Ashish KumarAsia Pacific Institute of Management

Branch banking vs. Digital banking and how to go forward

EXECUTIVE SUMMARY • Banks try to capture more market

share and for that they adopt digital business model.

• Gradually Banks reducing paper based interactions, primary focus has been on enhancing the product suite with the value added service.

• Customers using online bank services are increasing day by day.

• Road map for ING VYSYA Digitalization

Digital banking vs. Branch Banking

• People like Digital banking because it is More Cheaper, Faster, Easier and Less Time Consuming in comparison of Branch banking

• People like Branch banking because it is More Secure, Receiving information on product/ services first hand, Personal relationship/service, in comparison of Branch banking

• The increase in internet and mobile adoption provides new ways for consumers to access banking services.

• New channels include websites, social media, mobile apps and others.

Consumer Trends | Digital Adoption

As per RBI data electronic transactions are increasing day by day and transactions in paper are decreasing. It gives positive indication for Digital Banking.

• The main challenge in mobile financial services is keeping them simple and intuitive, as financial services can be complex

• As per RBI Mobile transactions are increasing day by day.

• New banking and investment apps are more secured ,logging is friendly and much user friendly than the website. Consumers use these apps 30% more frequently than any other app type.

Branches are expensive and wieldy 95% of new product sales happens at the branch

Online

80% adults use internet and 51% bank online

Mobile

52% CAGR for Mobile Banking Transactions

Social Media

2.4B Social networking accounts

SWOT Analysis of Branch Banking ETOP SAP

Customized branches according to region Secure

Capture the rural market Knowledge accessibility

Expansion of anti-cyclical Management activities Personal relationship/ service

Building new client relationship Receive advice first hand

Expanding the advisory and other services offer to clients Focus on Customer service

Wastage of paper Promotions

Lot of queue More convenient

Maximum Number of employee Needed

Highly qualified and experienced staff

Slow Process Maturity matched funding

Changes of errors are high Time & money consuming

Limited Time hours High queues

SWOT Analysis of Digital Banking

ETOP SAP

Environmental Factor Internal Factor Online Market Unique Products

Innovation Technology

New Services Cost Advantages

Emerging Markets Customer Loyalty

New Products Brand Name

New Markets Cost Structure

New Technology Customer Service

Bad Economy Weak management

Govt Regulations Weak R&D

Political Risk High staff Turnover

Volatile Revenue

Substitute Products

SWOT Analysis of Branch and Digital Banking

Digital TransformationBank address key challenges of Cost, Compliance & Customer Retention

Digital Banking core challenges

Retail, Wholesale Banking

• Core Banking Modernization

• Pricing & Billing• Loyalty

Investment Banking

• Securities Back-Office Transformation

• OTC Derivatives Trading

Wealth Management

• Wealth Management Advisory

• Portfolio Analytics

Credit Organizations

• Loan Origination• Credit

Information Services

Payments & Cards

• Payments Transformation

• Card System Transformation

Insurance

• Package Implementation

• Distribution Management

Customer initiates Transaction

0 SecondsWeb page slow to load

8 SecondsWeb page doesn’t load

18 Seconds

80% customers quit

30 Seconds

Interested Unhappy Annoyed Dissonant

Analysis of ING VYSYA Product and services

ING VYSYA Unique features to its customer that help to improve the revenue and taping more market share.

• Self employed and small to mid sized enterprises

• New to Bank salary accounts

• Institutional customers

• Zwipe classic savings account for mass affluent Segment

• Flexi current account targeted at owners of seasonal businesses

• Easy credit overdraft facility for salary account holders

• Institutional savings account and fixed deposit for institutional clients requiring customized solutions

• Creating stickiness by delivering superior experience on internet banking and mobile banking

Future Road Map for ING VYSYA Happening Now Subject

Gamification Niche Targeting, Personalization / Customization, Loyalty, Location-Based offers

Content & Consumer Centricity

Comparisons, Reviews Video & Chat functions for advisory services, Online Account Management

Online Advisory Services

QR Codes, Crowdfunding / Group Payments, hands-free

P2P, immediate transfers, NFC, Mobile Wallets & Couponing

Online & Mobile Payments

Pure-Play Mobile Omni-Channel, Direct Service Multi Channels & Devices

E-Vaults Expedited Payments, Configurable alerts

Self Services

Social Investment for banks, reviews, social media P2P payments, Community Banking model

Benchmarking, social log-in, social investments, marketing

Social Media

Digital Road Map for ING VYSYA

Digital*

Personalized

• Self Service

• Peer 2 Peer / Group payments

• Customer enablement

• Basic social media & analytics

• Online Chat

Digital*

Engaged

• Channel integration

• Online Video & Chats

• Online Account Management

• Partial fulfillment

• Max. services through digital channels

Digital*

Innovative

•24x7x365 access to all services through digital channels

•Focus on functional innovations and new operating models

2 Online Advisory Services

3 Online & Mobile Payments

4 Online Advisory Services

5 DIGITAL

Digital*

Informational

• Personalization / Customization

• Loyalty

• Consumer Centricity

Digital*

Transactional

• Online Video & Chats

• Comparisons & Reviews

• Online Account Management

1CONTENT & CONSUMER CENTRICITY

Online Video & Chats• Video & Chat functions for

advisory services

• Online virtual chat

Comparisons & Reviews• Competitors start to feature

reviews on their products & services, especially in insurance.

Online Account Management• Consumers can apply for

banking account, insurance services etc. online

• Mobile signature and data retention

Digital Banking is only about new technology or business models. So ING VYSYA has to take these steps.

• Mobile is the game-changer so Bank has to make its mobile app simple and more popularize

• Increase Online Market Presence Using Advanced Technology Platforms Such As Web 2.0 and Social Networks

• Increase Push Towards Web-Based Activities to Put the Online Channel on an Equal Footing with Branch Networks

• Increase Spending on Customer Analytics Tools to Improve Customer Relationships.

• Bank has to make a customize app for Wealth management and Bank Insurance

Peer 2 Peer / Group payments• Immediate transfers• Crowdfunding• Mobile & Social Media

p2p payments :Social media enables instant money transfer among members of the family and friends. This is especially beneficial to Gen Y consumers.

Online / Mobile Services• Configurable alerts now span

a variety of needs, such as bill payment reminder, incoming payment alert, etc.

• Expedited payments

Digital ATMs• Smartphone-enabled

ATMs• Video Tellers

E-Vaults• E-vaults enable clients to

store important and critical documents in the secure folders that are provided along with their online accounts.

Technology• NFC• Hands Free• QR Codes

Omni-Channels• Services are available

seamlessly on any platform

• Online / offline convergence

Direct Service• Online channel for

offline competitors

Pure Play• Online / Mobile only

Convenience Solutions•Mobile Wallets & Couponing

•Check deposits & mailing

ConclusionDigital Transformation:• Not restricted to channels or

technology only, needs to be a holistic transformation across back-office, staff and operations as well.

• About building the right mix of “Bricks and Clicks”.

• No silver bullet, it has to be unique strategy based on business drivers, customer segment, goals etc.

Thank you