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Roadmap for Digital Banking in

Digital India Are we ready for


lift off?

T. V. Mohandas Pai,
Chairman, Manipal Global Education Services Pvt. Ltd
The Global Digital Imperative
Global Digital Economy

The worlds largest The worlds most


taxi company popular media owner
owns zero vehicles creates zero content

The worlds largest The worlds most


accommodation provider valuable retailer
owns zero real estate has nearly zero inventory

Manipal Global Education Services Pvt. Ltd.


Digital disruption is leading to Existential Crisis for some

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Banking Digital Vortex in Action

Company name and logo is a trademark of the respective organizations.

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Banks Are Trying To Fight Back..

In house developments CBA, RBS, Soc Gen, Scotia Bank

Partner with Fintechs ING, TD bank, Santander

Invest, Incubate, Accelerate Banco Santander, Barclays, Wells Fargo, Citi

New models of delivery Hello Bank (BNP Paribas), Soon Bank (AXA Bank)

New Banks Fidor, Atom, Bank Mobile.

Manipal Global Education Services Pvt. Ltd.


India Blossoming Digital
Economy
Govt. providing the Spark, Consumer fuelling digital Fire

Broadband for All (Rural)


Rs. 3,200 bn Growth from 190 mn internet
users in 2014 to expected 500
National Information
infrastructure Rs. 1,568
mn in 2018.
This growth is fuelled by more

Consumer Fuelled
Government Push

bn

older, more women, more rural


Digital Universal Access and more vernacular.
India
to Mobile
connectivity,
Internet economy will move
Rs.1,600 bn from being 2.7% of GDP (2013)
to 4% of GDP on par with
Digital Inclusion
170 mn direct jobs
developed markets.

eKranti Digital delivery of


services

Source:DeitY Source:BCG

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Government Initiatives Digital and Inclusive

JAN DHAN ACCOUNTS


(193 mn) 01

02 AADHAAR
(993 mn)

PAYMENTS & SMALL


FINANCE BANKS 03
(21 new Institions)

PAYMENTS
04 - IMPS (196 mn txns in 2015)
- UPI
Bharath Bill Payments

Manipal Global Education Services Pvt. Ltd.


The Digital Infrastructure in India is still evolving
Current Status Technology Implication
No. Internet Now at 400m but 25% of users connect once a Future growth will be in rural areas as Quality, Cost and
connections month. ubiquity of connections improves

No. of mobile phones Nearly 1 billion, Mobile first strategy.


60% internet access is through mobile
Smartphone 15% & expected to increase to 25% by 2018 Need to support multiple channels with risk of increased
penetration complexity and support costs.

How do people 90% connect through 2G Lite-applications which can work in online & offline mode
connect ?
Pre vs Post-paid 95% pre-paid market Users have limited data usage plan. Data/digital-led market
will take time
Payments Rapid growth. 255m transactions using wallet, Digitized point of sale and payment banks will further
$15+ b worth mobile payments intensify competition.

English savvy users Just ~12% of internet users (~50m). Most non- Multi-lingual support is critical for penetrating the large
urban users prefer vernacular untapped rural mass across 3.5 lac villages

Source: Credit Suisse report Dec 2015 Manipal Global Education Services Pvt. Ltd.
Emerging Digital Banking System
2011 2015 CAGR
Reporting offices in Rural 34208 49181 9.50%
Total Reporting offices 76045 108532 9.30%
BCs Year 2010 Approx 500,000 72.20%
33042
Mobile banking volume of txn Year 2014 144 mn txn Year 2015 113% Volume
- INR 666 bn value - 308 mn txn 330% value
- INR 2862 bn vlaue

Mobile Banking User Forecast

Source:McKinsey Source: KPMG, FinancialExpress

Manipal Global Education Services Pvt. Ltd.


Indian Banks Response
Net Interest Margin
4.1 4.4
3.4 3.5
2.9 2.9 3.1 2.8
2.4 2.3
1.9 1.9 1.7

Net Profit / Revenue


18.2%
16.8% 17.8%
14.8% 15.9% 14.7%

7.5% 7.2%
5.6% 5.9% 5.0%
2.1% 2.7%

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Fintechs are not far behind

P2P lending Personal Finance & Crowd Funding


Invesments

New Payment banks on the radar wallets

Manipal Global Education Services Pvt. Ltd.


Digital Journey Are Banks
Doing Enough?
Truly Digital What its not
Just adding new channels
x
+
+ +

Adding delivery of banking services on new devices

Enhancing same old banking business models with digital


technology

Giving legacy processes a digital facelift

Automating existing processes without reimagining


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Truly Digital banking paradigm
has four standout characteristics

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The customer is the focal point

This is the world of the customer

Customer experience is just the beginning

Integrate banking seamlessly in the lives of consumer

Identical individuality to individual identity

Convenience, speed and personalization Always

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Insight ahead of everything

Capture, learn and leverage

Analytics is the key to the competitive edge

Data is everywhere success belongs to those who use it well

Insights should be in the hands of all stakeholders

Mass personalization is real

Insights integrated with the process & apps

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Ubiquitous automation & leverage tech disruptors

Seamless and unbound

Leverage tech disruptors such as Blockchain, Social, start-ups, sharing

economy to reduce friction and seamless automation

Automation reduces friction, improves seamlessness

Automation delivers consistent & superior customer experience

Ubiquitous automation allows for un paralleled value generation

Tomorrow's banks will be autonomous run by self-learning virtual


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Ecosystem before bank

A step towards the future

Unbundling of banking and fragmentation of services

The ecosystem is the new universal bank

The future lies in opening up your bank

Co-opetition will be the norm

Your APIs should rule the space or you could be ruled out

Manipal Global Education Services Pvt. Ltd.


Finacle helping banks to become #TrulyDigital

6/10 60% 16.5%


6 out of top 10 Indian 60% Market share among Finacle, is today touching
Banks are powered by the top 40 banks 16.5% of the global banked
Finacle population

848 Million Customers globally on Finacle Platform

Over one billion customer accounts in more than 92 countries

Proven solution in India, rated as best platform globally


Manipal Global Education Services Pvt. Ltd.
Thank you very much

Manipal Global Education Services Pvt. Ltd.