RETAIL BANKING

IN INDIA
PRESENTED BY: (GROUP 4)

SAKET RARA SAGAR NIKAM SACHIN MORE NITIN DAFADE GAURAV KUMAR MITHUN SADAVARTE DEEPAK 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: Imagination Emotional Connection Functional & technical advantage Personalized contact Testing & Improvement THE FIVE COMMANDMENTS Market offering & positioning Customer relationships Competitors 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 Companies SBI---- Capital Market Ltd. - Mutual Fund - Cards And Payment Services - Factor And Communication Services

3.

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

SHOULD

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 buyers market from a sellers 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% China 15 %, 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

Consumer Durables 7%

Auto 28% Home 49%

Other personal Loans 16%

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

RETAIL BANKING V/S RETAIL STORES

SIMILARITIES: 1) Customer oriented approach 2) Stiff competition to be tackled 3) Dynamic business environment 4) Faster changes in technology & methods 5) Greater potential in Indian market DIFFERENCES: 1) Mind sets different 2) Priorities are different 3) Differentiation potential varies 4) Customer buying behavior is different

RETAIL BANKING IN RETAIL STORES WAY

AS IS / BEFORE PRIORITY Credit & Risk TO BE /NOW Customers & retailing

APPROACH

Secure & conventional location for financial transactions (Banks dictate terms)
Corporation & other banks

Customer centric retail banking (Customer is King)

Retail consumers, corporate clients, other banks

CUSTOMER BASE

FORMATS
MORE EMPHASIS ON CUSTOMIZATION

Single Entity
Improving transactional efficiency Rarely there

Multi-location, multi branch

Providing service and value to consumers Highly customized

RETAIL BANKING IN RETAIL STORES WAY TO IMPROVE FIVE FOCUS AREAS

RETAIL STORES IMAGINATION Sell dreams, Offer a vision where customers can go. Provide information, Serve & create bond Retail stores provide value- added products & services APPLICABILITY TO RETAIL BANKS Sell dreams of comfortable & secure retirement plans etc. e.g. Update new plans tapping new needs Create products & services with act as differentiator

EMOTIONAL CONNECTIONS FUNCTIONAL & TECHNICAL ADVANTAGES PERSONALIZED CONTACT

Data warehousing, data e.g. advices on money mining management depending on individual needs Keep experimenting New methods, plans, Implement & improve

TESTING & IMPROVEMENT

RETAIL BANKING IN RETAIL STORES WAY

FIVE COMMANDMENTS
RETAIL STORES APPLICABILITY TO RETAIL BANK

SEGMENTATION, TARGETING, POSITIONING CUSTOMER RELATIONSHIP

accordingly make product e. g. positioning offerings simple & HBOS :Consumer relevant champion in Britain Track & correct misperceptions of customers Feedback,complain ts,helpdesk.

COMPETITION

Survey competitors: offerings, strategies & promotions & beat them

Listen to customers continually & carefully Performance based

Competitor oriented strategy, Be updated & improve

Unstated needs identification To Sales & frontline, backoffice staff

PROACTIVE INCENTIVES

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!