Imc Mrssoundarakumar Sbi(Retail Banking)

8/2/2019 Imc Mrssoundarakumar Sbi(Retail Banking)

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RETAIL BANKING

STRATEGIES FOR THE FUTURE

Mrs. Soundara KumarGM Personal Banking

State Bank of India


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Present Scenario

Indian retail banking has been showingphenomenal growth

In 2004-05, 42% of credit growth came fromretail

Over the last 5 years CAGR has been over 35%

Retail credit levelcrossed Rs.189K Crore in2004-05

Market has transformed into a buyersmarketfrom a sellersmarket

Comprises of multiple products, channels of

distribution and multiple customer groups


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Economy vs. Retail Banking

Retail assets are just 22% of the total bankingassets of India

Contribution of retail loans to GDP:

India 6% China 15 %,

Thailand 24% Taiwan 52%

Indian population below 35 yrs of Age70 %

Reach of Formal Banking Channels 20-25%

of Indian population

Source: Cygnus Industry Insight


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Auto28%

Other personal

Loans

16%

Home

49%

ConsumerDurables

7%

Market Share: Retail Loan - 2005


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Drivers Of Retail Growth

CHANGING CONSUMER DEMOGRAPHICS Growing disposable incomes

Youngest population in the world

Increasing literacy levels

Higher adaptability to technology

Growing consumerism

Fiscal incentives for home loans

Changing mindsets-willingness to borrow/lend Desire to improve lifestyles

Banks vying for higher market share


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Industrys response to the change

Anywhere,Anytime Banking

Improved processes/Bundled product offerings

Faster service/Reduced TATs

Customer specific products/offerings on a regularbasis

Bank customer has replaced Branch customer

Focus on understanding customer needs/

preferences

Segmentation/Differentiation of customers

Customer driven strategies

Building relationships


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The accelerated retail growth has been on a historicallylow base

Penetration continues to be significantly low compared

to global bench marks

Share of retail credit expected to grow from 22% to 36%

Retail credit expected to grow to Rs.575,000 crs by 2010at an annual growth rate of 25%

Source: Cygnus industry insight

Future Of Retail Banking


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Future of Retail Banking Contd.

Dramatic changes expected in the creditportfolio of Banks in the next 5 years

Housing will continue to be the biggest

growth segment, followed by Auto loans

Banks need to expand and diversify byfocussing on non urban segment as well as

varied income and demographic groups

Rural areas offer tremendous potential toowhich needs to be exploited


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Strategic prerequisites.

Performance oriented leadership

Sophisticated marketing and sales

Efficient distribution channels

Process efficiency and ease of scalability

Superior credit policy, procedures and skills

Source: Mckinsey


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Challenges

Sustaining Customer loyalty

NPA reduction & Fraud prevention

Avoiding Debt Trap for customers

Bringing Rural masses into mainstream banking


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Strategies for Future

Reaching to masses : Need to customize

Customer segmentation/differentiation

Data mining/CRM based campaigns

Products per customer/loyalty

Promoting low risk retail lending products

Offer an array of products and financial advisory.


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Strategies for Future Contd.

Cost effective expansion

Renewed emphasis on superior execution by

front-line employeesGrow through Alliances:

Hospitality Education

Retailers Automobiles

Consumer Durables Housing/Construction


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The bank that best addresses and anticipates

customers needs, delivers consistently higher

quality service and connects to the customer

via their channel of choice wins

Y.Y.Chin, OCBC Bank

Winning Strategy


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Thank You !

Documents

Imc Mrssoundarakumar Sbi(Retail Banking)