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Axis Bank Reinventing Banking
Axis Bank Reinventing Banking
Nikunj Shah Reshma Sonawane Jayesh Surve Sanil Tharwal Ankita Trivedi
The first bank in India, though conservative, was established in 1786. the journey of Indian Banking System can be segregated into three distinct phases.
Phase 1
1786 to 1969
1786 : The General Bank of India Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow Banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority.
Phase 2
In 1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale specially in rural and semiurban areas. It formed State Bank of India to act as the principal agent of RBI 7 Banks formed subsidiary of State Bank of India were nationalised.
It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was nationalised. The branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11,000%.
Phase 3
This phase has introduced many more products and facilities in the banking sector in its reforms measure. In 1991, under the chairmanship of M Narasimha, a committee was set up by his name which worked for the liberalisation of banking practices. The country is flooded with foreign banks and their ATM stations.
Efforts were being put to give a satisfactory service to customers. Phone banking and net banking was introduced. The entire system became more convenient and swift. Time was given more importance than money.
UTI BANK
Introduction
Axis Bank (Formerly known as UTI) was one of the few private banks to have began operations in 1994 The Bank was promoted jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI)
Life Insurance Corporation of India (LIC). General Insurance Corporation Ltd (GIC). National Insurance Company Ltd. The New India Assurance Company. The Oriental Insurance Corporation. United Insurance Company Ltd.
1994-1997
Incorporated as UTI Bank, headquartered in Mumbai First Branch inaugurated at Ahmedabad Completes first profitable year in operation in 1995 Deposit crosses Rs.10bn mark in 1996
1998-2000
Successfully completes its IPO in 1998 and gets itself listed on NSE and BSE Cash management services as well as credit card launched Profit crosses Rs.500m in 2000 Launches Internet banking module, iConnect retail loans introduced Financial advisory services and e-commerce introduced Second largest ATM network in the country with 200 ATMs
2001-2005
Private placement of 26% stake to CDC Capital Partners Deposit crosses Rs.100bn mark in 2001, advances crosses Rs.50bn First commercial bank to open an ATM at a post office Crosses the 1,000 ATM mark in 2003 Gets listed on the London Stock Exchange, raises $239.3m
2006-2008
Opens its first international branch in Singapore Opens Representative Office in Shanghai Crosses the 2,000 ATM mark in 2006 Opens a Full Licence Bank Branch in Hong Kong Re-brands itself as Axis Bank Mumbai, Jul 30 2007 : UTI Bank on Monday rechristened itself as Axis Bank.
PROBLEM
2. The recommendation for name change to Axis Bank has arisen from the existence of several shareholderunrelated entities using the UTI brand, and the consequent brand confusion that this generates
3. The name UTI bank was changed to AXIS bank as UTI gave a look of government sector bank. They had to change our name to have our own brand and identity.
Rebranding Exercise
"The name was taken into effect consequent to the approval of shareholders, Reserve Bank of India and the central government (Registrar of Companies). The UTI brand is owned by UTI Asset Management Company The bank would change logo and colour of logo the bank is likely to spend around Rs 50 crore in the re-branding exercise. The bank acquired the services of Ogilvy & Mather (O&M) to design and implement the rebranding campaign
The logo depicts a strong growth path for the bank supported by a strong base, indicating that the bank is moving on from a position of strength.
ABOUT AXIS
Mission
Customer Service and Product Innovation tuned to diverse needs of individual and corporate clientele. Continuous technology up gradation while maintaining human values. Progressive globalization and achieving international standards. Efficiency and effectiveness built on ethical practices.
The banks business is divided into four segments: Retail, corporate, treasury and merchant banking. Apart from this the bank is also into insurance, investment banking, mortgage financing, credit cards, and depository services amongst others. it is also registered on the following exchanges:
OTCEI BSE NSE
Services
Retail banking
Deposits schemes Loans and advances
Personal loans Housing loans Cards Consumer durables Auto loans
Personal banking
Accounts
Term deposit Fixed deposit Recurring deposit
Cards
Different variant like: Gold plus card, Gold card, Silver & silver plus cards.
Corporate banking
Accounts
Normal Current Account Trust/NGO Savings Account
Services
Private Equity, Mergers & Acquisitions Advisory Services Capital Market Funding E-Broking
Recent Developments
Shikha Sharma was named as the bank's managing director and CEO on 20 April 2009. As on the year ended March 31, 2009 the Bank had a net profit of Rs 1,815.36crores The bank now has 835 branches including extension networks across 30 States and 4 Union Territories.
The bank also has overseas offices in Singapore, China, Hong Kong and Dubai. Crosses the 3,723 ATM mark in 2009 Launches Platinum Credit Card, India's first EMV chip based card Axis Bank is now trading at Rs 911.85 (17th sep).
Rs in crs. Mar 09
117,374.11 81,556.77 359.01 10,214.80 284.53 10,835.49 7,149.27 1,815.36 0.35% 147,722.06 1.44%
Corporate /wholesale 7280.14 banking Retail banking Other banking business 6675.51 (5.40)
Comparative Analysis
Particulars Deposits Advances Share Capital Net worth Book Value Interest earned Interest expenditure Net profit Net NPAs Total Assets Return on Assets Axis 81,556.77 359.01 10,214.80 284.53 10,835.49 7,149.27 1,815.36 0.35% 1.44% HDFC
117,374.11 142,811.58 209,760.50 49,970.27 98,883.05 154,702.99 27,588.68 425.38 15,052.73 344.44 16,332.26 8,911.10 2,244.94 1.49% 1.10% 315.30 14,653.63 416.74 19,326.16 12,295.30 3,090.8 0.17% 1.15% 4,499.16 11,214.3 6,326.9 2,661 12,91.2 1.42% 1.51%
Axis Bank
Marketing Overview
Marketing Management
Marketing Objectives
Axis Bank want to achieve following marketing objectives by the end of the year 2011. To get the market capitalization 500 Crore To get the 200 Crore retail investment. To get 125 Crore Corporate investments. To get the 175 Crore Capital investments.
REBRANDING
Has retained the burgundy color, but has changed the logo. Spend around Rs50 Crore in the rebranding exercise. Had hired advertising firm O&M.
Competitive Strategy
For the private sector banks: Differentiation on the basis of area coverage. Restricted Reach. Level of service is the same. Axis got advantage because of Product Innovation.
Competitive Strategy
For the government sector banks High level of service quality and through product innovation. AXIS not any where near, but has created a different set of segment. People who believe in the higher set of services
Competitive Strategy
For the International Banks : Differentiated itself on the base of the reach and coverage to the people. Service level is somewhat same. In the future these banks may create a problem.
PRICING MIX
Value for money. Lower fee charged.
PLACE MIX
Making available the promised services to the ultimate users. Selecting a suitable place for bank branches. Plans to set up 210 more branches across the country in this fiscal.
PROMOTION MIX
Advertising Print media Publicity Sales promotion Personal selling Telemarketing
PROCESS MIX
Flow of activities Standardization Customization Number of steps Simplicity
PHYSICAL EVIDENCE
Internet Paperwork Brochures Furnishings Business cards Tangibles Punch lines Employees dress code
PEOPLE
EMLOYEES
STP ANALYSIS
Segmentation strategy
Demographics variables
Location
Metros & divisional cities
Occupation
Business persons Salaried class (both Govt. and private) Working woman
Age
Senior citizens Minor
Psychographic variables
Lifestyle
The people who believes in modern banking with higher set of services i.e. Internet banking (icontact, mobile refill, travel currency card etc.).
Targeting strategy
Target market
Corporate banking market: This market target the industries and fulfil their financial needs. Capital market: This segment is targeted on the long term needs of the individual as well as of industries Retail banking market: This segment is for the retail investor and provide them short term financial credit for their personal, household needs.
Targeting strategy
Selective specialization strategy
Here the bank selected a number of segments, each objectively attractive & appropriate. There may be little or low synergy among the segment but each segment proves to be worth full for it. If we take the example of cards then Axis bank have separate set of credit cards, each targeted at different set of people i.e. segment and each one has its own importance for the bank.
Positioning strategy
Axis bank has positioned itself as a bank which gives higher standard of services through product innovation for the diverse need of individual & corporate clients. So they want to highlight following points in their positioning statement:
Customer centric Service oriented Product innovation
The fact that the top 9 banks account for barely 57.8%of the market share suggests that several smaller players occupy the remaining 42.2%
PRIORITY BANKING
Axis Bank
H. R. Overview
FUNCTIONS OF HRD
Ultimate aim of the human resources function is to build and manage a motivated pool of professionals delivering optimum value to customers. Major platforms on which the success of the bank's corporate strategy rests is bringing on board the requisite skills. Young bank with an average age of 29 years and a talent pool comprising a mix of new recruits and experienced officers.
CONTD
Training-Scheduling. Performance Management. Compensation/Reward Administration. Grievance Handling.
HR BUSINESS MODEL
KHOJ Sampark Paramarsh Axis Financial Rewards For Business Leaders Mep-tikshna Hr Policy For Overseas Selection & Deployment Hr Resourcing Policy Performance Appraisal System For Clerical And Sub-staff Axis LEADERSHIP DEVELOPMENT CENTRE
Axis Bank
Information System Overview
INFORMATION SYSTEM
Implemented a new derivatives system-Summit FT with the help of global financial applications provider Misys. Provides ability to structure derivative products in real time and give a single view of the entire transaction to the customer The bank hopes to leverage the ability to rationalize its currently dispersed functions to provide a single view of every transaction to customers.
CONTD..
Apart from creating a new derivatives product, it also helps from a regulatory compliance standpoint. RBI favors transparent online systems that can track every transaction and report it exactly as it is. An automated system removes this anomaly and improve compliance to a great extent.
SOFTWARE RESOURCES
RisKompass: Pyxis systems has provided AXIS bank its RisKompass as the software solution for financial derivatives risk management. It enables clients to manage derivative trades in a further controlled way from the front to back office. Automated system that can be accessed by anyone on the different locations of the bank. Smoother deal processing, with verifying and online risk monitoring mechanism. The system is user friendly, and the software offers good portfolio management features.
OTHER SOFTWARES
Atom Technologies, A Subsidiary Of The Bse-listed Financial Technologies (India) Ltd (FTIL), Which Runs The Multi Commodity Exchange Of India Has Innovated A Technology, Which Enables Mobile Payments. Electronic Clearing Service (ECS Credit) . NEFT. Real Time Gross Settlement (RTGS).
HOW IT WORKS?
TECHNOLOGICAL ADVANCEMENTS
Extensive Network . Centralized Service Desk. Comprehensive MIS . Mobile Alert Service.
Operations Perspective
Rebranding
UTI Bank has changed its name to Axis Bank Ltd Immediately, the bank replaced signages Informed customers about the brand change through various channels Restructured its operations after rebranding
How their strategy changed after rebranding: Earlier they were only customer centric
NOW they have added Service centric and product innovation into their strategy.
Information Technology:
Played a vital role in growth of organization To retain a competitive edge, the Bank's technology infrastructure is continuously upgraded Use of technologyfirst among Indian banks in submitting centralised Return for foreign exchange transactions first bank in the India to market EMV chip embedded Debit Platinum, Travel Currency and Credit Platinum cards
New Initiatives
Remittance Card:
A unique product that has changed the way money is sent across borders. Available as a delivery mode for remittances made through the Web Portal www.Remit2India.com. Based on the remitters request, a personalised Remittance Card is prepared for the beneficiary, which is preloaded with the funds remitted to him in INR.
How does it work:Step 1: The merchant inserts the chip card into his EDC terminal in the chip reader slot. The card need not be swiped. The card remains inserted in the terminal throughout the transaction .
Step 3: The Cardholder signs the receipt and removes his/her card from the terminal.
Strategic Tie-ups
Alternate Channels:
ATM Channel Internet Banking Channel Mobile Banking Channel
ATM Channel
All its ATMs are connected to Base24 ATM switch The Bank through its ATMs offers the following services: Banking Services Mobile Airtime Refill Bill Payment e.g.: BSNL, MTNL Life Insurance Corporation Premium Payment Purchase and redemption of UTI Mutual Fund Schemes through the ATM.
Shared resource:
Bilateral ATM sharing arrangement: State Bank of India ABN Amro Bank Bank of Rajasthan Karur Vysya Bank Andhra Bank Multilateral ATM sharing arrangement: Cashnet (A shared network run by Euronet India Pvt. Ltd.) BANCS (Formerly known as Swadhan. Now run by E Funds Ltd.)
b) Bill Payment Presentment or EBPP (Electronic Bill Presentment & Payment): Bill presentment happens The biller will send an electronic version of the bill for acceptance and payment Direct Payment: - No bill presentment happens - The customer is free to select the biller and pay accordingly to his convenience. c) Shopping etc.
Conclusion !!!!
AXIS bank has differentiated itself very well on the basis of high level service and product quality. They have successfully implemented the change and due to this their market share has increased only despite of tough competition prevails.
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