Digital Banking

Digital Banking
Opportunity for Extraordinary Gains

in Reach, Service, and Productivity
in the Next 5 Years
August 22nd, 2015 Submitted by: Group 6
Ajay Jindal WMP10047
Anshul Verma WMP10055
Mahesh Kumar WMP10073
Vipin Kumar Jain WMP10088
Digital Opportunity
Engage customers on digital channels for higher engagement / sales
Not just lower cost
Digitize various processes to improve efficiency
Sales
Back office
Credit collections / monitoring
Administrative functions
Create propositions to attract the digitally savvy fast growing segment
Work together to create systemic efficiency (eg. Eradicate cash)
Digital vs digitization-15sept14.pptx
Challenges Faced by Indian Banks

India is a huge population country with closer channel integration
between rural and urban populace.
Another challenge is non- branch channels throw up is the lack of
human touch.
Handling huge no. of complaints and making technology tailored to
the needs of different sections of people.
Targets to meet BASEL-III Norms by March 2018.
Higher Provisioning Norms due to tougher rules set by RBI.
Higher Staff Retirements in PSB by 2018.
Higher NPAs due to economic downturn.
CASA growth = Transaction growth

Savings balance vs. transactions per account across banks (FY 14)
Balance / active account
100,000
80,000
60,00
0
40,00
0
20,000
0
0
10
20
30
40
50
60
Total transactions / active account

Digital transactions will dominate in 5 years

Transaction profile of Indian Banks
Growth
CAGR
Digital
18%
40%
53%
40-50 %
ATM/CDM
Traditional
FY
14
FY 20
(I)
FY 20
(II)
3
Emerging paradigms
Current Paradigm
Emerging Paradigm
Deposits business
offer payments for free
Payments service
deposit
follows
Small business claim banks are disinterested

# of digital channels used
5
19 %
4
11 %
3
70 %
2
Never / Don't remember
Once
Many times
# of times digital channel was explained

Why is digital adoption low?

Too busy opening accounts
Cumbersome on-boarding process
Organizational ownership of digital channels not prominent
Digital channel designed for transactions not for engagement / sales
Disproportionate attention on retail (SB) at the cost of SME (CA)
Customer acquisition productivity is stagnant

Number of savings bank accounts opened per metro and
urban branch
1,594
1,052
933
PSU
(Large
)
897
860
796
PSU
(Mediu
m)
FY 12-13
756
Private (Old)
1,468
Private
(New)
FY 13-14
9
Digitization of sales is huge opportunity

Impact
Productivity
1.35x
TAT
First Time Right

(FTR)
1.33x
+35%
x
x +33%
-50%
0.5x
Travel
time
x
-55%
0.5x
10
Could public sector leap frog to a digital back end?

Back office FTE as percentage of total FTE (FY 14)
13.3
9.0
5.0
4.2
3.9
3.7
2.4
2.5
4.3
1.8
1.4
PSU
(Mediu
m)
PSU
(Larg
e
)
1.3
Private
(Old)
Operational
10
Glob
al
benchmark
Private
(New)
Credit
11
10-20% over staffing in administrative functions

Admin staff / Total bank FTE (FY 14)
% of total bank FTE
14.7
13.1
11.5
11.2
10.3
Global
median
(10%)
Digital tools
for efficiency
Ultra transparent
performance
management
Optimum resource
allocation s
PSU
(Mediu
m)
PSU
(Larg
e
)
Private
(Old)
Private
(New)
Industry
Re-engineer
administrativ /
e
functional
processes
12
Technology spend in India

Spend on technology as % total revenue
5.9%
5.7%
4.6%
3.1%
2.8%
3.3%
PSU
(Large
)
Average
in FY 12
Private
(New)
Average in FY 13
Average in FY 14
13
New approach to technology

Human Centered Design
What is the
real "need"?
Minimum
"viable"
option?
Iterative, short sprints
What
solutions
are
"feasible"
?
14
Seven hurdles in digitization
Non - Human
Centric Design
Risk
percepti
on
Multi stake holder

alignment
IT Change
capacity
Value leakage
between design
and execution
Vendor
Capabiliti
es
Compete with
BAU
15
"Bank in a Bank" for creative destruction

Incumbent Bank
Digital Attacker Bank
Typically universal
Target The Digitally

Savvy Customers
Digitise the legacy
Processes designed
from scratch
Branch at the core;

digital channels are
alternate
Digital channels at the

core
16
Technological Initiatives launched by PSBs

SBI m Cash: Enables you to transfer money to anyone by just
knowing their mobile number or e-mail ID, irrespective of
whether they bank with SBI or not.
Quick Transfer: Enables you to send up to Rs. 5000/- to
anyone through mobile banking without registration of
beneficiary.
SBI Quick: Access basic banking services through a simple
Missed Call or an SMS.
Online Overdraft against Bank Deposits : Provides
instant overdraft facility against e-TDR/e-STDR through Internet
Banking.
Online Loan against shares :This online facility enables
you to apply for loan against shares which are held in your De
mat Account of SBI Cap Securities. The whole processing is
fully automated and the loan amount gets credited to your
account
without
any visits to
the branch.
Online Loan
Application
Portal
: A online platform to apply
for Home/Car/Education/Personal loans. Also enables you to
check your loan eligibility and get instant e-approval.

Digital Banking Outlets: Experience state-of-the-art digital
banking at "sbiINTOUCHLite" branches already live at select
centres. We propose to scale up the numbers during the current
year.
Tie up with m-Commerce/e-Commerce players: The Bank
.has entered into MoUs with leading e-commerce players like
Amazon, Makemytrip & Snapdeal to explore ways to make your
shopping experience smoother and happier. We are running
very exciting and attractive cash back deals for you from time
to time.
SBI e-corners: 24 X 7 facilities to deposit, withdraw, transfer
money, update passbook and use host of other facilities
Contactless Debit Card: Enables you to make fast,
convenient and secure payment for everyday purchases by
simply
yourLearning
card.
State tapping
Bank Tech
Centre: Equips you to take
advantage of the latest technology at SBI through interactive
learning programmes held across the country. Also, view
tutorials on various functionalities by visiting our page on You
Tube.
17
DIGITAL BANKING: sbi INTOUCH
The
salient
INTOUCH are:
features
of
sbi
Instant opening of SB accounts with

personalized
debit
cards.
card is mandatory. eKYC enabled.
Accounts are opened with an option for

the customer to choose his/her/their home branch.
PAN
Home branch selection, for the time

being, has been restricted to the branches in the
city in which sbi INTOUCH Branch is located. Hence, it
is all the more important for the staff of the branches
Finance Minister Arun Jaitley along with SBI Chairperson Arundhati Bhattacharya during the
located in these cities to visit the sbi INTOUCH Branch
Launch of SBI INTOUCH- Indias most ad- vanced chain of digital store in New Delhi
and understand its functioning so that the aim of the
Bank and the TG in focus
are not lost sight of. Help the Bank to realize the target by educating the TG visiting your branches
appropriately.
Accounts are opened through kiosks in self-service mode.
Instant enablement of Internet Banking and Mobile Banking.
Instant issuance of Debit Card.
All the above done and delivered within a time span of 10 to 15 minutes without any manual intervention by staff.
Multi-Function-Kiosks (MFKs) to provide a range of banking services. More number of services to be
added shortly.
Smart ATM: delivers cash in denominations of customers choice. Accepts cash. More number of services are on the anvil.
Smart Table for financial planning.
Internet Banking Kiosks.
Interactive Screens for product information and assisting the TG in auto and education loans. Housing
loan assistance to be launched shortly.
DIGITAL BANKING: sbi INTOUCH

The
salient
features
INTOUCH are (contd..):
of
sbi
Backend integration with Customer Re

lationship Management (CRM) Tool to capture business
leads and allocation of leads to the sales agents for
conver- sion.
Cross-selling and Up-selling through
the smart devices.
Remote advisory. Subject Matter Ex
perts (SMEs) of the Bank and also of our Subsidiaries
are available through video for financial counselling.
Event areas to conduct events of interThe RBI Governor, Dr. Raghuram Rajan, visited SBI INTOUCH
est to the TG, with marketing of Banks
outlet at Phoenix Market City in Mumbai
products in focus.
DBOs, since they are in Shopping Malls and High Street locations to attract the TG to our books, function from 10 AM to 10 PM.
Many more products/features will be introduced in due course and rollout to cover more geographical area
is being planned.
STATE BANK ANYWHERE

State Bank of India has always been at the forefront in adopting interactive and incentivizing ways to motivate customers and engage with them. The latest initiative from
the Bank comes to users in the form of a mobile smart phone application. The application State
Bank Any- where (formerly known as State Bank Freedom Plus) was launched on
15th March, 2014 (for Android) and 7th May, 2014 (for IOS) followed by Blackberry.
State Bank Anywhere is
the most efficient, effective, easy to use,
secure retail internet smart phone application for banking that makes banking easier
than ever.
State Bank Anywhere has
received an overwhelming response from
users and it continues to grow in popularity day after day. The below numbers
provide
mony a clear
of testiits acceptance
among our users
Features:
Account info and Mini Statement

M-Passbook- an electronic version of a
passbook available on a smart phone
Fund Transfer to accounts in
Bank is continually engaging
SBI and other Banks
with users through Social
Credit Card (VISA) Transfer
Media (Facebook,
Twitter,
YouTube
etc.)
and Banks
Instant Term
Deposits
eown websites, this
to promote and
and
Recurring
TDR/e-STDR
application
increase
its adoption. To
reach a wider audience segment, hindi version of
Deposits
State Bank Anywhere in the name has also been
Bill Pay for billers, already
registered
ATM cum Debit Card hot list- ing
Cheque Book Request
Mobile Top up, DTH Recharge
launched.
Approx. number of State Bank Anywhere Downloads (combining
Google, iOS and Black- berry)
Average User rating (out of 5)
19.1 lacs
4.3
STATE BANK ANYWHERE

Exciting offers
Currently
a Cash Back scheme is currently in effect from April !st 2015
to 30th Sept, 2015 to incentivize users using State Bank Anywhere for performing transactions through
the application. Download today from Google Play/iOS App store or Blackberry World and experience
banking on your fingertips.
What is m-Passbook ?
m-Passbook is an electronic replication of our physical passbook. All transactions get synced into the
passbook.
New Features in next release of m- Passbook
Support for Offline viewing
Search facility with amount, date etc.
To be made available in i-OS.
Availability in Hindi.
17
How to earn Reward Points ?

The Enterprise- wide Loyalty program rewards you
for various transactions across many banking
services.
Debit Card
Internet Banking
Mobile Banking
Personal Banking
Loans
Demat Account
Rural Banking
SME
Accounts
State
Bank Rewardz is the Enterprise - wide
Loyalty Program for all State Bank customers that
awards them with Reward Points for various
transactions across many banking services.
17
Where to use Reward Points ?

You can redeem your Reward Points to get
FREE gifts, merchandise and services on
www.StateBankRewardz.com or on the State
Bank Rewardz mobile app.
This platform of FREE gifts, merchandise and
services includes:
Mobile/DTH Recharge
Airline tickets
Bus tickets
Movie tickets
Entertainment products, Electronic items
Family, Home, Fashion & Beauty products
Sports products
17
At first people refuse to believe that a strange new

thing can be done,
...and then they hope it can be done,
...then they see it can be done,
...then it's done and all the world wonders why it
was not done before.
F H Burnett
17

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Digital Banking

Opportunity for Extraordinary Gains

Challenges Faced by Indian Banks

CASA growth = Transaction growth

Total transactions / active account

Digital transactions will dominate in 5 years

Small business claim banks are disinterested

Never / Don't remember

# of times digital channel was explained

Why is digital adoption low?

Customer acquisition productivity is stagnant

Digitization of sales is huge opportunity

First Time Right

Could public sector leap frog to a digital back end?

10-20% over staffing in administrative functions

Technology spend in India

New approach to technology

Iterative, short sprints

Seven hurdles in digitization

Multi stake holder

"Bank in a Bank" for creative destruction

Digital Attacker Bank

Target The Digitally

Digitise the legacy

Branch at the core;

Digital channels at the

Technological Initiatives launched by PSBs

Technological Initiatives launched by PSBs

Technological Initiatives launched by PSBs

DIGITAL BANKING: sbi INTOUCH

Instant opening of SB accounts with

Accounts are opened with an option for

Home branch selection, for the time

Instant enablement of Internet Banking and Mobile Banking.

Instant issuance of Debit Card.

Internet Banking Kiosks.

DIGITAL BANKING: sbi INTOUCH

Backend integration with Customer Re

Technological Initiatives launched by PSBs

STATE BANK ANYWHERE

Account info and Mini Statement

STATE BANK ANYWHERE

How to earn Reward Points ?

Where to use Reward Points ?

Technological Initiatives launched by PSBs

Technological Initiatives launched by PSBs

Technological Initiatives launched by PSBs

At first people refuse to believe that a strange new

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