Retail Banking ppt

download Retail Banking ppt

of 14


about retail banking business

Transcript of Retail Banking ppt

  • Present ScenarioIndian 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 levelcrossed 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 BankingRetail assets are just 22% of the total banking assets of India Contribution of retail loans to GDP:India 6%China15 %, 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

  • Drivers Of Retail Growth CHANGING CONSUMER DEMOGRAPHICSGrowing disposable incomesYoungest population in the worldIncreasing literacy levels Higher adaptability to technologyGrowing consumerismFiscal incentives for home loansChanging mindsets-willingness to borrow/lendDesire to improve lifestylesBanks vying for higher market share

  • Industrys response to the changeAny where, Any time BankingImproved processes/Bundled product offeringsFaster service/Reduced TATsCustomer specific products/offerings on a regular basisBank customer has replaced Branch customerFocus on understanding customer needs/ preferencesSegmentation/Differentiation of customersCustomer driven strategiesBuilding relationships

  • The accelerated retail growth has been on a historically low 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 2010 at an annual growth rate of 25%

    Source: Cygnus industry insight Future Of Retail Banking

  • Future of Retail Banking Contd.Dramatic changes expected in the credit portfolio 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 by focussing on non urban segment as well as varied income and demographic groups

    Rural areas offer tremendous potential too which needs to be exploited

  • 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

  • ChallengesSustaining Customer loyalty

    NPA reduction & Fraud prevention

    Avoiding Debt Trap for customers

    Bringing Rural masses into mainstream banking

  • Strategies for FutureReaching to masses : Need to customizeCustomer segmentation/differentiation Data mining/CRM based campaignsProducts per customer/loyalty Promoting low risk retail lending products

    Offer an array of products and financial advisory.

  • Strategies for Future Contd.Cost effective expansionRenewed emphasis on superior execution by front-line employeesGrow through Alliances:HospitalityEducationRetailersAutomobilesConsumer Durables Housing/Construction

  • The bank that best addresses and anticipates customers needs, delivers consistently higher quality service and connects to the customer via their channel of choice winsY.Y.Chin, OCBC BankWinning Strategy

  • Thank You !