Soumya Ranjan Baral GIM
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Transcript of Soumya Ranjan Baral GIM
Soumya Ranjan Baral GIM
Digital vs Branch Banking
Customer Preferences
SWOT Analysis Road Map Value
Proposition
Executive Summary : Digital banking doesn’t tend to substitute for branch banking but complement it
Analysis
Strategic Objectives
Insights
Recommendation
Assess the advantages and dis-advantages of digital and branch banking
What channels do customers prefer and analyse the reason for the preference
Analyse and explore strength, weakness ,opportunities and threats to each mode
Determine future strategy for ING Vysya to move towards digital banking
Different value propositions to be offered to help achieve increased growth
Focus on strategic analytics tools, social media interactions and innovative payment solutions
Gen Y and X to large extent prefer digital
Focus on strategic analytics tools, social media interactions and innovative payment solutions
Optimum Branch Model: Shop,
Pod, Lounge and Pharmacy
Analytical, Social, Ecosystem,
Experience ledDigital playground for banks is still very small, however evolving
Secure, ease of access and faster time savingBetter customer engagement and on the move mobility 24*7
Non-banking corp. one of the largest threatCross selling not possible in digital mode
Go Analytical, Go Social and Go Mobile
Increase revenue by 25% and reduce
cost by 20%
Rise of Machines : ” But its not the end rather the beginning”
Erosion of public trust due to several bank failures and crisis
Data theft, identity theft, Phishing
Optimizing a branch network helps save about
30%
Core banking services to become simpler but value added services will growInternet and
mobility: ever increasing trend
Banking has reached a tipping point with digital as its fulcrum.
Hub and Spoke Model
Huge potential in rural India: still not penetratedDigital
technologies will accelerate branch transformation and not make them extinct
Customers are willing to pay a premium for the innovative products and services who has good reputation for services
Most complex and profitable financial products, such as mortgages, are still sold in branches.
Introduce innovative offerings like Hub flagship Branches , Notification by Twitter/ Facebook , etc.
“Digical”Mashup of digital technologies and physical facilities
Digital vs Branch Banking
Customer Preferences
SWOT Analysis
Road Map
Product Analysis
Value Proposition
Conclusion
Digital
New concept in area of electronic banking
Enrich online and mobile banking services by integrating digital technology
Currently undergoing the third wave of digital banking
Focus on strategic analytics tools, social media interactions and innovative payment solutions
Rise of Machines : ” But its not the end rather the beginning”
Digital playground for banks is still very small however evolving
Digital vs Branch Banking
Customer Preferences
SWOT Analysis
Road Map
Product Analysis
Value Proposition
Conclusion
Digital vs Branch Banking
Customer Preferences
SWOT Analysis
Road Map
Product Analysis
Value Proposition
Conclusion
Erosion of public trust due to several bank
failures and crisis
Preference for digital is pervasive worldwide
Security : No need to carry cash
Fast moving life
style
Increased regulation
Collapse of liquidity in the market
Reduced risk
appetite
Services on the move and interactive
applications
Customers are willing to pay a premium for the innovative products and services from a bank who had given them a good service earlier or has the reputation to do so
Why do customers prefer or are switching to
digital?
Digital vs Branch Banking
Customer Preferences
SWOT Analysis
Road Map
Product Analysis
Value Proposition
Conclusion
Digital Banking Branch Banking• On the go connectivity• Convenience of 24*7 services• Huge cost reduction (nearly
50%)• Better customer primacy and
engagement• Better offerings for customers• Security : No need to carry cash• Higher efficiency with service
time per customer decreasing• Easy account opening and
access• Higher returns for investors as
cost is low
• Many banks are still not able to provide basic online services
• Partner with firms that are acting as catalysts for change
• Follow buy approach rather than build approach : Difficult to imitate
• Displacement strategy to increase the wallet of share
• Platform for innovation : sophisticated authentication mechanisms and location based personalization
• Data Theft• Digital technology itself is
changing rapidly and thus difficult to catch up
• Identity theft and Phishing• Non-banking organizations
could seize the opportunity to own the customer experience layer and provide alternate means of distribution
• Loss of high net worth individuals
• Many people are still not comfortable with online applications
• Lack of trust on digital channels
• HNI’s still prefer one on one engagement
• Instruments like loans still require to visit the branches
• Cross selling is limited
Digital vs Branch Banking
Customer Preferences
SWOT Analysis
Road Map
Product Analysis
Value Proposition
Conclusion
Digital Banking Branch Banking• Better Customer Engagement• Cross selling• Secure from data theft and
phishing• Most complex and profitable
financial products, such as mortgages, are still sold in branches.
• When it comes to depositing a check, people would rather hand it directly
• HNI’s prefer branch banking(provide more business than retail investors)
• Many banks are still not able to provide basic online services
• Regain trust and build engagement with the customer
• Develop new offerings for the customers
• Seamless integration of digital and physical distribution channel
• Digital technology itself is changing rapidly and thus difficult to catch up
• Has reached a tipping point with digital as its fulcrum.
• Loss of customers• Decrease in share of wallet• Lack of trust
• Gen Y and other customers don’t want to stand in a queue
• Proximity of the branch may be large
• Highly cost intensive (nearly 50%)
• Need to hire more staff• Staff quality differs from each
branch• Service time per customer is
very high• Products offered are costly• Transactions are can be done
within the working hours only
Digital vs Branch Banking
Customer Preferences
SWOT Analysis
Road Map
Product Analysis
Value Proposition
Conclusion
Road ahead for Digital Banking
Digital vs Branch Banking
Customer Preferences
SWOT Analysis
Road Map
Product Analysis
Value Proposition
Conclusion
Not envisioning a branchless future, but a future with
lesser branches
Digital vs Branch Banking
Customer Preferences
SWOT Analysis
Road Map
Product Analysis
Value Proposition
Conclusion
ING Vysya
Iwish by ICICI provides the convenience of FD returns and at the same time the flexibility of saving as much as you want and any time you want based on your goal
ICICI has my rewards offer which accumulates points at every purchase and also payback points at the same time
ICICI direct provides seamless navigation and continuous trading advice in the form of reports on daily, weekly , monthly and yearly basis.It has been awarded as the best demat service provider for subsequent years
Couple of banks allow user to complete part of the loan process and cheques via online channels which again reduces time and increases efficiency
Digital vs Branch Banking
Customer Preferences
SWOT Analysis
Road Map
Product Analysis
Value Proposition
ConclusionThe Opportunity
Increase revenues by Reduce service cost by
25% by increasing growth rate to
20% 10%
Align Governanc
e and Organisati
ons
Digital vs Branch Banking
Customer Preferences
SWOT Analysis
Road Map
Product Analysis
Value Proposition
Conclusion
Though the majority of Indians live in villages, the number of
branches in rural and urban India is almost same
1
Rural India Accounts for miniscule share of total credit
disbursed by banks
2
Private sector banks, in particular are the laggards at providing credit to
rural India
5
3
4
Digital vs Branch Banking
Customer Preferences
SWOT Analysis
Road Map
Product Analysis
Value Proposition
Conclusion
SocialLeveraging the power of a customer’s social network to create a greater personal intimacy
AnalyticalUsing information about a customer to their advantage, creating a deep and intuitive understanding of their goals
Fidor Bank Introduced “Banking with Friends” which allows user to register
using Facebook
EcosystemA network of partnership both financial and non-financial , seamlessly integrate a customer’s banking activities with the rest of their day-to day life
Mobile phones used as primary payment devices
replacing debit/credit
card : Feature introduced in
IPhone 6
Experience ledFocusing on fulfilling a customer's needs rather than selling banking products
Visual Financial Management
tool
“Digical”Mashup of digital technologies and physical facilities
Introduce Innovative Offerings…• Hub flagship
Branches : serve as showrooms for complex product sales and for providing trusted expert advice
• Notification by Twitter/ Facebook of a transaction
• Store Loyalty cards and
Convert to cash automatically
• Offer Spending Analysis Tool
• Storage of key documents in
Virtual Vault• Mobile phone Replacing
debit /credit cards• Voice-activated Virtual
Assistant for mobile devices
Digital vs Branch Banking
Customer Preferences
SWOT Analysis Road Map Product
AnalysisValue
Proposition Conclusion
References
• WWW.rbi.org.in• http://www.pwc.com/en_GX/gx/banking-capital-markets/publications/assets/pdf/pwc-new-digital
-tipping-point.pdf• http://www.carolinemoeckel.com/defining-digital-banking/• http://www.economist.com/news/finance-and-economics/21589471-banks-have-no-branches-ar
e-making-surprising-resurgence-third-time-lucky• http://www.sec.gov• http://
www.bain.com/Images/INDUSTRY%20BRIEF%20As%20UK%20customers%20embrace%20mobile%20banking%2C%20will%20the%20branch%20disappear.pdf
• http://blogs.hbr.org/2014/09/rethinking-the-bank-branch-in-a-digital-world/• http://thefinancialbrand.com/35509/digital-channels-branch-banking/• http://www.visiblebanking.com• http://www.atkearney.com/digital-business
RBI_Banking Centre Distribution.xls
RBI_Branch Details.xls
RBI_Online Transactions.xls
INDUSTRY BRIEF.pdf
Digital vs Branch Banking_Survey.xls