Charanprit Bhela MET Mumbai

The ING Case Study Competition

Digital Banking vs

Branch Banking

Executive Summary

• This presentation highlights the importance of digital banking and how it has an edge over branch banking. This is explained with the help of a SWOT Analysis of the both Branch and Digital Banking.

• Comparative analysis of the products

• Since ING Vysya Bank is already into Digital Banking, this presentation is an attempt to provide with a roadmap which can help the Bank to become more digitized.

• For this purpose some additional features have been explained for the Digital platform.

• This will not only help in increasing customer base, but will also help it improve on their customer services.

Digital Banking Industry

• The banking industry is increasingly becoming boundary-less owing to

customers who are ’omni-present’ (accessible anywhere and through any

channel).

• For banking industry, where products are getting commoditized, customer

experience has evolved as a True differentiator rather than a function as it was

thought earlier.

• Banks are increasingly focusing on taking steps to develop deeper

relationships with their customers .

• Banking firms want to differentiate themselves based on customer experience

with online, social media, mobile and cross-channel initiatives getting the top-

most priority for customer experience improvement

Growth Predictions

TODAY•Optimized branch network

and contact center

• Enhanced digital channels

•Need-based offerings and

consistent sales behaviours

•Basic multichannel integration

“Next Generation Banking” models

•The “Intelligent Multichannel” Bank- “My bank

effectively engages with me on my real financial

needs.”

•The “Socially Engaging” Bank- “My bank engages

with me where I spend time.”

•The “Financial Non-Financial Digital Ecosystem”

Bank- “My bank gives answers to my needs,

providing easy access.”

* To provide services to rural areas* Security soft to track the fraud and CIS

SWOT OF BRANCH BANKING

SWOT Analysis of Branch Banking

SWOT Analysis of Digital Banking

Strengths

•Internet banking does not consider limits about the time in contrast of the traditional banking•It supports many bank functions including account inquiries, transfers and automatic payments, it reduces the cost of the banks and clients•Superior technology allows Digital banking to better meet the needs of their customers in ways that competitors can’t imitate•Lower costs lead to higher profits for Online banking•For Youngsters and working people Internet Banking is user friendly and easy to access

Weakness

•Internet banking remains in product-centered, rather than customer-centric •Internet banks need talents who are familiar with both banking business and a good network. At present the banks lack those compound talents•Cost incurred for setting up digital platform for bank is huge.•Weak research and development in India compared to foreign countries•Online banking can charge higher prices for their products, because consumers can’t get those products elsewhere

Opportunities

•Online banking only needs to target new customers in order to grow their business•Online banking can market to a much wider audience for relatively little expense•Greater innovation can help Online banking to produce unique products and services that meet customer’s needs•India being a Emerging market would enable Online banking to quickly expand•New markets allow Online banking to expand their business and diversify their portfolio of products and services

SWOT Analysis of Digital Banking

Threats

•Internet banking involves a lot of legal issues•Changes in government rules and regulations can negatively affect Online banking•Cyber crime threats include spyware (key loggers, malware), phishing, viruses, and hacking.

Comparison of Products

1) Savings Account

ING VYASA BANK AXIS BANK

NO OF PRODUCTS Orange savings bank Zink savings bank Zwipe savings bank Platina savings bank Basic savings bank ac Senior savings bank ac

Prime savings ac Women savings ac Pension savings ac Insurance agent ac Youth account Prime plus savigs bank ac

Primary card annual fees Rs.199 p.a Rs 150 p.a

Quarterly average balance required Rs.5000 Metro and urban location-rs 10000Rural- Rs 2000

Rate of interest paid 4% 4.00% on all accounts

Service Charges for Non-Maintenance of Quarterly Average Balance (QAB) Less than Rs.3,000 - Rs.900/-

Rs.3,000 – Rs.9999 - Rs.750/-

2) Current account

ING VYASA BANK AXIS BANK

NO OF PRODUCT General current account Comfort current account Advantage current account Flexi current account Orange current account Institutional current account Platina current account

Resident foreign currency account

Regular current account Exclusive current account Current account by industry

Cash withdrawal per day

Rs 50,000 per day Upto 1 lac per day other than home branch

Home branch deposit facility

Free upto 1 lac per month Free upto 2 lacs per month

Transactional charges Rs. 3 /per entry Rs.2.5/per entry

Comparison of Products

3) Fixed deposit

ING VYASA BANK AXIS BANK

Tenure Min 7 days and max 10 years Min 6 months

Penalty at premature withdrawal Premature withdrawal is allowed

at a nominal penalty of 1% on the applicable rate.

1%

4) LoansING VYASA BANK AXIS BANK

Types Home loan Personal loan Gold loan Loan against securities Loan against property

Home loan Personal loan Gold loan Loan against property Loan against fixed deposit Car loan Educational loan Loan against share

Comparison of Products

Roadmap for ING Vysya to move towards Digital Banking

1) Building on enhanced multichannel experiences:

To engage customers and meet their financial needs effectively

2) Leveraging Social media:

Interactions to increase customer intimacy (the “Socially Engaging” Bank)

3) Placing the Bank at the center:

Selling financial and non-financial services, leveraging in particular the

power of mobile technology

Post

Bran

ch

ATM

Call

Cent

er

Rich Experience User Centricity

Online Offline

Web

site

Mes

sagi

n

g Mob

ile A

pp

Emai

l

Voic

emai

l

SMS

Soci

al

Med

ia

Prox

imit

y/ Rem

ote

Paym

ent

Mobile Wallets

Mobile Payments

Traditional DigitalSeamless Channel

SwitchCollaboration

Social Monitor

Social CRM

Customer/Channel Performance

Unstructured Data ManagementCustomer Data

Integration

Alternate Currency

Payment Processing

e/m RetailersBrick-n-mortar Retailers

Core Processing

Information Mgmt

New Channel Integration

Additional Benefits to the Digital Platform

•Pockets/WalletsPockets will enable Bank offer you the convenience of banking on Facebook and your smart phone. This will be first-of-its kind app uses Facebook credentials to log into your account on Facebook and mobile to make banking fun and social.

•Chat and Instant MessagingChat and Instant Messaging service will provide customers will 24*7 service .In this service customers can solve their queries related to any products at a go.

•Virtual Branch (WEBSITE)Creating a virtual bank online (website) will engage customers on the ING site and make surfing digital platform more interesting

•Donate OnlineING Bank will now provide you the facility to make a difference to India's underprivileged - online, anytime, from anywhere.

Additional Benefits to the Digital Platform

•Customization of productsCustomers have different expectations of their bank, and are willing to pay for different services. Now providing customers with these services can make customers more satisfied and more profitable

•3 in 1 accountLink your banking, trading and demat accounts with our Seamless, Secure and Integrated 3-in-1 trading platform

•E-lockerING e-Locker will be an online document storage facility to store all your valuable documents at one central secure location. Be it your birth or marriage certificate, passbook statement, life insurance policy, PAN card copy or any other prized document, access all your documents anytime conveniently

Primary and Secondary Research Analysis

As per our survey 66% people are satisfied with the services offered by banks at their branches but there are 34% people who still believe that the services are not upto the mark and they are lacking in server problem, customer service provided by the banks, cheque book, pass book etc not issued on time and Long waiting queues at the branches.

If we look at these situation from a larger perspective the banks Term Deposits have been decreasing from 278989 to 274581 ,also the Net profit generated by the bank YOY has Decreased from 34% in 2012-13 to 7%in 2013-2014

Therefore there is a need for banks to improvise on their existing digital platform to increase their revenue, profit, customer base, market share and to strengthen their Brand Name in the market.

Banks need to include different services in their digital platform like Pockets/Wallets, Chat and Instant Messaging, Virtual Branch (SITE),Donate Online, Customization of products,3 in 1 account, E-locker to stand unique in the market as this will help them attract new customers and increase their customer base.

Primary and Secondary Research Analysis

Now these are the services which I suggest to ING Vysya bank to help them increase

the revenue and customer base but it is upto the banks financial and scope to

implement them

The cost which the bank has kept aside to implement innovative things on a yearly

basis to increase the sales can be utilised on these services. Also apart from these

services the bank can earn revenue using digital marketing platform by allowing different

companies to advertise on their site .

The cost which the company will have to bear will be on technology that is website

development, maintenance of the website and mobile application as well as on

recruiting new employees to run the site and maintain it.