Akanksha ChawlaXIMB
Case Study on Digital Marketing
Executive Summary
Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model
The role of branches as the hub of transactions in India’s banking sector is undergoing a silent transformation as more and more individuals move to the digital medium for services that once could only be provided through branches. Banks are increasingly viewing branches as a place where they can render services beyond basic banking such as advising people on their savings or selling them investment products. The change is more visible in private and foreign banks in India as they push more and more functions online and use branches as a hub for sourcing loans and providing financial advisory services.This is an era of Millennials, 72% of the Millennials would like to bank with non-financial Services companies with which they do business (like Google or Amazon)* compared to 27% for those who are above 55. Understanding the needs of GenY is a Business Need.The Financial products of Banks have very low differentiation, rate of Interest and terms and conditions being the only differentiating factors. Therefore, “Quality of Services” is the only way of capturing higher market share.Primary research indicates that, People don’t not associate ING Vysya with the word Digital Banking, over banks like HDFC, ICICI Bank. Increasing visibility and effectively engaging the GenY is important through Digital banking Model.Understanding the Customer and addressing the major concern over use of Digital Banking such as Security, Ease of use and Locational Accessibility is important to develop a roadmap for the strategy to leverage Digital Banking Advantage.Another major weakness is the Lack of Customer Relationship Building through the digital platforms. A Digital Plan should not Operate in Silos but in tandem with the Brick and Mortar Banking for better and enhanced customer support and relationship building.In reality, the major sustainable competitive advantage lie in technology, product experience and organizational culture among banks.
*Accenture Report, “The Digital Disruption of the Bank”
Digital Marketing Vs. Branch Banking Why do customers buy from where they buy?
Digital Banking• Fast and Secure Processing• Accessible at Finger tip• Maximize customer contact capability• One Stop shop to multiple customer needs• Easy place to check Balance, Transfer Funds and Pay Bills and other Facilities like FD/ RD, Mobile
Recharge etc
Branch Banking• NEFT/ RTGS Transactions of Larger amounts for those who are skeptical for Theft• Depositing Cash• Creation of DD • Basic Formalities like change of Names, address and other details• Unavailability of Internet
Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model
“Data from RBI indicates that the rate at which the urban branches were increasing is seeing a decline, while semi-urban and rural branches have picked up in pace in the last few years. Digital banking no doubt has had a role to play in this,” - Saurabh Tripathi, partner and director at The Boston Consulting Group (BCG)
SWOT Analysis of Digital Marketing
Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model
Strength Weakness
Threat Opportunity
New Age marketing Competitive advantage for economies of scale Rich customer resources Customer See Same bank through Multiple Touch points –
Omni Channel Simplicity and Immediacy at the convenience of the
customer
Risk of losing customers due to poor online banking experience
Increase of cyber crime Online banking risks, credit card skimming and data leakage
leading to operational and reputational risk
Low Internet Penetration Poor CRM Lack of security Tendency to missell due to lack of face-to-face interface Low literacy of online financial services
Greater penetration and improved touch points Low cost- Lesser Cost to the Bank per Transaction Increased demand for financial products Scope for better customer account maintenance and data
analytics
Primary Research: Introduction to the Respondents
Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model
22%
73%
4%
Age of the Respondents
18-24 25-31 32-38 39-45 45+
Employed with a Private Firm
others
Self Employeed
Employed with Government Services
0% 5% 10%15%20%25%30%35%40%45%50%
47%
43%
6%
4%
Occupation of the Respondents
Below 3,00,000
5,00,000 to 8,00,000
8,00,000 to 12,00,000
3,00,000 to 5,00,000
12,00,000 onwards0%5%
10%15%20%25%30%35%40%45% 41%
22%18%
12%
6%
Annual Income of the People
No Yes0%
20%
40%
60%
80%
100%
120%
4%
96%
Appreciation of Digital Banking
Around 73% of the people are in the range of 25 to 31 years, which is the major target generation for the Digital banking
The Annual Income of the respondents were appreciably varying. This was important to gauge the different needs of different income range customers
About 47% of the of the respondents are Employed with the Private Firms, while 43% are other like part time or freelancers or students
The Survey clearly shows the acceptance and appreciated for Digital Platforms of Banking. 96% of them already uses Digital Platforms
*The entire data report and analysis is attached in Appendix
Primary Research: Perception of Other Banks for Digital Banking
Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model
Rank Bank Name*
1 American Express
2 HDFC Bank
3 Axis Bank
4 ICICI Bank
5 ING Vysya
6 IDBI Bank
7 State Bank of India
The Factor Analysis of the Ranking of the Banks based on the perception of the Respondents
The Factor Analysis of the Ranking of the Banks based on the perception of the Respondents
Understanding the Perception of the Respondents
The ranking was based on the preference of the respondents , the bank which comes first in their minds This means that the visibility of American Express and HDFC Bank and ICICI Bank are higher and they are preferred to the customers for the digital banking platforms
Fund Transfer upto 50,000Fund Transfer for a large amount like 1,00,000 or more
Fund Transfer upto few 1000's
Checking the balance
Any other Additional Features
Movie tickets Booking
Mobile Recharge
Understanding the usage pattern for the Digital Banking Usage
The major transactions which takes place are Fund Transfer below 50,000 and Checking the Balance
* These Banks were selected based on the general perception of their visibility in India
Primary Research: Respondents BehaviorExecutive Summary Digital Marketing Vs. Branch
Banking Customer Insight Road Map Digital Banking Model
Any other
Mobile App of the BankSocial Media such as Facebook
0%
50%
100%43%
55%2%
Major Access Points for Digital banking
33%
67%
Safety of Digital banking
Yes No
80%
20%
Preference for Banking Platform
Digital Banking using Mobile App or Social MediaBranch Banking
Transactional Security
Ease of use of the mobile App
Informational Security
Other add on services (like mobile recharges and movie ticket booking etc)
Important Concern of the Respondents while using Digital Banking in Descending Order of Preference by Factor Analysis
Low ATM AccessibilityWritten FormsTime ConsumingBank Branch is not nearbyBank Branch fixed timing
Important Disadvantages of going to a Brick and Mortar Bank (At the Top is the most important Concern) by Factor Analysis
In a Nut Shell:
Thus, While social media is not considered as the major access point for digital banking (2%), Mobile app of the bank is seen as a very important tool (55%)
The Most Important Factors for for the users of Digital Banking is the Transactional Security and Ease of Use of the mobile App are the major concerns
The major disadvantages for the Brick and Mortar Bank is perceived to be the Low ATM Accessibility and lower visibility i.e. Bank Branch not nearby and higher time consumption
These points are kept in mind to create the Digital banking Model for ING Vysya
*The entire data report and analysis is attached in Appendix
Secondary ResearchAccenture Digital Disruption
48% are interested in real time forward looking spending analysis
71% considers banking relationship to be transactional rather than relationship Driven
27% would consider branchless digital bank
51% want their banks to proactively recommend them products
Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model
HDFC Bank ICICI Bank Axis Bank ING Vysya Bank
Deposits (in Rs. Mn)
1962470 2926136 2526136 413340
Advances (in Rs. Mn)
2397206 2902494 1969660 317720
Benchmarking: ROE, Deposits and Advances**
**data from RBI
• Lower CRAR of ING Vysya vs other banks suggests that it is less capable than others to deal with various types of liabilities and risks
• Higher Deposits to Advances Ratio of ING Vysya vs other banks shows the bank hasn’t got enough customers to lend loans to
HDFC Bank ICICI Bank Axis Bank ING Vysya Bank0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
0
5
10
15
20
25
20.34
13.1
18.53
14.24
4.28%2.70% 3.09%
3.02%
16.80%18.74%
17.00%
13.24%
Benchmarking ROE, Net interest Margin, CRAR**
Return On Equity Net Interest Margin CRAR
HDFC Bank
ICICI Bank
Axis Bank
ING Vysya Bank 0
1
2
Deposits/Advances**
Understanding the different Behavior Preferences Per Channel and Creating the Strategies
Focused • Set Budget
Goals• Apply for
Mortgage• Buy Stocks• Bill Payments• Opening
RD/FD accounts etc.
Physical• Signing for
Mortgage• Depositing Cash• Using ATM for
cash withdrawals
• NEFT transfer of huge Cash amounts
Casual• See Spending
Patterns• View Stock
Portfolio• Balance View• Fund Transfer
upto 50,000
Quick• View Stock
Prices• Payments• View
Account balance
• Mobile Recharges
Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model
Bank Social Media Score* HDFC Bank 5.14 ICICI Bank 4.78 American Express 4.64 State Bank of India 3.64 Kotak Mahindra Bank 3.32
Yes Bank 3.22 Citi Bank 2.82 Bank of Baroda 2.82 South Indian Bank 2.7 Bank Of India 2.52
Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model
Secondary Research: Building Blocks- Situation In India
* Social Media score is of 2010 at www. ifbimconnect.wordpress.com
Ranking Bank Name Bank Category Daily Online Visitors
1 HDFC Bank New Private 4173602 ICICI Bank New Private 4002663 Axis Bank New Private 1598404 SBI SBI & Associates 132534
5 Kotak Mahindra Bank New Private 43956
6 Union Bank of India Nationalised 29748
7 IDBI Bank Other PSU 21756
11 Oriental Bank of Commerce Nationalised 15096
13 Syndicate Bank Nationalised 12654
12 PunjabNational Bank Nationalised 12654
14 ING Vysya Bank Private Banks 9324
Based on the above data, In India, the visibility and perception for ING Vysya for Digital Marketing is low
Digitalization with a Human Touch - 'Quality Service' the sole differentiator for acquiring
market share
Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model
By and large, the products offered by banks across pan India are similar. Products differ from bank to bank in terms of minor variations in interest rates, margins etc. This being the case, in a technology and product neutral environment, the sole differentiator for acquiring market share is the 'quality service' to customers. Quality service is generally associated with transparency in terms, quickness in response, courteous behavior, trust and a strong sense of commitment to serve. The product knowledge is also essential. Quality can be defined on the basis of service as a function of efficient use of technology, product knowledge in terms of its features (including pricing) and rendering of personalized service. The lesser the tendency to misssell, the better will be the service. In reality, there are differences in technology, product experiences, and organizational culture among banks. As banks are moving towards similar technology and products/services, good service becomes the differentiator in acquiring market share.
Leveraging on the Customer
data through the various digital
platforms of the current
capability
Understand the
Customer using Data Analytics
Branch Banking and Digital
Banking go hand in hand; Higher the accessibility,
higher is the brand recall
Increase visibility
Set up two way communication
channels through effective use of social media and increase
touch points like suggestive products to
the customer based on his online activities
Security should be important as it will
build up trust
Effective CRM
Way Forward: Dedicated Team for Digital Banking, Analytics and Social Media
Understanding Customer using Data Analytics- its
an Iterative Process•Data Analytics:•As it is clearly seen, Digital Banking is on the rise, analyzing the Customer Transaction history using Social Analytical Tools •Improvisation: •Leveraging the insights from the customer transactional History to improve the products and service offerings
Increase visibility
•Branch Banking:• ING Vysya Bank is a Old Private sector Bank however, its visibility in Tier I and III cities is low, For the Indian Market, a physical Presence is important to garner trust as in India Word of Mouth is the best way to market•Digital Banking: •Enhancing the Social Media Presence and Improving the Mobile App for ING Vysya Bank by Engaging the GenY the next generation of Banking Users
Giving a Human Touch
•Improved CRM: •Eliminating the major weakness of Digital Banking with providing Quality Service and Quick Problem Resolution, detailed information about Theft and fraud and means to protection and promote transparency •Customer Focused Organization Culture: •Creating a culture where every employee of ING Vysya is dedicated and committed to give the best service to the employees •Creating a dedicated Social Media Team to give quick Response and never shy/run away from complains
Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model
Understand Generation Y: social media is ideal for a better understanding of client behaviour and client interests. The most advanced banking players in this respect are leveraging these new networks to help develop new applications for their products. Significantly, 70% of users say they believe recommendations made through social media, whereas only 20% trust conventional advertising
Digital Banking 2.0Executive Summary Digital Marketing Vs. Branch
Banking Customer Insight Road Map Digital Banking Model
Create your own distribution vision of the future
Develop a portfolio of mini-transformations to deliver the vision• The bank needs to select the
most important things it wants to change so as to translate its vision into action
• Identify the key priority areas
Lock in an integrated roadmap and execute• Maintain and monitor the
portfolio of mini-transformations• Elaborate a high level business
case for pursuing them and monitor progress
• Identify the implications for IT and Governance, and monitor accordingly
Digital Banking 2.0: Action Plan for the Future
Branches are becoming more sales and advice oriented Branches: Right size and boost sales performance• Light Size Network: Optimize Branch Network by adapting both the Location and Branch formats to customers needs• Structure better the time spent on sales. Concentrated periods of commercial activity tend to be more effective and efficient than periodic bursts of activity.
• Industrialize The Sales And Support Process: This can be one of the most productive aspects of any branch transformation. Doing so requires choosing a few routines and processes (activity planning, selection of contacts, standard execution drills, using an activity registry) and aligning each one to a member of the organization so as to ensure they are performed in a controlled fashion. In combination with the right campaigns this can boost sales by 20%-30%
• Provide branch staff with high quality leads, by using the bank’s own data and combining this with customer insights from additional behavioral data• Improve performance management: In order to successfully transform a bank’s branch network staff and managers will require strong performance management
disciplines (for example, operational KPIs that staff can influence, and effective performance dialogues) and proactive skills development
The role of call centers is changing as banks migrate their basic activities to digital channels (notably the web and mobile), and clients dial a call or video center to seek advice and support
Call centers: Make it the preferred channel for
support
• Increase service to sales conversion: the average call center, aided by the intelligent call routing of customers to the best agents, use of CRM, and an approach to performance management that aims to develop the appropriate mindset.
• Upgrade quality to become the preferred channel: increasingly using the call center to provide high quality service and advice (and sales) for customers. This remote phone channel is, today, typically exclusive to certain segments and not available to the full customer base.
• Be ready for video: Visual aspect starts to assume a new importance• Free-up capacity: Reduce the waiting time, call back facilities, scope to improve their demand management with better forecasting and staffing, to reduce call
times, and to optimize call routing
Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model
In India A Bank cannot do away with the Branch Banking, But have to keep a tab on the Digital Space as well
Executive Summary Digital Marketing Vs. Branch Banking Customer Insight Road Map Digital Banking Model
Create the “Apple Experience” - Make digital channels the channels of choice
Digital: Open the Digital Bank before non-banks do
• Increase penetration: Stimulate more customers to use the bank’s apps and websites more often. Create a “wow” experience for clients: innovations might include easier log-on, faster and more flexible transactions, and well laid-out screens.
• Make information easily accessible: for the Aggregator sites to endorse you willingly, If banks do not provide clear and transparent information these aggregators will direct customers to someone else’s site.
• Address security concerns: some 45% of consumers say this is the single most important reason why they don’t bank online. It may be more a matter of perception than reality, but if so banks have to alter that perception.
• Multichannel processes: Optimize to eliminate leakage and improve experience:• Attract high-quality traffic and leads: Use event marketing to attract traffic. This will become an essential part of the initial phase of the purchasing process as customers
increasingly search for information on the internet, notably via aggregators and online benchmarks, before deciding which product to buy (through any channel).• Use CRM and behavioral data: Banks are sitting on an enviable wealth of information, but so far most have only used the tip of the iceberg.• Use targeted personalized marketing: The Internet enables banks to target ‘segments’ as tiny as just a single consumer. For example, to ascertain exactly who has logged on to a
page and then to customize offers or investment advice to that individual
Improve ‘end-to-end’ processes to reduce ‘leakage’ – Great Client experience across all the 3-4 channels per person
Multichannel processes: Optimize to eliminate leakage
and improve experience• Leakage of the kinds: Missing telephone numbers and email addresses on the web, or poor communication between call centre and branch over a customer’s follow
up visit, were among the issues raised. Inadequate search engines and complex forms result in promising leads being missed.• Optimized Processes: Bank is responsible for integrating products, services and channels in a way that ensures delivery of an integrated value proposition to every
customer. Revenue ‘leakage’ can be as much as 60 – 80 % of total generated leads as a result. To improve these processes and identify sources of such ‘leakage’, banks should take what we call an ‘end-to-end’ approach
• Gaining awareness and After sales support are important
Digital Banking 2.0: Action Plan for the Future
Appendix Respondents Data and Analysis:
Banks Benchmarking:
SPSS Analysis:
RBI data used: www.rbi.org.in
Primary ResearchCSV file for
primary research Analysis Report
Bank Benchmarking
SPSS analysis of the Primary Research