Chathurya LIBA

ChathuryaLIBA

HUNT FOR THE LIONS CHALLENGE THE ING WAY

Chathurya P, LIBA Hunt for the lions challenge 3

Executive Summary

• Identify reasons on why customers choose a particular banking channel

• Identify ways to build a strong digital banking platform for ING Vysya bank

• Analyze the products of ING Vysya Bank and their way forward in digital banking model

4

3

Introduction

Qualitative research &Quantitative research

SWOT analysis

1

2

5 Conclusion

Digital banking platform model &Product analysis

• Prepare a SWOT analysis for digital banking and branch banking platforms

Agenda Deliverables

Transactional and operational efficiency takes top priority in banking systems. The disruption caused by digitization would add value to the bank and could cater to the changing consumer behavior trends. More than one in every four would consider a branch less digital bank to brick and mortar branch. Indian youth would go for a bank which proactively recommends products and services which are suited to their needs Therefore , a direct to customer , targeted banking service which runs on multiple integrated channels would prove to drive customer delight.

Phase TwoExploratory

Research

Target • Branch banking

customersTechniques• Depth Interviews:

face-to-face & teleconferencing

(35 people)• Projective

TechniquesObjectives• Learn their

perceptions• Identify delight

factors

Research Design

4

Phase ThreeDescriptive &

Causal Research

Phase ZeroLaying the

Groundwork

Phase Four

Consolidation

Phase OneExploratory

Research

Objectives• Understand

various banking channels

• Gain perspectives on the way forward

Techniques• Secondary

Research

Target • Digital banking

customersTechniques• Depth Interview: face-to-face & teleconferencing (25 people)Objectives• Identify the

factors which delighted them

• Identify pain points

Target • Branch banking and

digital banking customers

Techniques• Survey

Questionnaire (100 people)Objectives• Create hypothesis• Validate them• Find behavioral

Descriptions• Find Causal

relations

Objective• Analysis of

findings• Final

Recommendations

Chathurya P, LIBA Hunt for the lions challenge

QUALITATIVE RESEARCH QUANTITATIVE RESEARCH

5

Qualitative Research: Phase One- Digital platform

Tele-Conferencing&

Face to FaceLoosely

StructuredOne-on-One

10-15 minutes each

Sample Size 25

Influenced by the

respondent’s responses

Laddering Technique

Depth Interview:

Teleconference

Random Sampling from

customers


TargetDigital banking customers

Techniques Depth interview: Tele-conferencing

Objectives Identify the factors which delighted them

Identify levels of recognition of various digital banking channels:

• Top of the Mind• Spontaneous• Aided

Depth Interview Guiding Principles

Identify features which could be replicated across touch points to drive delight

Identify what features delighted customers

6

Qualitative Research: Phase two- Branch Platform


TargetBranch banking customers

Techniques

ObjectivesLearn their perceptions

Identify delight factors

Hidden Issue Questioning

aimed at understanding the pain points

Depth Interviews

Projective Techniques

Depth Interview

Random Sampling from Branch banking

customers

Sample Size:

35

Projective Technique

Identify levels of recognition of from branch banking• Top of the Mind• Spontaneous• Aided

Depth Interview Guiding Principles

Identify what delight points and pain points were there in branch banking customers

Obtain clues on possible changes as well as new additions, to drive delight

Methodology

• 50 telephone calls• 20 Digital banking customers• 30 Branch banking customers

• 10 face to face interviews


Phase I:Digital Customer Happy Points• “I can save a lot of time by doing my transactions online!”

• “The service is very prompt. That is one of the best things of ING Vysya”

• “ I save a lot of cost through digital banking. No fuel charges, no energy wastage and no time wastage ”

Time & cost saving Latest

offeringsEasy access & use

ConvenienceSpeed of

transactions

Toll free service

Accuracy

Email updates & SMS alerts

• “ING vysya’s website provide information about all their latest offerings which is very useful”

• “SMS alerts of all transactions are very useful. I can always cross check when I tally it later”

• “Digital banking is very helpful . Money transfers are done within fraction of a second”

• “Good thing about ING Vysya online portal is that it is very simple and easy to understand”

• “Whenever I have a doubt, I call the 1800 toll free number. It is very easy.”

Phase II: Branch Customer Happy points

• “Bank personnel can hand hold me through all my transactions!”

• “It is a time of joy when I get to meet many of my fellow pensioners”

• “I get very personalized services. Bank manager treat me like a guest”

• “There is absolutely no security issue. I can verify my accounts real time”

• “I don’t trust internet banking. There can be lot of frauds. Therefore I prefer branch banking”

• “I am not a tech savvy person. I don’t understand banking online. I do all transactions via my branch”

• “I am very comfortable with ING vysya’s branch services. No need to panic”

Full security Trust

Ancillary services

Socializing venue Direct

verification

No complexity

Assistance

Personalized servicesReasons for w

hy do customers buy fro

m where they

buy???


Phase I :Digital Customer Pain Points Phase II : Branch Customer Pain Points

Long queue

Low speed

Time consuming

Not available 24*7

Mistakes in accounting

Unfriendly behavior

Less documentation

No full fledged services

Lack of good virtual assistant

En cash reward points

No customization

Transaction summary

details

Reasons for why do customers buy from where they buy???

• “I cannot take DD online. Why can’t they provide that functionality?”

• “I need to visit branch to change my contact number. It would be better if they have biometric verification system”

• “I often get confused between lot of products. Why don’t they provide a small write up on all such details??”

• “Features are same for everyone, I need some sort of personalization”

• “While doing online transactions, I get a weird number in my account summary. It would be better if they can give the website URL”

• “Long queue inside the branch during first week of the month is disgusting!”

• “They do wrong credit and debit sometimes. I face all the problems thereafter !”

• “ I am 60+, branch banking is unavailable on Sundays. I need to plan my things early”

• “some times, bank personnel takes a lot of time to respond. They are unfriendly “


• Loss of reputation• Loss of data security• Loss of privacy

• Convenience• High Speed• Cost saving• 24*7 availability• Accuracy• Security

SWOT analysis- Digital banking

• Leverage of big data analytics

• Biometric verification• Mobile platforms• Integrated marketing

communication through social media platforms

• Less customization• Absence of full fledged

services• Lack of integrated

communication • Non initiation of ancillary

services Weakness

Threats

Strengths

Opportunities

SWOT

SWOT analysis- Branch banking

• Digital disruption throwing branch into oblivion

• Core banking solutions leading to single integrated Omni channel banking

• High customization• Full fledged services• Direct verification

• Time consuming• Prone to operational

risk• High cost of operation• Absence of 24* 7

services

• Sales and advisory services

• Cross selling services• Relationship

management center• An Apple store

approach

SWOT

Weakness

Strengths

ThreatsOpportunities

10

Quantitative Research: Phase three


TargetBranch banking customersand Digital banking customers

Techniques

ObjectivesCreate hypothesis and validate themFind behavioral Descriptions and causal relations

Hidden Issue Questioning

aimed at understanding the pain points

Survey Questionnaire

Survey Questionnaire

Students,Professors,

Professionals and Retired

people

Sample Size: 100

• Identify levels of recognition of from branch banking and digital banking services

• Validate reasons for customer preferences over a particular channel

Survey questionnaire :Guiding Principles

Identify the factors that could be changed to create customer delight

Obtain clues about customer needs in the future banking scenario

Survey questionnaire :Sample format


Near Field communication [NFC]

devices in all retail outlets

Future expectations from Digital banking-Customer VerbatimVideo

assistance

Integrated one window clearance for smaller transactions

Personal finance management

E walletDD

OnlineBio metric

scanning systems

Transaction summary with website URL details Foreign exchange

transactions

Omni channel interface

Multi level-multi channel

security

Full fledged digital services

Digital signature

1 Customer- 1 ATM card

Online

Loan

• Industrialization Flawless delivery on basic needs

• Virtualized banking services Provide convenience ,choice and control

• Social needs and empowerment Hyper connectivity

• Self fulfillment Personalization and data intelligence

Future pillars of digital banking


ING VYSYA PERGO- The Future Digital Banking Platform Model“ING VYSYA PERGO- One stop solution low end disruption model for ING Vysya to cross upcoming digital hurdles”

TargetDirect to customer banking service“Striver” individuals- who value money

BenefitsLow cost structure- No branch infrastructure neededHigher interest rate on savingsLower service chargesLess fees charged

ProductsSavings accountFixed deposit [FD] accountHome loan and education loan4 mutual fund portfolios

Channels

TelephoneMobile devicesDesktop PC

Telephone Email

Direct login

Existing bank A/C

details

Money deducted

from source

Creation of a Savings

bank account

Customer places

order in digital portal

IFSC code existing other bank account numberDigital signatureNecessary digital proof

Confirmation throughEmail and SMS

A model to create a savings bank/FD account through PERGO

Central PERGO clearing house

Customer wants to create a savings account/FD account


ING VYSYA PERGO- The way ahead

For mutual funds, there are four major ING VYSYA funds which are sold through PERGO

• Large cap fund • Medium cap fund• Small cap fund• Debt fundMix of these are provided to customers according to aggressive, conservative and moderate risk appetite

Infrastructure Four call centers across IndiaMumbaiChennaiDelhiKolkata

Capacity50,000 customers per day

TrainingCall center executives trained on exclusively four products-Fully focused and in depth training

THE BANK OF THE FUTURE-PERGO

Industrialization

Virtualization

Social needs

Self happy

Standardize|Optimize|Cooperate|Safely hold cash|Process transactions|Provide credit|Manage account

Integrated channels|When|Where|Why|Whom|Choice|Control|Convenience

Information empowerment|Hyper connectvity|Leverage of social media platforms

Self fulfiment|Data intelligence|Leverage of big data analyics|Perosnalization

Customer delight


Financial viability studyValue in Rs Crore

2015 2016 2017 2018 2019 2020Interest earned 1200.00 1440.00 1728.00 2073.60 2488.32 2985.98Other income 250.00 295.00 348.10 423.00 499.14 588.99Total income under "PERGO" 1450.00 1735.00 2076.10 2496.60 2987.46 3574.97Interest expense 1400.00 1435.00 1470.88 1507.65 1545.34 1583.97Employee cost 300.00 309.00 339.90 373.89 411.28 452.41Selling and admin expenses 200.00 205.00 210.13 215.38 220.76 226.28Depreciation 12.00 12.15 12.30 12.46 12.61 12.77Operating expenses 280.00 286.16 292.46 298.89 305.47 312.19Misselenaeous expense 70.00 72.80 75.71 78.74 81.89 85.17Total expense under "PERGO" 2262.00 2320.11 2401.37 2487.00 2577.35 2672.78Operating profit under "PERGO" -812.00 -585.11 -325.27 9.60 410.11 902.19

Financial analayis for "PERGO"-ING VYSYA's digital banking platform

• Break even to reach from III rd year of operation. • PERGO interest earned growth estimated to be 20 % YoY• Operating expenses are very less compared to traditional model as there is no

branch infrastructure• Initial marketing spend for “PERGO” will be high as trust factor and fool proof

model of PERGO to be communicated to customers • Software expenses to be spent on network design, architecture and software

implementation using various technologies and anti data theft and fraud proof soft wares

• Hardware requirements include that of networking devices such as routers, data servers etc

1 2 3 4 5 60.00

1000.00

2000.00

3000.00

4000.00

5000.00

6000.00

7000.00

8000.00

Operating Profit YoY

Operating profit under "PERGO"Total expense under "PERGO"Total income under "PERGO"

Value in Rs Crore

Software expenses 1400Hardware expenses 750Employee hiring 60Employee training 120Marketing spend 320Misseleneous 150Total spending 2800Investment(Own fund) 2800

Start up requirements


ING Vysya- Products analysis and their way forward in PERGO frameworkWealth Management Services• Company snippets for investment recommendation to be made and communicated

regularly• Current “Apply now” option to be directed to PERGO portal

PERGO Secure Wallet• Pay through PERGO e-Wallet• No need to type card number , expiry date every time• Encrypted, safe and secure payment route

Zing , Zwipe and Platina Savings account• Zings account to be combined with educational account within PERGO framework • Zwipe account can be modified to encash earned reward points• Regular update calls to customers to detail about products and account facilities

Term deposits• As infrastructure costs are less, additional interest rates can be given in PERGO accounts• Interest accrual and maturity dates can be notified earlier and ask for deposit renewals• Current “Apply now” option to be directed to PERGO portal

NEW PRODUCT DEVELOPMENT

“PERGO INSTANT”Quick money transfer services across 25 countries

• Enables to send money across nations within a click of a laptop, mobile or tablet

• Low services charges• Safe and secure• Locked in exchange rates• Regular tracking on money

transitThank You! Please note: Survey response sheets and reference files for secondary research are attached along with the PPT in the mail


ReferencesDocuments

• Asia Financial Institutions- Digital Banking in Asia; Winning approaches in a new generation of financial services.pdf

• 201407digitaldisruptioninbanking- accentureconsumerdigitalbankingsurveyonline-140702114251-phpapp02.pdf• 20130328webinartrendsengagementbanking-v2-130328140603-phpapp02.pdf• ABASurveyShowsMoreConsumersPreferOLB.pdf• accenturereporteverydaybank-140317235903-phpapp01.pdf• bringthebranchexperiencetotheatm-121009084817-phpapp01.pdf• Banking-on-Data-Science.pdf• How-Banks-Can-Use-Social-Media-Analytics-To-Drive-Business-Advantage.pdfWebsites• www.ingvysyabank.com• https://www.xoom.com• https://www.payzippy.com/• http://www.hdfcbank.com/• http://www.rbi.org.in/• www.moneycontrol.com• www.nseindia.com• www.sbi.co.in• www.icicibank.com• www.khanacademy.org

http://www.ingvysyabank.com/

https://www.xoom.com/

https://www.payzippy.com/

http://www.hdfcbank.com/

http://www.rbi.org.in/

http://www.moneycontrol.com/

http://www.nseindia.com/

http://www.sbi.co.in/

http://www.icicibank.com/

http://www.khanacademy.org/