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Akanksha chawla XIMB

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ING Hunt for Lions

Text of Akanksha chawla XIMB

  • 1. Case Study on Digital Marketing
  • 2. Executive Summary Digital Marketing Vs. Branch Banking Executive Summary Customer Insight Road Map Digital Banking Model The role of branches as the hub of transactions in Indias banking sector is undergoing a silent transformation as more and more individuals move to the digital medium for services that once could only be provided through branches. Banks are increasingly viewing branches as a place where they can render services beyond basic banking such as advising people on their savings or selling them investment products. The change is more visible in private and foreign banks in India as they push more and more functions online and use branches as a hub for sourcing loans and providing financial advisory services. This is an era of Millennials, 72% of the Millennials would like to bank with non-financial Services companies with which they do business (like Google or Amazon)* compared to 27% for those who are above 55. Understanding the needs of GenY is a Business Need. The Financial products of Banks have very low differentiation, rate of Interest and terms and conditions being the only differentiating factors. Therefore, Quality of Services is the only way of capturing higher market share. Primary research indicates that, People dont not associate ING Vysya with the word Digital Banking, over banks like HDFC, ICICI Bank. Increasing visibility and effectively engaging the GenY is important through Digital banking Model. Understanding the Customer and addressing the major concern over use of Digital Banking such as Security, Ease of use and Locational Accessibility is important to develop a roadmap for the strategy to leverage Digital Banking Advantage. Another major weakness is the Lack of Customer Relationship Building through the digital platforms. A Digital Plan should not Operate in Silos but in tandem with the Brick and Mortar Banking for better and enhanced customer support and relationship building. In reality, the major sustainable competitive advantage lie in technology, product experience and organizational culture among banks. *Accenture Report, The Digital Disruption of the Bank
  • 3. Executive Summary Digital Marketing Vs. Branch Banking Digital Marketing Vs. Branch Banking Why do customers buy from where they buy? Digital Banking Fast and Secure Processing Accessible at Finger tip Maximize customer contact capability One Stop shop to multiple customer needs Easy place to check Balance, Transfer Funds and Pay Bills and other Facilities like FD/ RD, Mobile Recharge etc Branch Banking NEFT/ RTGS Transactions of Larger amounts for those who are skeptical for Theft Depositing Cash Creation of DD Basic Formalities like change of Names, address and other details Unavailability of Internet Customer Insight Road Map Digital Banking Model Data from RBI indicates that the rate at which the urban branches were increasing is seeing a decline, while semi-urban and rural branches have picked up in pace in the last few years. Digital banking no doubt has had a role to play in this, - Saurabh Tripathi, partner and director at The Boston Consulting Group (BCG)
  • 4. Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model SWOT Analysis of Digital Marketing Strength Weakness New Age marketing Competitive advantage for economies of scale Rich customer resources Customer See Same bank through Multiple Touch points Threat Opportunity Omni Channel Simplicity and Immediacy at the convenience of the customer Risk of losing customers due to poor online banking experience Increase of cyber crime Online banking risks, credit card skimming and data leakage leading to operational and reputational risk Low Internet Penetration Poor CRM Lack of security Tendency to missell due to lack of face-to-face interface Low literacy of online financial services Greater penetration and improved touch points Low cost- Lesser Cost to the Bank per Transaction Increased demand for financial products Scope for better customer account maintenance and data analytics
  • 5. Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model Primary Research: Introduction to the Respondents Age of the Respondents 22% 73% 4% 0% 0% 18-24 25-31 32-38 39-45 45+ 43% 47% Occupation of the Respondents 4% 6% 0% 10% 20% 30% 40% 50% Employed with Government Services Self Employeed others Employed with a Private Firm 41% 22% 18% 12% 6% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Annual Income of the People Appreciation of Digital Banking 4% 96% 120% 100% 80% 60% 40% 20% 0% No Yes Around 73% of the people are in the range of 25 to 31 years, which is the major target generation for the Digital banking The Annual Income of the respondents were appreciably varying. This was important to gauge the different needs of different income range customers About 47% of the of the respondents are Employed with the Private Firms, while 43% are other like part time or freelancers or students The Survey clearly shows the acceptance and appreciated for Digital Platforms of Banking. 96% of them already uses Digital Platforms *The entire data report and analysis is attached in Appendix
  • 6. Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model Primary Research: Perception of Other Banks for Digital Banking The Factor Analysis of the Ranking of the Banks based on the perception of the Respondents Rank Bank Name* 1 American Express 2 HDFC Bank 3 Axis Bank 4 ICICI Bank 5 ING Vysya 6 IDBI Bank 7 State Bank of India The Factor Analysis of the Ranking of the Banks based on the perception of the Respondents Understanding the Perception of the Respondents The ranking was based on the preference of the respondents , the bank which comes first in their minds This means that the visibility of American Express and HDFC Bank and ICICI Bank are higher and they are preferred to the customers for the digital banking platforms Fund Transfer upto 50,000 Fund Transfer for a large amount like 1,00,000 or more Fund Transfer upto few 1000's Checking the balance Any other Additional Features Movie tickets Booking Mobile Recharge Understanding the usage pattern for the Digital Banking Usage The major transactions which takes place are Fund Transfer below 50,000 and Checking the Balance * These Banks were selected based on the general perception of their visibility in India
  • 7. Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model Primary Research: Respondents Behavior Major Access Points for Digital Any other 43% 55% 60% 50% 40% 30% 20% 10% 0% 2% Mobile App of the Bank Social Media such as Facebook banking Safety of Digital banking 33% 67% Yes No Preference for Banking Platform 80% 20% Digital Banking using Mobile App or Social Media Branch Banking Important Concern of the Respondents while using Digital Banking in Descending Order of Preference by Factor Analysis Transactional Security Ease of use of the mobile App Informational Security Other add on services (like mobile recharges and movie ticket booking etc) Important Disadvantages of going to a Brick and Mortar Bank (At the Top is the most important Concern) by Factor Analysis Low ATM Accessibility Written Forms Time Consuming Bank Branch is not nearby Bank Branch fixed timing In a Nut Shell: Thus, While social media is not considered as the major access point for digital banking (2%), Mobile app of the bank is seen as a very important tool (55%) The Most Important Factors for for the users of Digital Banking is the Transactional Security and Ease of Use of the mobile App are the major concerns The major disadvantages for the Brick and Mortar Bank is perceived to be the Low ATM Accessibility and lower visibility i.e. Bank Branch not nearby and higher time consumption These points are kept in mind to create the Digital banking Model for ING Vysya *The entire data report and analysis is attached in Appendix
  • 8. Secondary Research Accenture Digital Disruption Executive Summary 48% are interested in real time forward looking spending analysis 71% considers banking relationship to be transactional rather than relationship Driven 27% would consider branchless digital bank 51% want their banks to proactively recommend them products Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model Benchmarking: ROE, Deposits and Advances** HDFC Bank ICICI Bank Axis Bank ING Vysya Bank Deposits (in Rs. Mn) 1962470 2926136 2526136 413340 Adva