Future of Banking, is Digital
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Future of Banking, is Digital February, 2016
Transcript of Future of Banking, is Digital
Future of Banking, is Digital
February, 2016
India is well positioned to become the fourth-largest economy in the world by 2025 with a
GDP growth rate of 7 - 8 % a year
Key Government Initiatives to support this growth:
Digital India, Make in India, Skill India, Start up India, Ease of doing business , Financial
Inclusion and Governance
10th
$ 1.71 tn 2010
8th
$ 2.18 tn 2015
6th
$ 3.44 tn 2020
India’s GDP growth projections
India : A Bright Spot
Banking to play a pivotal role in supporting an inclusive and sustainable growth model
4 D’s driving Banking sector
Developmental initiatives by Government Financial Inclusion Agenda Reforms in key sectors
Demographics Young & Digitally equipped population Design, Innovation & Creative Driven Entrepreneurship Urbanization along with economic growth in rural areas
Disruptive Technology Mobility Digitization Integration of Banking, Telecom
& Commerce
De-Regulation Improving financial intermediation Increasing Savings propensity Payments linked innovations
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2 4
3
Towards a Cashless Economy
Pradhan Mantri Jan Dhan Yojana (PMJDY) – 20.38 crore accounts opened
Pradhan Mantri Mudra Yojana (PMMY) - INR 87,000 crore disbursed
Rupay system - more than 17 crore Ru-Pay cards rolled out under the
PMJDY
Renewing capital formation & facilitating fresh investments
Uday scheme to improve power sector health
Huge Focus on Renewable Energy Sector, Manufacturing Sector, Start ups
7 pronged Indradhanush program to reform PSU Banks and Consolidation
of Smaller PSU Banks
Two pronged focus : Financial Inclusion & Growth Facilitation
Developmental initiatives by Government
Financial Inclusion
Reforms
De-Regulation supports sustainable financial inclusion with efficient payment & lending models
De-Regulations
Financial Intermediation
Improving Savings
Propensity
Payments led Innovation
Rapid increase in mobile penetration alongside Aadhaar makes it the
ideal tool for low-cost financial service delivery for realizing the
government’s JAM Vision
In the Under-banked segment, the UPI and BBPS schemes would be key
Savings to GDP Ratio at 30% down from 37%
Multiple measures taken to improve this ratio through, schemes viz.
gold monetization, deregulation of savings account rate
RBI issued licenses to 10 small banks and 11 payment banks in 2015 to
catalyze financial inclusion agenda
Use of high end technology and low cost operations
India to benefit on account of Demographic dividend
India’s Digital Demographics
50% of India’s population is younger than 24
In 2001, there were ~7 mn Internet users in India.
In the last 12 years, users have grown 25x at a compounded rate of over 30% year on year.
Today, 40 million Indians are online everyday, spending 40-45 hours over the Internet per month.
India is the second largest market for social networking giants such as Facebook and LinkedIn - 58,000 new users get connected on to a social network every day.
The next wave of growth in India’s online population to be more rural and mobile
Technology has become indispensable in
banking operations
Customers are seeking an Omni-channel,
seamless banking experience
Product innovation is of the utmost
importance because the product boundaries
have blurred, the number of players in the
sector has increased
The lines between Banks, Telecom companies,
Payment Banks, Ecommerce etc. are thinning
into a seamless “financial ecosystem”
Technology – The biggest Disruptor
Mobility driven Banking is the future
30 Average age of a
Mobile Banking user in India.
- Youngest Globally
1.5x Median income of
Mobile Banking User compared to Non
mobile Baking User (1.25x globally)
Speed, Convenience and 24 x 7
availability are top reasons for choosing Mobile Banking and
NOT cost advantage
Banks will have to be MOBILE FIRST to tap current & future customers “Fewer” but “larger” – digital branches in high density hub locations only
Mobile Banking Transactions increasing by 100 - 150% yoy
How are Banks INNOVATING ?
Basic Services Payments linked Value Added Services
Internet Banking/ App for basic services
SMS alerts
Balance checks etc
P2P
Bill payments
Virtual Wallets
POS Solutions
Social media banking Ecomm integration/ solutions
Big Data & analytics
Cloud & virtualization
Imaging / Video banking
Wearable / Biometric
YES BANK Preparedness
Offering live Near term (< 12 months) Mid term (12 - 24 months)
Understand customers through partner data and
offer relevant benefits
Focus on superior UX while designing customer
solutions
YES BANK adopting the ART of Digital Banking
Co-create Digital products and Payment Solutions
Acquire & Service customers on partner channels
Create Benefits in form of value adds
Blend – Opex/ Capex model to adopt best in class technology
Offer Payments on contemporary technologies like Smart
phones, Social Media & Wearable devices
Alliances
Relationships Technology
MOBILITY : Lets focus beyond “Smart-Phones”
YES BANK – Technology Alliances (an example)
Total Population 1260 million
Mobile Users 946 Million
Non Smart phone users 750 million
Currently India has ONLY 50
million Mobile Banking customers
These are mostly Smart phone users
Smart phone prices expected to fall
to affordable levels ONLY in 4-5
years
Hence “FEATURE PHONES”
present a significant opportunity
window
YES BANK FIRST & ONLY Bank to introduce SIM SLEEVE Tech with TAISYS to
provide full mobile banking experience to Feature phone user, without Internet/Data
YES MONEY – Frugal Innovation – Banking a Billion
Target Segment
Migrant Workers in Urban areas
Large Queues outside Public Sector Banks to Remit Money
Gap
Poor Service Delivery and income loss to Migrant workers
1) Poor Service to Workers
2) Loss of Valuable Time and Income for the Workers
Opportunity
Provide Flexible (at any time) and efficient service to Migrant workers at affordable cost
Solution! YES Money – Tie-up with Business Correspondents (BCs) to provide seamless Domestic Remittance Service to Customers at reasonable fee
Ecosystem Impact: 27 Million+ Transactions with a network of over 40,000 YES Money Business Correspondent Agents with total
transaction volume of INR 1143 Crores
Online shopping in India is estimated to multiply by over 11
times to USD 45 billion by 2020 - reflecting a CAGR of 50%
RBI has reported value and volume of Prepaid Payments
Instruments (PPI)
169% spurt in the value to INR 21,342 crores in FY15
118% rise in the volume to INR 31.4 crores in FY15
E-commerce companies in India face challenge of the COD
model - cost intensive and “unable to deliver” issues
YES BANK – Relationships
YES Bank’s SMART box solution is developed to
Build efficiencies in COD transactions by setting up smart boxes which are accessible for the
customers at vantage locations, round the clock
Digitize payments and offer value to both the E-commerce player as well as the end consumer
E-Commerce : Collaborators Not Competitor
YES BANK – Relationships
Partnership with a USD 6 Bn e-commerce giant to power their Wallet
YES BANK technology allows creation of virtual card, extending the reach of wallet to offline merchants as well
Working towards speedy & cost efficient payment models
Payments
Cost Efficiencies
First in the industry API Banking technology from YES BANK facilitates Instant Refunds for Customers
Superior customer experience coupled with working capital cycle reduction to 2 days from the previous 8 to 10 days
Instant seamless Banking is transforming the retail consumer’s experience
A far bigger opportunity lies in replicating seamless experience for Digital Transactions of Corporate Clients – B2B Banking
2.4 million+ fans
YES SME HIGHEST Followed
“SME focused LinkedIn Showcase Page by Bank” in India
Largest Bank in India on Twitter
2nd largest Bank in the World on Twitter
The Financial Brand – Jan 2016
HIGHEST Share of Voice, Twitter
Engagement & Social Mentions
Ranked No. 2 as the Most Social Bank
in India
Simplify 360 - June 2015
Competitive growth – Banking Category Competitive growth Across Categories
BANKS Fans Followers Followers
YES BANK 24,03,503 (4) 7,02,734 (1) 68,256 (5)
AXIS Bank 31,62,804 (3) 91,778 (4) 1,77,606 (1)
ICICI Bank 44,54,219 (2) 65,792 (5) 1,51,524 (2)
HDFC Bank 22,847,88 (5) 60,343 (6) 1,14,897 (3)
Kotak Mahindra Bank 6,26,482 (6) 1,11,902 (3) 44,094 (6)
State Bank of India 44,57,613 (1) 4,04,708 (2) 1,01,012 (4)
BRANDS Followers
YES BANK 7,02,734 (1)
Flipkart 5,33,512 (2)
TATA DOCOMO 4,90,624 (3)
Samsung Mobile 2,80,609 (4)
HDFC Life 2,01,788 (5)
India’s MOST FOLLOWED BANK 7,00,000 +
India’s MOST FOLLOWED BANK
10,000 +
*All numbers are as on 9th Jan 2016
Building the brand through Social Media
New age decisions influenced by Internet
THANK YOU
