SruthiIFMR Chennai

BANKING IN INDIA Definition : Accepts deposits and lends the same to earn same to earn

some profit Now Banking is used for multipurpose : Saving, day-to-day transactions,

Foreign exchange, maintaining financial portfolio and many more. Reserve Bank of India : India’s central Bank, established on April 1, 1935. RBI Maintains record of government expenditure and revenues, a

controlling body for all others banks in the country. In 1839, India’s first bank “Union Bank” was established but failed in 1848 In 1865, “Allahabad Bank” was established and considered as oldest

surviving bank. Now India has 1,10,000 branches and every year 7000 t0 8000 branches

were open in last nine years The size of banking assets in India totaled US$ 1.8 trillion in FY 13 and is

expected to touch US$ 28.5 trillion in FY 25. Banking services: Instantaneous money, ATMs, Digital Banking, Mobile

Banking, BFSI sector Banking now plays a role in day-to-day personal and business activities

Growth Predictions• Market Size Growth

Growth :  US$ 1.8 trillion in FY 13 to touch US$ 28.5 trillion in FY 25- The image shows growth of BankingSector as per growth of GDP, where Both the growths are aligned.-ATM growth is drastic comparing FY06To FY13.

India’s Banking Industry to be 5th largest globally by 2020 3rd largest by 2025 Growth Factors : Government and RBI fiscal and monetary policies, Technology trends, Increase in GDP, Economic growth and many more

About INGVysya• Indian multinational bank based in Bangalore• Platforms : Personal, Business, Wholesale, Private and NRI.• Formed in 2002 acquisition by Dutch ING Group, having

1000 outlets and 527 branchesPersonal Banking

• Products and Services in deposits, loans, investments, insurance, forex, demat, online and wealth management services

Business Banking

• Loan schemes for SME and CGTMSE, Trade services, Agricultural Loans, Accounts and Deposits and Digital banking services.

Wholesale Banking

• Loans, Global Transactions, Debt Capital Markets and Corporate Fianace

• Financial Markets : Risk Management, Research and analysis, Market making and Trading, Asset Liability Management

Private&NRI Banking

• Private investment banking, Trust & Estate planning, Structured products, Portfolio Advisory

• NRI Banking : Accounts & Deposits, Money Transfer, Wealth Management, Home Loan, PO box services

Branch Versus Digital BankingBranch Banking Retail Location offering a

wide range of face-to-face and automated services.

Travelling to the desired location is a prerequisite.

Enables personal connections with Managers and Loan Officers

Time & Money consuming

Arrived in India in late 1990s

Electronic Payment System, to conduct financial services on a website operated by institution

An electronic device with internet access is a prerequisite

Provides services anywhere anytime

Digital Banking

SWOT ANALYSIS-

STRENGHTSBetter Personal Relations- Face to Face Interactions

- Mortgage and Loans involving huge amount

- Highly sophisticated Customer Care Centers

- Increased Trust and Reliability-High in Customer Relationship

Management

WEAKNESS- Traditional method of servicing

- More Time Consuming- Increased maintenance expenditure

- More cost consuming for clients- Inability to cope up with latest

technology

OPPORTUNITIES- Enables to maintain strong bond with clients- Enhanced locker and safety measures- Prioritizing Rural Areas-Trusted Financial Portfolio Assistance-Enhances Networking- Technology to improve Sales and Service Model- Video Conferencing Technology in Banks

THREATS- Emerging- Urbanization- Increased Financial stability of the people- Increased Travelling costs- Rapidly Growing Smart Phones

BRANCH BANKING

- Providing Access 24 hours- Enables Trading between banks in seconds.- Enables in Tracking Cash Flow- Time Efficient- Cost Efficient- Less Maintenance- Account Alerts - Access to Latest Technologies- Better Interest Rates- Reduced Cost-to-Serve-Increased Convenience- Notifications of latest online offers- Modernized Approach- Large customer coverage

STRENGTHS

- Security concern-Lacking Personal Contact- Learning Difficulties- Site changes and upgrades- Internet service- Technical breakdown- Site disruption- Difficulty in site navigation - Need access to computer hardware- Virus attacks- Transaction problems

WEAKNESS

DIGITAL BANKING

- -Prone to hacking attacks, phishing, malware and illegal activities- More Efficient and accessible Branch Banking- Card copying- Data theft at various levels of transmission- Building Trust- Lack of customer awareness

OPPORTUNITIES

- Growing Technology- Modernization- Mobile Banking- Emerging IT Networking- Spread in Rural areas- Alternative new technology providing ease of site access- High online security measures

THREATS

Factors for Customer choiceDigital Banking Branch Banking

- Time and Cost Efficient

- Quick and Easy access

- Convenience- Heavy risk

management- Portfolio management

- Trust- More secure- Strong personal

contact- More enquiry

regarding loans

ROADMAP Digital technology and rapid changes in customer preferences are threatening full-service banks that do business primarily through branches Currently 40% of the Indian population have Bank Accounts So, there is large scope for Banking in India to attract the people. As Digital Banking being the most rapid growing technology, it would be more easy to attract many people through E-Banking.

43%

38%

22%

2%

ThreatsSecurity ConcernsFace-to-Face Trans-actionsLack of KnowledgeLack of Facility

Segments Approach Impact

Rural Areas (Including BPL Families)

- Training Institutes- Ensure technology availability- Special and subsidized online banking schemes- Easy and convenient online interface through

images and videos- Minimal technology use- Mobile Banking for monthly expenditures and

incomes- Subsidized internet charges- Messages on recent interest rate/ policy

updates, bank balance etc- Online DD

- Encourages many villagers to have online accounts

- Profitable to banks and individuals

- Overall economy growth

- Controls urban migration

Urban Areas (Upper Middle class and Rich people)

- Financial and Risk management portfolio- Enabling multiple partners of a single business

to have single online account- Unnecessary network clinches to be avoided

completely.- Maintaining full-time customer care facility for

risky assets.- Video and Audio calls for digital banking

facilities- Customers to be communicated clearly about

security and data encryption measures used.- Informing about online, Debit and Credit card

offers via mail and message.- - Online Demand Draft and check submission

- Increases business transaction

- Enables a strong trust and bond with bank

- Ease and Quick access

SEGMENT APPROACH IMPACT

Student - Credit and Debit card discounts for books.

- Personal online accounts which promote educational trips

- Educational loans through online banking

- Chat facility on online banking

- Increases student awareness- Increase in

educational loans

Employees - High end Technology- Debit and credit card offers

for online purchases and sales

- Online updates of share prices for demat accounts

- Information on online deals- Promoting mobile banking

through purchases by a call, without internet access

- Attracts many employees use online accounts in different way.

- More convenience and time saving for people with busy schedules

Women - Convenient user interface- Debit and credit card offers

for online purchases and sales especially on homemade, clothing and beauty products

- Cooking recipes through mobile banking

- Reduces door-to-door women shopping.

Customer Insights• Primary Data : Survey on Digital banking conducted on 90 people, of

which 90% of 15-25 age group, who are mostly students preferred Online Banking.

• People between age group 26 – 40 who are mostly working population almost 60% preferred both online and branch banking

• People above age of fifty who are not much aware of technology preferred traditional way of Branch Banking

• Major Concerns for Digital Banking :• Security Concerns• Internet Access• Lack of Face to Face Interaction• Network Glitches• Difficulty in switching to multiple sites• Failure in transactions

• Secondary Data : People are shifting from Branch to Digital Banking, growth of digital banking in urban areas increasing rapidly, same to ensured in rural. Rural population lack awareness and access to online banking.

• Executive Summary :A detailed analysis of Banking industry in India, the growth of banking sector in terms of deposits, rural and urban growth has been given. Further SWOT analysis of Branch and Digital banking is made. Customer Insights are collected from primary and secondary data sources. A long term roadmap for Digital banking segment wise along with impact is presented.

Conclusion :India being one of the developing countries, where major economic growth is contributed by technology youth and working population are more convenient to digital banking. It offers many benefits at the same time has certain negative aspects which are to be nullified.

Undoubtedly it is essential to have major investment in online banking, coming up with more customer benefits apps at the same time branch banking can be eradicated completely, it is essential too though plays minor role.

BIBLIOGRAPHY • http://smallbusiness.chron.com/online-banking-disadvantages-2248.html• http://info.shine.com/industry/banking-financial-services/8.html• http://gradestack.com/IBPS-Bank-PO-Clerk-by-Bank-Power/ Indian-Economy-Concepts-Understand/14347-2890-627-study-wtw• http://www.wbiworldconpro.com/uploads/ melbourne-conference-2013-november/banking/1384600741_607-Jamal.pdf• http://web.stanford.edu/~pdupas/Challenges_DupasEtAl2011.pdf• http://www.ibef.org/industry/banking-india.aspx• http://www.rbi.org.in/scripts/BS_SpeechesView.aspx?Id=810• http://www.ibef.org/industry/banking-india.aspx• http://www.accenture.com/us-en/Pages/ insight-retail-banking-survey-2013-us-retail-banking-digital-era.aspx• http://www.infosys.com/finacle/solutions/thought-papers /Documents/banking-in-emerging-economies.pdf

THANK YOU