form the
major reasons for why
customers like to visit
the bank physically but
for other services
customers are
switching to online
banking
• RBI’s initiative to
promote a ”less cash”
society could help
promote customer
awareness about digital
banking
Understanding Consumer Behavior: in Banking - III
• Major reason for
switching is the branch
network of the bank as
most of customers still
visit branches for
products which are not
or cannot be digitized.
• Information from
various sources and
convenience to have
everything at one place
forms other important
reason for closing down
the accounts
Why People closed accounts in primary banks?
23
31
Information provided by News
Information Provided by friend or relative
Access to Branches or banking services
More Convenient to have everything at…
Branch or Office Location
Experience with the Bank was…
Services accessed through Primary bank
3
Other
Life Insurance
Private Banking
Auto Loan
College Loan
Money Market Instruments
101
Why do you go to Bank Branch?
27
28
24
Other
To inquire more about new products
You feel better when talking to a person…
Advisory on your additional Balance
Lockers
Security as you feel that Transfer over…
Account Statement
Opening an Account
Cash Deposit
98
97
Other
e-Statement
Prepaid Recharge, Scheduled…
Opening of Online FD and other services…
Online Account Management,…
ATM Facility
IMPS
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22
35
32
36
30
0 5 10 15 20 25 30 35 40
Rates/Fees
115
28
8
51
30
52
11
39
60
11
4
0
0 20 40 60 80 100 120 140
Checking Savings
87
103
26
61
30
14
0 20 40 60 80 100 120
Cheque Deposit
117
59
90
71
105
49
0 20 40 60 80 100 120 140
RGTS, NEFT etc. - Online Transfer
No. of Customers
Facility
Why do you use: Digital or Mobile Banking?
• Checking savings forms
the major component
of the primary bank
product with almost
75% of surveyed
participants using it
• Private banking, Home
loans are other
products providing
transactional
information about
customers & also giving
opportunities to
identify and cross sell.
• Most of the earlier
paper based services
are now moved
towards online
banking or are
successfully
replicated and used
on the digital space
like Online FD, DD
over internet etc.

6. Consumer Behavior Study: Inferences
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Significant Surge in customer demand for digital banking and mobile banking products
• With improved security features and popularity of ATMs, RTGS and NEFT transfers
• The banking industry has been witnessing rapid transformation and innovation in digital technology as never before
• The initiatives are also inline with the regulator’s aim for a less cash society as part of Payment and Settlement Systems Act, 2007
Digital Medium: A symbiotic relationship between customers and banks
• To the banks it gives increased touch points and ability to serve customers post regular hours which means more revenue
• It also means cost effective operations for the banks as in the digital medium the per unit transaction costs comes down significantly
• For the consumers the most important benefit is personalized offerings, anytime banking and that too with great convenience
Three major drivers for shift in customer’s interest from Traditional Banking to Digital Banking
• Product customization and ease of buying relevant particularly in the fast moving life
• Efficiency in digital services with very low probability of errors due to limited human intervention
• Customer Centric view with tremendous analytical ability to suggest the desired products for each customer
Brand Name and Stability of Bank: Major factors in customer decision making process
• Apart from the interest rates, features and customer services, bank’s brand name and stability of the bank has been an important factor which goes
into the decision making process of the customer
• In the survey, it was found that 55% of the customers suggested brand name, trust and values of the bank to be the major reason to keep holding
the bank account with the primary bank
Talking to a person rather than an automated system for advisory: Major reason for branch banking
• Apart from the operational needs of completing cash and cheque transactions, most customers felt the need of traditional banking because of the
personalized advisory and satisfaction which they receive taking to a person rather than a machine on the online system
• Traditional banking improves customer’s confidence in the bank and thereby promotes acceptability of its digital products

7. SWOT Analysis – Traditional Banking
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THREATS
• Emergence of new technologies which are getting more and more
accepted amongst the people
• Changing lifestyle of people has led to demand for high speed operations which is
sometimes not possible in traditional banking
• Analytics and artificial intelligence taking shape in providing ability to offer
individual level customization
• Robbery etc. which can led to huge losses for the bank’s reputation (Tangible assets
would be insured but not the Brand)
STRENGTHS
• Personal Relationship between the customer and banker meaning better
understanding of the client needs
• Safety of transaction as perceived by the customers due to trust and assurance
• Knowledgeable employees who are able to leverage experience to handle
exceptions and issues
• Better Positioning of the bank’s brand due to Physical presence near to customers
• Immediate helping hand to customers for uncommon issues for which systems
can’t be programmed
OPPORTUNITIES
• Rural population still has high acceptability of traditional banking as
compared to the digital banking due to Personal relationship
• Still large volume transactions are done through cash and cheques rather than
online which forms about 40% of the country’s GDP
• Insecurity from spammers, hackers is still a big challenge for acceptance of digital
banking
• Certain facilities like Lockers, personalized advisory etc. can’t be provided online for
all kinds products
WEAKNESS
• Huge Infrastructure and Maintenance cost for the bank
• Even for the basic operations customer has to visit to the bank branch
• Pace of operations is very slow when compared to modern forms of banking
• Fixed work timings
• Document management and cash management – challenging and concern of safety
• High chances of error due to manual intervention in operation
• Accessibility only in places where branches are physically present and hence
accessibility is limited

8. SWOT Analysis – Digital Banking
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THREATS
• Changes in the government regulations may led to high costs
for system upgrades
• Threats from Hackers, spammers etc. which can disrupt the system catering to
major segments of the business
• Low comparison cost and switching cost between competitors leading to low
customer loyalty and a loss in revenue
STRENGTHS
• Advantages in terms of the cost per transaction as well as infrastructure cost
• Efficiency and accuracy of transactions
• Ability to influence cross selling through offerings as detected by analytics on
previous transactions
• Easy and self guided mode of operations makes transactions frequent (source for
fee based revenue)
• Ability to serve for longer duration as time limits are virtually not applicable
• Uniform Customer experience across transactions due to the nature of medium
OPPORTUNITIES
• Quick and online marketing with multiple touch points leading to
a higher probability of selling and cross selling
• New services and new category of products like e-Locker, online gift cards etc.
provides an edge to compete on new platform
• The information about customer is available across organization through system
rather than just the few people who interact with him in traditional format
• Able to cater to a wide geography without incurring huge infrastructure cost
WEAKNESS
• All the problems faced by customer may not be programmable and
human intervention may become important
• Lack of personal touch which leads to plain business – not exciting for customers
• May not be possible to offer all the products online or though ATMs
• Robustness of system dependent upon third party network and services which are
sometimes not in bank’s control

9. Road Map for ING Vysya to move towards Digital Banking
• The road map for moving towards digital banking consists of three major phases:
Phase1:Initiation
Pressure for going Digital
• Pressure from Customers: Most of the customers (~74% ) in banking have a preference for digital banking or digital as well as mobile banking, the switching costs today for
customers are also coming down making it easy for the customer to move their business to another bank if quick digitization is not done
• Pressure from Employees: Most of the employees are typically trained towards working in a competitive environment and on a robust technology which keeps them up to date
and also improves their efficiency
Evaluating speed vs. impact of going Digital
• Organizational Challenges: Though most of the customer and employees may push organization on going for digitization, the technology used by the bank may not be
acceptable to all. It is therefore important for the bank to implement changes at a pace at which the employees could adopt and accept the same but also keep a check on
competition as once a customer is lost, there are very few customers (~17%) who are willing to change
• Cost Optimization: It is better to be a late mover in technology adoption for going digital considering the high risk of technology failure which can bring the business to a
standstill, therefore it is better for the bank to adopt a tested solution suiting its requirements rather than trying something disruptive
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Phase1:
Initiation
Pressure for going Digital
Evaluating the speed vs. impact of
going Digital
Phase2:
Implementation
Shape of digital banking
• Digitizing customer experience
• Digitizing operational processes
• Digitizing Business models
Phase3:
Optimization
Digital Technology Stabilization and
usage
Accessing Digital banking Maturity

10. Phase2: Shape of Digital Banking
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Road Map for ING Vysya to move towards Digital Banking - II
Customer
Experience
Operational Process Business Model
Customer Understanding
• Data Analytics based Segmentation for facilitating
better needs
• Socially Informed Knowledge through spending and
usage pattern
Process Digitization
• Performance Improvement
• New Products – eLockers etc.
• New Features
Digitally Modified Business
• Product/Service Augmentation
• Transitioning Physical to Digital
• From Cash to Non-cash transaction facilitation
Customer Touch Points
• Customer Service extended almost 24*7
• Cross Channel coherence
• Self Service and Guided Interface
Performance Management
• Operational Transparency
• Data Driven decision making
• Stringent deadlines and robust systems to achieve the
same
New Business Avenues
• New Digital Products – Online FDs, Online RDs etc.
• Extending the organizational boundaries at multiple
fronts like channels, products, services etc.
• Customer Behavior and Product customization
Growth in Revenues
• Predictive Marketing and Digitally enhanced selling
• Streamlined customer processes
• Centralized system leading to uniform customer
experience
Worker Enablement
• Broader and faster communication across levels
• Organization wide knowledge sharing platforms
• Faster and interactive working with availability of help
through system experts
Digital Globalization
• Enterprise integration across geographical boundaries
• Redistribution of decision authority providing
centralization as well as responsiveness
• Shared digital services
Unified data and Processes
Analytics Capability Digital Capabilities Business Solution & IT Integration
Solution Delivery

11. Road Map for ING Vysya to move towards Digital Banking - III
Phase 3: Optimization: Digital Technology Stabilization and Usage
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Pillars of Digital Technology Stabilization
Efficiency: In terms of no. of banking
transactions per unit of time
Effectiveness: Till what unit of customer
segment the solution is customized. Ideally it
should be customizable at individual level but
each level of customization has associated
costs which implies striking the right balance
Adaptability: The solution should be adoptable
to all the stakeholders viz. the employees, the
customers (in terms of offering produced) and
most importantly to the regulators
Technology and their Usage
• Business Intelligence for Sales and Marketing – Offering right product to right customer at the
right time
• Common Prospect: Identifying the cross product needs of customers by studying their already
purchased offerings and the offerings avoided by the customer over a period of time
• Customer Acquisition: In one of the competitive environments acquisition of customers is not only
difficult but also expensive and hence targeting the right customer through customer profile
analysis becomes important
• Enterprise Intelligence and corporate performance management: Budgeting, planning and
forecasting, profitability and risk vs. return optimization through scenario planning and testing
which can be easily and accurately be performed on the data collected through the digital medium
• “Always connect and Anywhere Banking”: Easy to use mobile banking facility through friendly
mobile applications, network of ATMs, limited functionality branches at selected location based on
the prospect business
• Capturing the Long Tail: Most of the banks have not been able to leverage on technology to
penetrate remote areas, with the implementation of Financial Inclusion program by the Regulator
leveraging on technology to provide innovative and wide scale catering products will help to
capture new markets
Business Intelligence
Common Prospect
Customer Acquisition &
Enterprise selling
ATM &
Anytime Banking
Stabilization Technology Usage

13. ING Vysya Product Portfolio: Comparative Analysis
PARTICULARS HDFC ICICI ING Vysya
Account Name
Privileged
Platinum
Titanium Platina
QAB (Quarterly
Available Balance)
2,00,000 75,000 +
TRV of 5 to
10 lac
1,00,000
DD/PO Wavier Available
upto 50,000
N.A. Available upto
50,000
PAP Cheque books Unlimited Unlimited Unlimited
One Lakh Cash
withdrawal from
any ATM
N.A. N.A. Available*
Cash Back Offer on
Shopping*
N.A. N.A. 1 to 2 %
Cash-net enabled
credit/debit card
N.A. N.A. Available
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Comparison of Privileged Savings Account Way forward for ING Vysya Products in the digital banking Model
• Most of the ING Vysya Banking Products viz. Cumulative Deposits, Fixed Deposits etc.
can be transformed to digital banking directly with implementation of digital banking
solution
• Check systems with data-mining on the transaction data of the consumers can provide
great opportunities for cross selling especially the products like insurance, loan
products etc.
• Multiple accounts of the single customer can be linked together for having a “Single
Customer View” which gives bank ability to customize product for each of its customer
• Offering customers with gifts and reward points for being loyal and thereby promoting
existing customer as a source for new customer acquisition
• Fully or semi customized services for managing customer finances through products
like money manager are other sources of revenue which ING should look forward to
target in the digital banking world

14. Conclusion
Competitive banking environment: Efficiency and Better Customer Experience are key to success
• Without efficiency banks are bound to hit a lower margins and become uncompetitive in the long run
• The way forward to achieve efficiency is through technology and going digital
Customer moving business rather than switching accounts: Fight for wallet share
• Considering the ever increasing technology and plethora of new products hitting the market, customers tend to hold multiple accounts and the
business which banks can get from each customer can vary drastically if a bank lacks providing offers in one way or the other
• This gives rise to the challenge of moving up the value chain and making “Enterprise selling” as compared to “Transaction based selling”
Digital Banking: Journey from Money Managers to Value creators for the customers
• Through a distinctive portfolio of products and services by understanding customer needs
• Product should come from Analytics and understanding of the customer behavior rather than the gut feeling of the managers
Cross Selling: The Analytical way to achieve competitive edge
• More easy to implement in a digital world because of consistency of data & availability of powerful techniques for data analysis
• Provides multiple touch points and increased customer seek time through 24hrs banking and innovative product offerings
World of Digital Banking and Traditional Banking go hand in hand
• Traditional banking are necessary to support the entire banking ecosystem as they provide customer with real interface to work with
• Personalized services with human interface of these mode of banking is still preferred for many of the products in banking
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15. References and Data Collection
Primary Data Collection:
• Survey form for Digital vs. Retail Banking: https://docs.google.com/forms/d/12_HONNSPt7OfZN6GYCompuqyqb6zN0t0R8W3eelr6CY/viewform
• Survey form for Data collection on Credit Card: https://docs.google.com/forms/d/1-ZiHasc6Wof1EZgNxvwfRfSUSss7bo_C0D9Wu0Q_22I/viewform?usp=send_form
Secondary Data Collection:
• E&Y Global Consumer Banking Survey: http://www.ey.com/Publication/vwLUAssets/EY_-_Global_Consumer_Banking_Survey_2014/$FILE/EY-Global-Consumer-Banking-
Survey-2014.pdf
• Mckinsey Report on Retail Banking in Asia:
http://www.mckinsey.com/~/media/mckinsey/dotcom/client_service/Financial%20Services/Latest%20thinking/Consumer%20and%20small%20business%20banking/Retail_ba
nking_in_Asia_Actionable_insights_for_new_opportunities.ashx
• Bain Report on Customer Loyalty in Retail Banking: http://www.bain.com/Images/BAIN_REPORT_Customer_loyalty_in_retail_banking.pdf
• PWC Report on Consumer Behavior: http://www.pwc.com/en_US/us/financial-services/publications/viewpoints/assets/viewpoint-when-the-growing-gets-tough.pdf
• Draft for vision 2015 on Payment and Settlement Systems: http://www.rbi.org.in/scripts/PublicationVisionDocuments.aspx?ID=664
• Website of Banks:
• http://www.rbi.org.in
• http://www.ingvysyabank.com/
• https://www.sbi.co.in/
• http://www.axisbank.com/
• http://www.hdfcbank.com/
• http://www.hsbc.co.in/1/2/homepage#
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THANK YOU