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ING Hunt for Lions
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NareshIBS Bangalore
Digitalization in Banking
April 11, 2023 Digitalization in Banking 3
Index• Digital Banking 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)
April 11, 2023 Digitalization in Banking 4
Digital Banking Vs. Branch BankingDIGITAL 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
April 11, 2023 Digitalization in Banking 5
SWOT
Opportunity:
- Extended Work hours to serve customers well-Attract new customers through CRM
Threats:
-Globalization- Liberalization- Foreign players with lucrative services-New licenses for incoming players-Standard of living change- Operational Risks
Weakness:
- Difficult to provide All services-Transaction costs- Transition time- Improper Waiting Line Management-Limited Working Hours- Demand and Supply Mismatch
Strengths:
-Convenience- Better Place to know about the products and services-Indians strong belief on the service
Strengths:
- Less Operational Costs- Less transaction time- Higher comfort levels- Integration of various services- Service automation
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
Weakness:
- Media is required to deliver the service- Not every customer is literate on technology-Most of the Indians do not have access
Digitalization Branch banking
April 11, 2023 Digitalization in Banking 6
Digitalization – A Differentiator 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
April 11, 2023 Digitalization in Banking 7
India’s sentiment on Digitalization
Bank’s Effort on Digitalization Indian Customers
April 11, 2023 Digitalization in Banking 8
Road Map towards Digitalization
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.
Design Delivery channels•small banks•In-principle bank•message banking•Payment Banks•Coffee Shop Bank•Flagship branch•Pop-Up branch•TV Banking etc.
•IT•Providers•Employees etc.
Modifying 1
Modifying 2
Change Management
Phase 1- Metros Only
Phase 2- Tier II Cities
Phased Approach Only
Phased Approach Only
•Customers•Employees•Suppliers•Third Party•Top Management
Monitoring
Pilot Test
StartEnd
Implementing the Design is Critical
April 11, 2023 Digitalization in Banking 9
Competitors position on Digitalization
SBI
ICICI
AXIS
HDFC
CITI
Though it has huge market share, it is behind In the race in terms of Digitalization
Majority of the Indian banks are digitalized, the mentioned banks are reaping fruits because of their commitment to Technology
April 11, 2023 Digitalization in Banking 10
ING Vysya’s products and ServicesMar-11 Mar-12 Mar-13 Mar-14
Branches 511 531 546 557
ATM’s 416 456 500 638
Employees 7041 10001 9758 10058
PERSONALBANKING
WHOLESALE 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
Debt Capital Markets:- Syndicated Loans- Bonds/NCD’s - Securitization - Structured Products
Business Banking:- SME Loans- MSME/CGTMSE- AGRI- Accounts & Deposits- Business Net Banking
Investment:- Wealth Management- General Insurance- Exide Insurance- ING Fortunate trade- QFI
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
Loans: - Term Loans - Demand/Short Term - Cash Credit/Overdraft - Pool Buy-outs
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
* Indicates more efforts are needed to Digitalize
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
April 11, 2023 Digitalization in Banking 11
Customers Insights
April 11, 2023 Digitalization in Banking 12
Indian Banking Industry
• 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
Market Size Investments Govt. Initiative
• 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
News
References: Media Reports, Press releases, RBI Documents
April 11, 2023 Digitalization in Banking 13
Industry Growth
April 11, 2023 Digitalization in Banking 14
Competitor’s products and Services
• 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
April 11, 2023 Digitalization in Banking 15
Thank You