Honey ShahNMIMS Mumbai

DIGITAL BANKING VS BRANCH BANKINGHunt for the Lions – The ING Way

INTRODUCTION Branch Banking is the traditional banking system where the customers has

to go to branches to avail the financial services offered by banks

Digital Banking is the term used to refer E-banking including social, mobile and online banking methods

New channel integration technologies, security, enabling a more seamless end-to-end experience for customers

PROBLEMS No ease access to the consumers to manage the finances

No centralized management to manage and take decisions

No mechanism to monitor and keep track of information with ease

Difficult to reach branch for small information or transaction

Dissatisfaction among the consumer as no standardized and quick information

BUSINESS OPPORTUNITY 82% of the consumers prefer digital banking as compare to 68% of the

Branch banking

43% development is in the digitized banking

Increasing Customer satisfaction as they could do transaction anytime & anywhere

Online financial service account for 3607 crores in 2013 among which 29% insurance related activities

Digital banking start-up focuses on financial management tools and reported 60 percent growth in accounts over a three-month period.

Manage costs by diverting customers to a digital experience, away from higher-cost physical channels

SOLUTIONS Centralized system to manage services and take decisions

Better opportunity for the consumers to avail services

Single, easy and uniform platform for information and financial services

Kiosk to be proposed for availing the services anytime / anywhere to avail services like cash transaction, account opening etc.

Target demographics with increased digital adoption

Build an online reputation and be perceived as innovative

SWOT ANALYSIS

1. High cost of service2. Continual wants of customers wants and needs3. Hostile feelings of employees due to possible pending layoffs due to automation4. Multiple option for the customers5. Initial investment in technology will be expensive

1. The ability to have a larger customer base2. Global expansion-This is an enormous market which will be a great opportunity in the future3. The ability to take advantage of the growing opportunity of internet banking

1. Continual changing technology2. Uncertainty of the banking industry3. Competition from the lower price operation4. Possible failure of product due to non-acceptance of customers

SWOT

85% population below 30 years, which are tech-savvy improving the population demand potential for e- banking

As many as 7% of account holders in the country are using the Internet for banking transactions, while branch banking has fallen by a full 15 percentage points, according to a report by global management consultancy McKinsey & Company

69% of customers already use the Internet to buy financial products

MARKET OVERVIEW As per Neilsen

Research, Internet banking is increasing while branch banking usage is decreasing

Multiple channels to connect with bank will increasingly important to have a 360-degree view of customer device touch points and to optimum customer experience

BUSINESS MODEL CANVASKey Partners

● Investment partners● Technology vendors● Regulatory Agencies

Value Proposition

● Low-cost transactional banking● Peer-to-Peer payments● Budgeting● Easy access to consumer finance● 0% financing● E-commerce● B2B Exchange

Key Activities

● Platform Development● IT Operations:

Set-up and Maintenance of system

● Role based Configuration● Collaboration with Partners●Home Financial Planner

Customer Relationships

● High degree of automated services● Personalized telephone services● ATM kiosk and Mobile application

Key Resources

● IT Infrastructure:FacilitiesDatabaseHardwareSoftwareServers

● Human:Web and Application developmentManagement

Customer Segments

● Retail banking consumers● SMEs

BUSINESS MODEL CANVASChannels

● Internet site● Ad words, AdSense, SEO etc.● Telephone banking● Mobile Application

Revenue Streams

● Transaction fee● Interest income● Cross-selling JV Partners● Other financial products

● Data Center Operations Cost:

Maintenance CostServer Management CostDatabase Management CostFacility Handling Cost

● R&D Cost:Platform Development Cost

● Marketing & Sales Cost

● General & Administrative Cost:Support StaffsEmployeesTrainingManagement

● All fixed costs

Cost Structure

OPERATING MODEL – DIGITAL BANKING Digital Strategy—a road map with

defined business objectives

Banks and insurers need to understand the youth’s online expectations and behaviors to engage them within a short attention span

Overcoming adoption barriers with easy-to-use functionality will be of primary importance in targeting the nation’s older age groups

RATE OF DIGITAL ADOPTION VS TYPE OF DIGITAL ACTIVITY

STATISTICS

Yes No0%

10%

20%

30%

40%

50%

60%

70%65%

35%

Users of E-banking

Users of E-banking

SBI ICICI HDFC ING Vysya

Other Banks

0%

5%

10%

15%

20%

25%

30%

35%

40%

30%

20%

10%

5%

35%

No of Users of Bank

No of Users of Bank

Yes No0%

10%

20%

30%

40%

50%

60%

70%60%

40%

Online Bill payment service

Online Bill payment service

STATISTICS

Yes No0%

10%

20%

30%

40%

50%

60%

70%

80%70%

30%

Users of Online Shopping

Users of Online Shopping

Yes No0%

10%

20%

30%

40%

50%

60%

70%

35%

65%

Users of Online Fund Transfer

Users of Online Fund Trans...

Yes No0%

10%

20%

30%

40%

50%

60%

70% 65%

35%

Satisfied Customers from E-Banking

Satisfied Customers from E-Bank...

REFERENCES Site References:-

www.ingvysyabank.com/ https://in.linkedin.com/company/ing-vysya-bank http://www.soppnox.com/blog/indians-buy-online-shop/ http://

www.nielsen.com/us/en/insights/news/2014/the-evolution-of-modern-banking.html

http://www.nielsen.com/us/en/insights/news/2014/a-look-at-connected-banking-consumers.html

http://www.business-standard.com/article/finance/7-account-holders-in-india-use-net-banking-study-111072000193_1.html

http://www.banking2020.com/2011/11/03/consumers-are-increasingly-using-multiple-devices-to-support-banking-needs/#.VCQSxxbSK-M

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