Digital Banking vs. Branch Banking (Ashish Kumar)
- 1. Branch banking vs. Digital banking and how to go forward Presented by: Ashish Kumar Second year Student of Asia Pacific Institute of Management New Delhi 2K13A19@asiapacific.edu ashish_patial@yahoo.com
- 2. 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. • Capture more customers with Digital Banking. • Road map for ING VYSYA Digitalization
- 3. 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
- 4. • 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.
- 5. • 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 secure and make logging in and use much easier than the website. Consumers use these apps 30% more frequently than any other app type.
- 6. Branches are expensive and un 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
- 7. 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
- 8. The path to next gen digital banking EXTENDbusiness models ENGAGE stakeholders ENABLE through technology Customer Reach • Channel Omnification • On-the-go banking • Preferred channels Increase speed • Applications modernization • Cloud / SaaS • Selective outsourcing Remote Access Tools • Remote deposit capture • Digital vaults and wallets • Decoupled debit cards Customer Experience • Unified experience • Self-service • Faster navigation Improve efficiency • Business process re-engineering • Process automation • Reduce operating costs Alternate Models • NFC / QR Codes / P2P • Advisory through PFM • Gamification Sales & Marketing • Analytics and contextual services • Predictive selling • Loyalty Workforce Enablement • Digital sales tools • Deliver faster & better service • BYOD & remote availability Products & Pricing • Product Packaging & bundling • Simulations • Relationship based pricing
- 9. Digital Transformation Bank 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 Seconds Web page slow to load 8 Seconds Web page doesn’t load 18 Seconds 80% customers quit 30 Seconds Interested Unhappy Annoyed Dissonant
- 10. 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
- 11. Future Road Map for ING VYSYAHappening NowSubject GamificationNiche Targeting, Personalization / Customization, Loyalty, Location- Based offers Content & Consumer Centricity Comparisons, ReviewsVideo & 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 MobileOmni-Channel, Direct ServiceMulti Channels & Devices E-VaultsExpedited 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
- 12. 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
- 13. 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
- 14. 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
- 15. Conclusion Digital 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