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Making the ChannelsDeliver

March 24, 2011


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Agenda

Making the Channels Deliver

Changing Banking Paradigm

Growing Importance of Channels

Channels of Future

In Conclusion

Challenges

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Agenda




Channels of Future

In Conclusion

Challenges



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Market Realities In Past

In past,Regulatory restrictions helped keep

competition at bay

Proximity to potential customers was

the key competitive advantageCustomers were satisfied with one

branch and restrictive timings

Easy comparison of products &

services was not possible

MarketRealities



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New Banking Paradigm

Customer

Anywhere Anytime Anyway customer convenience

Online banking

24/7 service8 to 8 branch service

365 days branch service

Instant comparison of products and services

Reduced Turn Around TimeEnriched interactivity through customized services

Bank



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New Banking Paradigm

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

Customer



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Agenda




Channels of Future

In Conclusion

Challenges



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Growing importance ofchannels

Reach out to new customers

Reach out to remote geographies

Improve our existing offerings byproviding faster processing through

cost effective solutions

Deliver new products

Data collection and mining

Developmentof AlternateChannels isImportant to



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Extended Reach by Multi-channelOfferings

Branch

Network

m-Banking

ATMNetwork

InternetBank

Callcentre

Multi-channel deliverymodel

Agent

Network

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Development Drives Growth

Percenta

geofO

wnership

PercentageofO

wnership

100100

8080

6060

4040

2020

00

ElectricityElectricity

(1873)(1873)

TelephoneTelephone

(1876)(1876)

AutomobileAutomobile

(1886)(1886)

TelevisionTelevision

(1926)(1926)

RadioRadio(1905)(1905)

VCRVCR

(1952)(1952)

MicrowaveMicrowave(1953)(1953)

1001008080606040402020 120120

Years Since IntroductionYears Since Introduction

PCPC(1975)(1975)

InternetInternet(1975)(1975)Cell PhoneCell Phone

(1983)(1983)

Source-- Microsoft

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Push & pull strategy

Customer

transactionsmovedtoATMs,

Internetandcallcentre

Central & RegionalProcessing Hubs

Processingmovedtoprocessing

hubs

Larger depositmarket share

with fewer

branches Freeing branch

resources for

cross-sellingandnon-routineservicing

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Redefining Concept of Reach @ICICI

We redefined the meaning of reach

Transaction bankingAnywhere, Anytime banking

Pioneered electronic channels

Retail finance

Offer home delivery of loans

Created an infrastructure of

Branches - 564

ATMs - 1950

Call centre - 2948 seats

Delivery Channels * - 4396Feet on street - 39338

Manufacturer tie-ups - 90

Reach @ ICICIBank

*Delivery Channels defined as the number of DMA,

Dealers and other product delivery channels for retailassets

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Transforming channel usage

Share of

transactions inMarch 2000Channel

2%Internet &

mobile

3%ATMs

94%Branches

Share of

transactions inMarch 2005

27%

38%

25%

Call centre 10%1%

scaling up to handle rapid volumegrowth

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Growing customer base & transactions

ATMtransactions(mn/ day)

Internet

customers (mn)

Retailcustomers (mn)

Call centrecontacts(mn/ day)

March2001

ChannelMarch2004

March2002

0.1

0.5

1.9

0.5

5.8

8.0

0.150.02

0.2

1.1

3.0

0.05

March2005

0.6

8.2

12.5

0.17

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Agenda




Channels of Future

In Conclusion

Challenges

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Mobile Financial Services

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, tollbooths, etc.

Mobile to mobile payments

High speed, User Friendly

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Octroi Cards

Features

Closed user group card that allows

transfer only with select merchants

In use at Ahmedabad Municipal

Corporation for Octroi collections

Applications

Used by transport agencies for

paying octroi. Ensures that there is

no misuse

Could be combined with other cardsfor multi-service usage

Specific and Secure

Octroi Card

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Stored Value Card

Features

Prepaid cash card with value

stored in the card

Ability to recharge

Eliminates cash replenishment

Applications

Travel cards

Public Transportation

Offline, low risk, low cost

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Enhanced POS Usage

Features

Banking Transactions

Balance Enquiry

Cash Withdrawal

Cash Deposit

Utility paymentProprietary payment devices

PCs/Cash Registers

Applications

Wide reach to provide financial

transactions

Increased customer convenience

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Agri-Business Kiosks

Features

Wireless / telephone line based internet

access. Could be solar-based for India

Applications

Extend reach of our products to ruralcustomers in remote areas at low costs

Supplement by value-added services

like video-conferencing for loan

disbursal, online health checkup for

insurance, etc.

Multipurpose, Cost Efficient, Wide Reach

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Handheld Devices

Features

Storage as well as processing

capabilities

Easy to carry and useful for offline

processing

Applications

Can be used by Agents to carry out

transactions on behalf of the users

Ideal for simple processing likegenerating insurance illustrations

and rural banking

Convenient, authentication, fast processing

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Agenda




Channels of Future

In Conclusion

Challenges

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Creating superior channelnetwork

Foundation of creating superior channel is

superior insight into customer behaviour

Channel requirement for delivery of different

products vary with

Customer Type

Customer Behaviour

Customer Profitability

Creating

SuperiorChannelNetwork

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Customer Centric Architecture

Multi-product view to theMulti-product view to the

customer acrosscustomer across

different channels likedifferent channels likeBranches, Web and CallBranches, Web and Call

CenterCenter

Offer customizedOffer customized

products and servicesproducts and services

Consistent viewConsistent view

acrossacross

channelschannels

ConsistentConsistent

identification ofidentification ofthe customerthe customer

across theacross the

channelschannels

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Channel Effectiveness

The channel should be readily available to

customers

Location

1950 ATMs spread across the

country for easy accessibility

Time

24X7 ATM access

24x7 Internet Banking access

Extended 8 to 8 branch access

Availability

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Simplicity

Technology should be simple and user-

friendly

Customer should feel comfortable with

the technologySimpler process for authentication

and Verification

Regional language ATMs

Simplicity

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Expected service levels to be met at alltimes

Customer confidence must be built over a

period of time

When ATMs were introduced managingcash 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 periodscan widely vary

Reliability

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Customer should not have conflicting

experiences across various channels

Need to provide integrated platform thatcan accept information from various

other platforms used by various product

groups of the Bank

Consistency

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Channels must continuously strive toadd greater value to customers in terms

of services

Mobile top-ups at ATMs

Benchmark innovative products /

services across the world to add newer

perspectives to electronic transactions

Card to Card funds transfer

Value-

addedservices

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Customer education onChannel potential

Channel usage through hand-holding

for the initial period

Channel migration plan

Clear plan on migrating customers

and scale-up of new channel

Accordingly incentivise customers toshift to the newer channels

Customer

Educationand

Migration Plan

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Continuous improvement to remove

customer inconvenience

Avoid calls at odd hours

Avoid mobile alerts at odd hours

Process and systems

improvements for reducing

prolonged wait times at Phone

Banking

AvoidingInconvenience

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Agenda




Channels of Future

In Conclusion

Challenges

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Challenges

Integration with back-end to deliver a

one-bank experience to the customer

Across various channels

Across various product lines

Integration

acrosschannels

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Challenges

Seamless service integration between

the front-line (branches/ Phone

Banking) and back-office (Operationsunits)

Service

integration

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Channel IntegrationChannels

Middleware

Banking

Credit Cards

Auto Loans

Home Loans

Bonds

Web Trade

Product Systems

AT

M

Agents

CallCenter

CyberCenters

InternetBanking

ATMs

Branches

m-Banking

Customer

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Challenges

Complementary placement of various

channels branches / ATMs to belocated judiciously to ensure

maximum coverage at minimum costs

Channelplacement

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Challenges

Managing the logistics involved inservicing the customers across the

various channels

Cash filling and replenishment across

1950 ATMs even at remote locationsHandling drop-box requests at every

nook and corner of country

8 to 8 banking

Managing huge number of Phone

Banking seats

Logistics

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Challenges

Added convenience Vs. compromise on

security or quality aspects

Latest technologies and complex logicsto avoid fraud Vs. Simplicity and user-

friendliness

Scale Vs. Affordable cost

Trade offbetween

security,convenience

& cost

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Challenges

Training of front-line staff manning all

service points across branches, Phone

Banking, sales force to handle

customer queries and service

expectations

Educating customers to encourage

multiple channel usage

EmployeeTraining and

CustomerEducation

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Agenda




Channels of Future

In Conclusion

Challenges

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In Conclusion

Multi-channel is now a reality

Potential for further introduction of

new channel types

Each new channel should add value

both to Bank and to Customer

Each new channel should make

economic sense

Recipe toDevelop

SuccessfulChannel

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In Conclusion

Understand customers transaction

behavior and underlying attitude

Use ability of e-channels to attract new

customers and create differentiation in

market

Do not lose focus from personalized

interactions to counteract decreased

loyalty among remote customers

Assess and review channel migration

strategy on an ongoing basis

Recipe toDevelop

SuccessfulChannel

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Channel Delivery scorecard

BasicBasic

FunctionsFunctions

AccessibilityAccessibilityEfficiency

Zone

Abilit

y

to

Driv

e

S

atis

Zone of Competitive

Opportunity

Zone of CompetitiveIntensity

Zone of Competitive Necessity

StrategicFocus

Quick SupportQuick Support

Simplified AccountSimplified Account

Aggregation ServiceAggregation Service

Ease of use and simplifiedEase of use and simplifiedaccessaccess

CompetenceCompetence

(Products & Service)(Products & Service)

ResponsivenessResponsiveness

AestheticsAesthetics

CourtesyCourtesy

RelationshipRelationship

MappingMapping

PersonalizationPersonalization

Other' Channel AccessOther' Channel AccessReal Time -Real Time -transactionstransactionsAvailability UptimeAvailability UptimeSpeedSpeed

SecuritySecurityReliabilityReliabilityAccuracyAccuracy

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Thank You

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Difference between Lean &


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Difference between Lean &Peak days ATM/POStransactions

Month Lean Day Peak Day % Increase

Nov, 2004 605236 1027807 69.82

Dec, 2004 684346 1016754 48.57

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