RETAIL BANKING IN INDIA

PRESENTED BY: (GROUP 4)

SAKET RARASAGAR NIKAMSACHIN MORENITIN DAFADEGAURAV KUMARMITHUN SADAVARTEDEEPAK DODDAMANI

SUMMARY RETAIL BANKING: Retail banking refers to

banking in which banking institutions execute transactions directly with consumers rather than corporations or other banks.

Services offered includes : Savings and checking accounts, mortgages, personal loans, debit cards, credit cards and so forth.

Indian retail banking is showing phenomenal growth

Key drivers: Increased consumerism, Internet, Emergence of new age companies, technology.

SUMMARY CONTINUED…..FIVE FOCUS AREAS:ImaginationEmotional ConnectionFunctional & technical advantagePersonalized contact Testing & Improvement

THE FIVE COMMANDMENTSMarket offering & positioning Customer relationshipsCompetitors study Customer care & feedback Employees satisfaction

THE RETAIL BANKING STRATEGIES ADOPTED BY A FEW NEW AGE BANKING ORGANIZATION IN

INDIA. DISCUSS…

RETAIL BANKING STRATERGIES Constant innovation in products, services to

match the requirements of the customer segment.

Quality service and quickness in delivery. Introduction of new delivery channels Tapping of unexploited potential and

increasing the volume of business Detail Market research Cross selling of products Business process outsourcing Tie-up arrangements

RETAIL BANKING STRATEGIES CONTINUED…. Fixed and unfixed Deposits, (cluster deposits

which can be broken into smaller units to help meet depositors’ overdraft without breaking up entirely)

Centralized database for ‘any branch banking’ (whereby the customer can access his account

in any of the branches) Room services (whereby the customers are

visited at their residences offices to enable them to open their accounts)

Automatic teller machines Tele banking network Extended banking time Courier pickup for cheques and documents

WHAT ARE THE STEPS TAKEN TOWARDS TRANSFORMING RETAIL

BANKING BY BANKS LIKE SBI?

STEPS

Presence And Availability Core Banking Extended Hours, Quality & Quickness in

Delivery Better Infrastructure Make Routine Tasks Easier And Less Time

Consuming- Net Banking

- ATM Centers

- Handy Fund Transactions

Merger/Acquisition Process- Imperial Bank Of India

- State Bank Of Saurashtra, Cochin, Travancore, Indore

Services, Product Range, Group CompaniesSBI----

- Capital Market Ltd.

- Mutual Fund

- Cards And Payment Services

- Factor And Communication Services

3. SHOULD RETAIL BANKING BE TREATED LIKE RETAIL STORES IN TERMS OF ITS OPERATIONS TO MEET WITH SUCCESS IN INDIA AS SUGGESTED BY BCG?

PRESENT SCENARIO Indian retail banking has been showing phenomenal

growth

In 2004-05, 42% of credit growth came from retail

Over the last 5 years CAGR has been over 35%

Retail credit level crossed Rs.189K Crore in 2004-05

Market has transformed into a ‘buyer’s market’ from a ‘seller’s market’

Comprises of multiple products, channels of distribution and multiple customer groups

ECONOMY VS. RETAIL BANKING Retail assets are just 22% of the total banking assets

of India Contribution of retail loans to GDP:

India 6% China15 %, Thailand 24% Taiwan 52%

Indian population below 35 yrs of Age – 70 % Reach of Formal Banking Channels – 20-25% of

Indian population Source: Cygnus Industry Insight

MARKET SHARE: RETAIL LOAN - 2005

Auto28%

Other personal Loans16%

Home49%

Consumer Durables

7%

BANKING LIKE RETAIL STORE “Any where”, “Any time” Banking

Improved processes/Bundled product offerings

Faster service/Reduced TATs

Customer specific products/offerings on a regular basis

Focus on understanding customer needs/ preferences

Segmentation/Differentiation of customers

Building relationships

SIMILARITIES: 1) Customer oriented approach 2) Stiff competition to be tackled3) Dynamic business environment 4) Faster changes in technology & methods 5) Greater potential in Indian market DIFFERENCES: 1) Mind sets different 2) Priorities are different3) Differentiation potential varies4) Customer buying behavior is different

RETAIL BANKING V/S RETAIL STORES

RETAIL BANKING IN RETAIL STORES WAY…

AS IS / BEFORE TO BE /NOW

PRIORITY Credit & Risk Customers & retailing

APPROACH Secure & conventional location for financial transactions (Banks dictate terms)

Customer centric retail banking (Customer is King)

CUSTOMER BASE Corporation & other banks

Retail consumers, corporate clients, other banks

FORMATS Single Entity Multi-location, multi branch

MORE EMPHASIS ON

Improving transactional efficiency

Providing service and value to consumers

CUSTOMIZATION Rarely there Highly customized

RETAIL BANKING IN RETAIL STORES WAYTO IMPROVE FIVE FOCUS AREAS

RETAIL STORES APPLICABILITY TO RETAIL BANKS

IMAGINATION Sell dreams, Offer a vision where customers can go.

Sell dreams of comfortable & secure retirement plans etc.

EMOTIONAL CONNECTIONS

Provide information,Serve & create bond

e.g. Update new plans tapping new needs

FUNCTIONAL & TECHNICAL ADVANTAGES

Retail stores provide value- added products & services

Create products & services with act as differentiator

PERSONALIZED CONTACT

Data warehousing, data mining

e.g. advices on money management depending on individual needs

TESTING & IMPROVEMENT

Keep experimenting New methods, plans,Implement & improve

RETAIL BANKING IN RETAIL STORES WAY…FIVE COMMANDMENTS

RETAIL STORES APPLICABILITY TO RETAIL BANK

SEGMENTATION, TARGETING, POSITIONING

accordingly make product offerings simple & relevant

e. g. positioning HBOS :Consumer champion in Britain

CUSTOMER RELATIONSHIP

Track & correct mis-perceptions of customers

Feedback,complaints,helpdesk.

COMPETITION Survey competitors:offerings, strategies & promotions & beat them

Competitor oriented strategy, Be updated & improve

PROACTIVE Listen to customers continually & carefully

Unstated needs identification

INCENTIVES Performance based To Sales & frontline, back-office staff

CONCLUSION

Retail banking has a great scope in India due to increase in consumerism, purchasing power of customers.

E-banking, phone banking, Mobile banking, ATM, have become necessity, and are no more factor of differentiation in urban and semi urban cities.

Bankers can adopt strategies used by retail stores to very large extent to woo the customers and survive in competition.

THANK YOU…!