Making The Channels Deliver: March 24, 2011

Making the Channels
Deliver
March 24, 2011

Agenda
Changing Banking Paradigm
Growing Importance of Channels
Channels of Future
Making the Channels Deliver
Challenges
In Conclusion
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Agenda
Channels of Future
Challenges
In Conclusion
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Market Realities – In Past
In past,
Regulatory restrictions helped keep
competition at bay
Proximity to potential customers was
Market
the key competitive advantage
Realities
Customers were satisfied with one
branch and restrictive timings
Easy comparison of products &
services was not possible
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New Banking Paradigm
Ban
k
Customer
Anywhere Anytime Anyway customer convenience

Online banking
24/7 service
8 to 8 branch service
365 days branch service
Instant comparison of products and services
Reduced Turn Around Time
Enriched interactivity through customized services
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New Banking Paradigm
Customer
Bank
Redefine
Traditional concepts
Role of the branch
Business processes
Wider and more focused market reach
Reduced distribution costs
Cross Sell
Leverage customer database
Customer acquisition / retention
Credit screening and data mining
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Agenda
Channels of Future
Challenges
In Conclusion
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Growing importance of
channels
Reach out to new customers

Reach out to remote geographies
Development Improve our existing offerings by
of Alternate providing faster processing through
Channels is
cost effective solutions
Important to
Deliver new products
Data collection and mining
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Extended Reach by Multi-channel
Offerings
Agent
Multi-channel delivery Network
model
m-Banking Call
Branch centre
Internet ATM Network
Bank Network
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Development Drives Growth
Television Electricity
(1926) (1873)
100
Microwave Radio
(1953) (1905) Telephone
(1876)
80 VCR
Percentage of Ownership
(1952)
Automobile
(1886)
60
PC
40 (1975)
Internet
Cell Phone (1975)
(1983)
20
0 20 40 60 80 100 120
Source-- Microsoft Years Since Introduction
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Push & pull strategy…
to
s
u
C
r
e
m
s
n
tra
io
c
m
d
e
v
o
t  Larger deposit
,
s
M
T
A market share
ra
te
In
d
le
a
c
tr
n with fewer
branches
 Freeing branch
resources for
P
s
e
c
ro
g
in cross-selling
d
e
v
o
m
t Central & Regional and
s
e
c
ro
p
g
in Processing Hubs non-routine
s
b
u
h servicing
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Redefining Concept of Reach @
ICICI
 We redefined the meaning of “reach”
 Transaction banking
Anywhere, Anytime banking
Pioneered electronic channels
 Retail finance
Offer “home delivery” of loans
Reach @ ICICI  Created an infrastructure of
Bank Branches - 564
ATMs - 1950
Call centre - 2948 seats
Delivery Channels * - 4396
Feet on street - 39338
Manufacturer tie-ups - 90
* Delivery Channels defined as the number of DMA,

princeDealers
dudhatra- and other product delivery channels for retail
9724949948
assets
Transforming channel usage…
Share of Share of
Channel transactions in transactions in
March 2000 March 2005
Branches 94% 25%
ATMs 3% 38%
Internet &
mobile
2% 27%
Call centre 1% 10%
…scaling up to handle rapid volume

growth
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Growing customer base & transactions
March March March March
Channel
2001 2002 2004 2005
Retail
customers (mn)
1.9 3.0 8.0 12.5
Internet
customers (mn)
0.5 1.1 5.8 8.2
ATM
transactions 0.1 0.2 0.5 0.6
(mn/ day)
Call centre
contacts 0.02 0.05 0.15 0.17
(mn/ day)
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Agenda
Channels of Future
Challenges
In Conclusion
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Mobile Financial Services
High speed, User Friendly
Features
 Complete Financial status
information like account balance,
transaction history, stock quotes,
etc. and processes requests like
‘stop cheque’, etc.
 Small denomination transactions
executed instantly
Applications
 Useful for small transactions in
places like petrol pumps, toll
booths, etc.
 Mobile to mobile payments
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Octroi Cards
Specific and Secure
Features
 Closed user group card that allows
transfer only with select merchants
Octroi Card  In use at Ahmedabad Municipal
Corporation for Octroi collections
Applications
 Used by transport agencies for
paying octroi. Ensures that there is
no misuse
 Couldbe combined with other cards
for multi-service usage
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Stored Value Card
Offline, low risk, low cost
Features
 Prepaid cash card with value
stored in the card
 Ability to recharge
 Eliminates cash replenishment
Applications
 Travel cards
 Public Transportation
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Enhanced POS Usage
Features
 Banking Transactions
 Balance Enquiry
 Cash Withdrawal
 Cash Deposit
 Utility payment
 Proprietary payment devices –
PCs/Cash Registers
Applications
 Wide reach to provide financial
transactions
 Increased customer convenience
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Agri-Business Kiosks
Multipurpose, Cost Efficient, Wide Reach
Features
 Wireless/ telephone line based internet
access. Could be solar-based for India
Applications
 Extendreach of our products to rural
customers in remote areas at low costs
 Supplement by value-added services
like video-conferencing for loan
disbursal, online health checkup for
insurance, etc.
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Handheld Devices
Convenient, authentication, fast processing
Features
 Storage as well as processing
capabilities
 Easyto carry and useful for offline
processing
Applications
 Canbe used by Agents to carry out
transactions on behalf of the users
 Idealfor simple processing like
generating insurance illustrations
and rural banking
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Agenda
Channels of Future
Challenges
In Conclusion
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Creating superior channel
network
 Foundation of creating superior channel is

superior insight into customer behaviour
Creating
 Channelrequirement for delivery of different
Superior
products vary with
Channel
Customer Type
Network
Customer Behaviour
Customer Profitability
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Customer Centric Architecture
Multi-product view to the
customer across
different channels like
Branches, Web and Call
Center
Consistent
Consistent view identification of
across the customer
channels across the
channels
Offer customized
products and services
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Channel Effectiveness
 Thechannel should be readily available to

customers
Location
 1950 ATMs spread across the
Availability country for easy accessibility
Time
 24X7 ATM access
 24x7 Internet Banking access
 Extended 8 to 8 branch access
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 Simplicity
Technology should be simple and user-
friendly
Customer should feel comfortable with
Simplicity the technology
 Simpler process for authentication
and Verification
 Regional language ATMs
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 Expected service levels to be met at all

times
 Customer confidence must be built over a
period of time
When ATMs were introduced managing
Reliability cash replenishment to ensure ready
availability of cash at any time was of
utmost importance
 Sizing systems for Peak load where the
difference between peak and lean periods
can widely vary
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Customer should not have conflicting

experiences across various channels
Need to provide integrated platform that
Consistency
can accept information from various
other platforms used by various product
groups of the Bank
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Channels must continuously strive to

add greater value to customers in terms
of services
 Mobile top-ups at ATMs
Value-
added
services Benchmark innovative products /
services across the world to add newer
perspectives to electronic transactions
 Card to Card funds transfer
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Customer education on
Channel potential
Channel usage through hand-holding
Customer for the initial period
Education
and Channel migration plan
Migration Plan Clear plan on migrating customers
and scale-up of new channel
Accordingly incentivise customers to
shift to the newer channels
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Continuous improvement to remove

customer inconvenience
Avoid calls at odd hours

Avoiding
Inconvenience Avoid mobile alerts at odd hours
Process and systems
improvements for reducing
prolonged wait times at Phone
Banking
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Agenda
Channels of Future
Challenges
In Conclusion
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Challenges
Integration
with back-end to deliver a
one-bank experience to the customer
Integration
across
channels Across various channels
Across various product lines
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Challenges
Seamless service integration between

Service the front-line (branches/ Phone
integration Banking) and back-office (Operations
units)
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Channel Integration
Channels
Product Systems
Internet
Banking Banking
Branches
Credit Cards Customer
AT
M
Auto Loans ATMs

Middleware
Home Loans Cyber
Centers
Bonds Call
Center
Web Trade m-Banking
Agents
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Challenges
Complementary placement of various

Channel channels – branches / ATMs to be
placement located judiciously to ensure
maximum coverage at minimum costs
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Challenges
Managing the logistics involved in

servicing the customers across the
various channels
Cash filling and replenishment across
Logistics 1950 ATMs even at remote locations
Handling drop-box requests at every
nook and corner of country
8 to 8 banking
Managing huge number of Phone
Banking seats
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Challenges
Added convenience Vs. compromise on

security or quality aspects
Trade off
between
Latest technologies and complex logics
security,
convenience to avoid fraud Vs. Simplicity and user-
& cost friendliness
Scale Vs. Affordable cost
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Challenges
Training of front-line staff manning all

service points across branches, Phone
Employee Banking, sales force to handle
Training and customer queries and service
Customer expectations
Education
Educating customers to encourage
multiple channel usage
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Agenda
Channels of Future
Challenges
In Conclusion
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In Conclusion
Multi-channel is now a reality

Recipe to Potential
for further introduction of
Develop new channel types
Successful Each new channel should add value
Channel both to Bank and to Customer
Each new channel should make
economic sense
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In Conclusion
Understand customer’s transaction
behavior and underlying attitude
Use ability of e-channels to attract new
Recipe to customers and create differentiation in
Develop market
Successful Do not lose focus from personalized
Channel interactions to counteract decreased
loyalty among remote customers
Assess and review channel migration
strategy on an ongoing basis
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Channel Delivery scorecard
Zone of Competitive
Opportunity •Responsiveness
•Personalization •Competence
•Relationship (Products & Service)
Mapping Zone of Competitive
•Courtesy Intensity
•Easeof use and simplified
•Aesthetics access
•Simplified Account
Aggregation Service
•Quick Support Zone of Competitive Necessity

•Basic
si t aS evi r D ot ytili b A
Functions •‘Other'Channel Access •Security

•Real Time - •Reliability
•Accessibility transactions
Efficiency •Availability – Uptime •Accuracy
Zone Strategic
•Speed
Focus
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Thank You
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Difference between Lean &
Peak days – ATM/POS
transactions

Month Lean Day Peak Day % Increase
Nov, 2004 605236 1027807 69.82
Dec, 2004 684346 1016754 48.57
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Making the Channels

March 24, 2011

Growing Importance of Channels