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Naresh IBS Bangalore
This document discusses digitalization in the Indian banking industry. It begins by comparing digital and branch banking, noting who prefers each and why. It then examines the SWOT of digital and branch banking. Several major Indian banks like SBI and ICICI are highlighted as leaders in digitalization efforts. The document outlines India's sentiment toward digitalization and banks' roadmaps. It also reviews ING Vysya Bank's products/services and the size and growth of the overall Indian banking industry. Competitors' digital products are listed and industry growth predictions are presented.
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- 3. Index • DigitalBanking Vs. Branch Banking (Who preference and Why ?) • SWOT (Digital Banking & Branch Banking) • Digitalization – A Differentiator in Banking • India’s sentiment on Digitalization • Road Map towards Digitalization • Competitors position on Digitalization • ING Vysya’s products and Services • Customers Insights • Indian Banking Industry • Growth Predictions • Competitor’s products and Services (Above ING’s offerings) 29 September 2014 Digitalization in Banking 3
- 4. Digital Banking Vs.Branch Banking DIGITAL BANKING BRANCH BANKING WHO WHY WHO WHY • Students • Software Professionals • Business People • Agencies • NRI’s • New Generation Employees • HNI’s • Other Country People • Techies etc. • Other White Colored Personnel • Access to technology • Technology oriented • Standard of living • Culture • Environment • Globalization • Stiff Competition • Reduced Costs • Time Saving • Others • Primary sector people • Elder People • Home Keepers • People in Tier-3 cities • Rural People • Illiterate Persons • Who won’t like technology •People near to bank • Without Smart phones • Baby boomers • Others • Access to technology is not available • Some do not like technology • Low income levels • Low standard of living • Low awareness levels of technology • Operational risks in digital technology • Others 29 September 2014 Digitalization in Banking 4
- 5. SWOT Strengths: -Convenience - Better Place to know about the products and services -Indians strong belief on the service Opportunity: - Extended Work hours to serve customers well -Attract new customers through CRM Weakness: - Difficult to provide All services -Transaction costs - Transition time - Improper Waiting Line Management -Limited Working Hours - Demand and Supply Mismatch Threats: -Globalization - Liberalization - Foreign players with lucrative services -New licenses for incoming players -Standard of living change - Operational Risks Strengths: - Less Operational Costs - Less transaction time - Higher comfort levels - Integration of various services - Service automation Weakness: - Media is required to deliver the service - Not every customer is literate on technology -Most of the Indians do not have access Threats: - Stringent Security measures - Higher Operational Risks - Monitoring of operation - Systems and Network Protection Opportunity: - Customers from competitors - Globalization and liberalization -Many third party providers - Huge customer base in India - Increasing standard of living Digitalization Branch banking 29 September 2014 Digitalization in Banking 5
- 6. Digitalization – ADifferentiator in Banking Why Need for Digitization Competitive Advantage • Provides competitive advantage • Differentiates best players • Defends tuff competition • Increased Wallet Share of customers • Dissatisfied customers with traditional banking • Maximum utility of technology • Changing customer habits • Stiff Competition • Threat of foreign players with good services • Entrants with better services • Regulator guidance on business operations • Molding to changing environment • Giving customers the option of good experience. • Others Giants Wants to start the Business (Ex. Google) • Satisfy the loyal customers with enhanced services • Long Term Customer relationship • Enhanced Business Operations • Enhanced Cross channel functions • Creating Value from information • Innovative business model creation 29 September 2014 Digitalization in Banking 6
- 7. India’s sentiment onDigitalization Bank’s Effort on Digitalization Indian Customers 29 September 2014 Digitalization in Banking 7
- 8. Road Map towardsDigitalization Strategy Design & Build Deploy Digi Assess Plan Requirements •Capabilities •Competence •Market •Regulations •Resources •Supply •Stakeholders •Customers •Players •Straddling •Demand •Vendors •Market research •Profits •IT etc. •Digitalization •SWOT •TOWS •PESTEL •7’S Model etc. •IT •Providers •Employees etc. Design Delivery channels •small banks •In-principle bank •message banking •Payment Banks •Coffee Shop Bank •Flagship branch •Pop-Up branch •TV Banking etc. Modifying 1 Modifying 2 Change Management •Customers •Employees •Suppliers •Third Party •Top Management Phase 1- Metros Only Phase 2- Tier II Cities Phased Approach Only Phased Approach Only 29 September 2014 Digitalization in Banking 8 Monitoring Pilot Test Start End Implementing the Design is Critical
- 9. Competitors position onDigitalization Majority of the Indian banks are digitalized, the mentioned banks are reaping fruits because of their commitment to Technology SBI ICICI AXIS HDFC CITI Though it has huge market share, it is behind In the race in terms of Digitalization 29 September 2014 Digitalization in Banking 9
- 10. ING Vysya’s productsand Services Mar-11 Mar-12 Mar-13 Mar-14 Branches 511 531 546 557 ATM’s 416 456 500 638 Employees 7041 10001 9758 10058 PERSONAL BANKING WHOLESAL E BANKING OTHERS Banking: - Preferred Banking - Savings Account - CA - Demat - Term Deposits - Credit/Debit Cards - Forex Services - Salary Accounts - Institutional accounts - Lockers Borrowing: - Home Loan - Personal Loan - Credit Cards - Gold Loans - Loan on Securities - Loan on Property Financial Markets: - Risk Management - Research& Analysis - Market Trading - ALM Investment: - Wealth Management - General Insurance - Exide Insurance - ING Fortunate trade - QFI Debt Capital Markets: - Syndicated Loans - Bonds/NCD’s - Securitization - Structured Products Loans: - Term Loans - Demand/Short Term - Cash Credit/Overdraft - Pool Buy-outs Business Banking: - SME Loans - MSME/CGTMSE - AGRI - Accounts & Deposits - Business Net Banking Access Points: - Internet Banking - Mobile Banking - Phone Banking - SMS Banking - IMPS - Business Net Banking Shop & Pay Online: - E deals - My Card, My Style - Recharge& Shopping Corporate Finance: - M&A - Private Equity Advisory - PE Advisory - Other Global Transactions: - Cash Management - Trade Services Private banking: -Measuring Risk - Investment Banking - Investment Advisory NRI Banking: - Accounts - Fixed Deposits - Money Transfer - Wealth Management - Home Loans - PO Box Services CASA -34.23% (137,587 Mn) FD -41216.7 Crore NIM -3.58% CRAR-16.76 Tier I -14.86%, Tier II- 3.9 Bn 29 September 2014 Digitalization in Banking 10 * Indicates more efforts are needed to Digitalize
- 11. Customers Insights 29September 2014 Digitalization in Banking 11
- 12. Indian Banking Industry Market Size Investments Govt. Initiative • IBA assets US$ 1.8 Trillion • Expected to touch US$ 28.5 Trillion • 2001-2010 revenue US$ 11.8 bn-US$ 46.9 bn • Credit Card & Personal Loan segment is booming • ICICI’s Personal loans 1461.6 % growth • Axis bank’s Personal loans at 49.8% and credit cards at 31.1% growing • HDFC&UBI planning to set up equity markets. • Exim Bank strongly supporting exports from India to South Asia, Africa and Latin America • IndusInd Bank will soon begin its asset reconstruction business • Jammu and Kashmir (J&K) Bank plans to increase its presence outside India • The RBI has announced a few measures in its bi-monthly monetary policy (US$ 75000- 125000) • State Bank of India (SBI) has announced a one-year rural fellowship program • The RBI has simplified the rules for credit to exporters. • The RBI has enabled overseas investors News • Pradhan Mantri Jandhan Yojana’s vision will change banking regime. • CAD 8 year low of 2% of GDP • FII inflows increased • Japan’s bank MoU with India • Good governance in Public sector banks • In 5-10 Yrs. 2 Mn. New Jobs References: Media Reports, Press releases, RBI Documents 29 September 2014 Digitalization in Banking 12
- 13. Industry Growth 29September 2014 Digitalization in Banking 13
- 14. Competitor’s products andServices • Pehla Kadam SBI • Pehla Udaan SBI •World Card SBI • Virtual Card SBI • DSA ICICI • FX Innovative Servises ICICI • Family Wealth Account ICICI • Special recurring Deposits PNB • ECGC PNB • Insurance Linked education Canara •MCC Canara • Double dhamaka NRE Scheme Bank of Baroda 29 September 2014 Digitalization in Banking 14
- 15. Thank You 29September 2014 Digitalization in Banking 15