Venkatesh TAPMI
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Transcript of Venkatesh TAPMI
Paidisetty VenkateshTAPMI
Executive Summary:
Problem StatementAnalyze the Digital vs Branch banking and come up with new products and a clear road map
Methods used
• Industry Analysis• Primary Research• Secondary Research• Product Analysis
Recommendations
• Making banking outlets available or closer to the villagers• Currently there were no attractive deals in the products offered• Creating product-specific awareness to ensure greater usage of these products• Creating greater awareness about banking services among women and among rural
households with relatively low incomes.• Personal Finances Management
Economy & Industry Analysis:
India's banking industry could become the 5th largest banking sector globally by 2020 and the third largest by 2025.
The deposits growing at a CAGR of 21.2 % in the period FY 06–13, there has been evident growth in the overall industry.
According to CRISIL forecasts till 2016-17:- Aggregate car and UV loan disbursements will grow at a CAGR of 18-20 %- Housing loans disbursements to grow at CAGR 16%- Real annual disposable household income in rural India grow at CAGR of 3.6 %
Rising middle class population as per NCAER forecasts : -Increase from 13.1% in 2011 to 20.3% in 2015-16 - This attracts them with attractive offers as the other financial investment avenues
Balance in customer profitability v/s customer satisfactionIncrease in popularity of internet and mobile banking with customer relationship management (CRM) and data warehousingAnticipated to drive the next wave of banking technology in the countryPromote new-age banking models to aid innovation: This includes technology firms trying to set up digital banks, which will lead to
• Disruptive innovation• Huge competition• Technology and innovation
Our View
SWOT analysis of Digital Banking:
Technological aspects should be handled efficiently else it would impact the customer base
Security aspects are directly related to monetary losses.
Technical glitches would create hurdles for
the transactions Huge dependency on internet connection for
availing any service Possibility of Security threats Technology underpins user-friendliness and
customer interaction
Huge potential to attract new audience Knowing customer preferences and thinking helps bank to
serve better Offers substantial benefits to banks for exploiting with new products
Improvements in user-experience through interactive and rich visualizations
Enhanced digital security services due to advances in mobile devices & networks seamless end-to-end experience with new channel integration technologies Rise of social media enabled control of ‘Brand message’ from business to customers
Strengths Weaknesses
Opportunities Threats
Banks should consider four main aspects of a robust digital offering:1. Customer attitudes and behaviour are changing2. Digital is preferred globally3. Digital is a part of Generation Y’s lifestyle and this is the key time for them to decide on their primary banking relationship.4. Digital is evolving – technology devices and software all serve to disrupt traditional means of communication. Simultaneously, each brings opportunity.
SWOT analysis of Branch Banking:
Strengths•Increased
customer satisfaction due to direct face-to-face interaction
•Availability in tier 1 and tier 2 cities with many ATM branches
•Supports the bank with cutting edge technologies in its operation
•Appealing ambience to customers for offering services
Weakness• Does not provide seamless services to customers• Time consumption during transaction process• Limited number of branch banks & ATMs• Inexperienced staff• High cost for labor and infrastructure facilities• Increased customer complaints due to ineffective
customer services• Incur high service charges
Opportunities• Penetrate into digitalization of banking services• Enter into untapped rural markets• Increase number of product offerings• Increase the number of branches
Threats•Intense
competition for market development in nearby branches
•Decline in economy
•Increased capital gains & taxes
Branch Banking SWOT
Research Methodology
Step 1
•Define objective :Why customers prefer click or brick formats
Step 2
•Exploratory Research – Focus Group Discussion was conducted among 8 respondents to identify major factors affecting banking decisions
Step 3
•Questionnaire preparation
Step 4
•Online Survey. Results collected from 139 respondents in the age group of 18 to 50+ years
Step 5
•Analysis/ Evaluation of data
Step 6
•Presentation of Findings
Primary Research: Branch Banking
18-2520%
26-357%
36-4510%
46-5023%
>5040%
Branch Banking - age group wise distribution
People aged above 46 preferably use branch banking compared to other age groups.Primary research indicates more than 50% users of Branch banking are Gen X people. Privacy factor is considered as the most important factor when they go for branch banking. Relative importance shows 88 out of 139 respondents, consider privacy as most important.
Insights
21.00%
22.00%
23.00%
24.00%
25.00%
26.00%
27.00%
RANKING OF FACTORS FOR BRANCH BANKING
Privacy Customer Service Customer SatisfactionNear by branches Face to face interaction
Face to face interaction
Near by branches
Customer Service
Customer Satisfaction
Privacy
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
40
45
70
74
88
33
35
26
23
8
29
26
11
10
13
28
25
25
19
13
9
8
7
13
17
IMPORTANCE OF FACTORS - BRANCH BANKING
Very Important Important Neutral Not important Not Very Important
Primary Research: Digital Banking
18-2549%
26-3531%
36-4512%
46-506%
>502%
ONLINE BANKING- AGe GROUP DISTRIBUTION
18-25
55%26-35
25%
36-45
15%
46-505%
MOBILE BANKING-AGE GROUP DISTRIBUTION
S e c u r i t y
C o n v e n i e n c e
T i m e
U n a v a i l a b i l i t y o f n e a r b y b r a n c h e s
H e l p
T r a n s a c ti o n c o m p l e t e i o n
R e s p o n s i v e n e s s
98
76
66
39
47
68
78
7
26
31
39
41
27
24
5
10
11
33
32
19
9
12
13
18
18
16
16
16
17
14
13
10
3
9
12
Importance of factors-digital bankingVery Important Important NeutralNot important Not Very Important
21.00%
22.00%
23.00%
24.00%
25.00%
26.00%
27.00%
28.00%
RANKING OF FACTORS - DIGITAL BANKING
Security ConvenienceTime Unavailability of nearby branchesHelp Transaction completeionResponsiveness
Targeted customers in the age group of 18 to 35 years are more receptive to the online bankingCustomers in the age group of 18 to 35 years preferring a mobile medium of banking Of all the factors which play an important role in digital banking, Security is the most predominant one followed by responsiveness and convenienceRelative importance shows 78 out of 139 respondents, consider responsiveness as most important.
Insights
Financial Product Comparison:
HDFC
• Women’s Saving Account
• Kids Advantage Account
ING Vysya ICICI
• Advantage Women’s Saving Account
• Young Stars Saving Account
HDFC
• Two Wheeler Loans• Car Loans
ING Vysya ICICI
• Commercial Vehicle Loans
• Car Loans
HDFC
• Regular Fixed Deposit
ING Vysya ICICI
• Fixed Deposits
ING Vysya is not targeting Women and kids, Also the names given to various Savings Account wont create any resonating and empathizing impact on potential customer
Two wheeler loans have strong rural demand and also according to CARE two wheeler industry likely to register a growth of 8-9 per cent in FY14. Including Vehicle loans in the loan portfolio is the need of the hour to increase sales.
FD Plus offered by ING Vysysa
PERSONAL FINANCES MANAGEMENT
+ Money IN28,996 INR
DATE: Sept 1st 2014-Sept 25th 2014
- Money OUT32,033 INR
Dashboard
31%
6%
11%
38%
14%
Food and GroceriesEntertainmentClothing/ShoesTravel and Rental ExpensesOthers
So You overspent !!!3037 INR
90%Food and Groceries
133%Entertainment
142%Clothing and Shoes
80%Travel and Rental Expenses
Budgeted Expenses Vs Actual ExpensesSpending
Recommendations:
Making banking outlets available or closer to the villagers
Creating product-specific awareness to ensure greater usage of these products
Creating greater awareness about banking services among women and among rural households with relatively low incomes
Formulation of products linked to income status of the borrowers thereby providing them opportunities for using banking products and services
Personal Finances Management
To increase the awareness of the products, need to do aggressive marketing in all the channels
Road Ahead:
Creating greater awareness about banking services among women and among rural households with relatively low incomes
Creating product-specific awareness to ensure greater usage of these products
Formulation of products linked to income status of the borrowers thereby providing them opportunities for using banking products and services
Making banking outlets available or closer to the villagers
To increase the awareness of the products, need to do aggressive marketing in all the channels
Sources
• KPMG report on Indian Banking – The Engine for Sustaining India’s growth agenda
• http://www.ibef.org/industry/banking-india.aspx
• www.rbi.org
• www.ingvysyabank.com
• www.hdfcbank.com
• http://info.shine.com/industry/banking-financial-services/8.html