Ashish BahetiIIM Shillong

ING CASE STUDY COMPETITON

Executive SummaryPrimary ResearchInsights from ResearchSegmentation & Targeting SWOT of Branch BankingSWOT of Digital BankingPresent ScenarioFuture Ahead and InnovationsConclusion

THE ING CASE STUDY COMPETITON- 2014 3

Executive Summary• Compare Digital Banking and Branch Banking and understand their

pros and cons• Understanding the different types of Digital Banking and the different

services which they offer currently• Finding out why people use these type of services aided by online

survey and desk research• Roadmap for the future by bringing innovations like highly customized

services at an individual level with the help of data mining and machine learning and entering the new markets by educating the market

THE ING CASE STUDY COMPETITON- 2014 4

Primary Research

Data included people of age group

from 18-50

People from diverse backgrounds like

Businessmen, Service men Student,

Housewife, Software-Developer, Doctors, etc.

Gender diversity

People from various cities

across the country

Data mixture

Data Sheet

3.45

34.48

36.21

15.52

5.17

3.45 1.72

NUMBER OF OVERALL TRANSACTIONS %WISE

0 1 2

4 7 10

15 25 50

100

0%1%2% 3%5%

7%

12%

23%

47%

NUMBER of Digital transaction %-wise

0 1 2

4 7 10

15 25 50

100

THE ING CASE STUDY COMPETITON- 2014 5

Insights from Data …

8%

23%

14%8%

21%

18%

8%2%

Percentage wise Transaction Business Transaction

Mobile and DTH Recharge

Online Term Deposit

Pay Taxes

Funds Transfer

Viewing A/C Details and Recent Transactions

Shopping

Withdrawal

5%

52%16%

23%

2%2%

Percentage wise difficultiesSecurity Concerns, Looks very complex

Security Concerns

Looks very complex

Others

Security Concerns, Looks very complex, Too tough

Branch Banking is more suitable for me

After analysis of primary data, it was found that major issue which stops online transaction from over taking branch banking are security concerns.

Going through the survey results it was found that the majority of

the transactions are used for Recharging cell phones & DTH, Shopping, Fund Transfers and

Viewing A/C Details.

THE ING CASE STUDY COMPETITON- 2014 6

How Digital Banking sees the market ..

Segmentation&

Targeting

Readiness- Stage

Unaware - No digital knowledgeAware - Digital knowledge but not using digital banking

Interested - Using digital banking.

Age groupLess than 25 years of age

25-40 years of ageMore than 40 years of age

I don’t use digital banking because of security issues

I want to use digital banking

but it is very complex ..

Target Group

0-17 18-21 22-26 27-31 32-36 37-44 45-1000

10

20

30

40

50

60

0

52.6315789473684 48.9473684210

52638.4615384615

385

47.0588235294118

6.250

Digital Banking as a percentage of overall Transactions

Age Group

Perc

enta

ge

THE ING CASE STUDY COMPETITON- 2014 7

SO

WT

Analysis of Branch Banking

STRENGTHS Customer Relationship Management is there

because of Personal Interaction Security Concern is not there as it is traditional

concept and bank was viewed as something very safe

Up-gradation Cost is low as the up-gradation of infrastructure doesn’t take place very quickly

WEAKNESSES× Generalized products – same products were

offered for all customers× Cost-Disadvantages as we need to pay for the

staffs and the building× Slow Transaction Process as it is done by people× 24*7 service is not there

OPPORTUNITIES• New Technology/Innovation

• New Markets/Emerging markets – Rural Market

• New Products or Customised Products

• Customer engagement when staffs can be trained with both good soft skills and knowledge about the products and services which the banks offers

THREATS• Substitute Products like Digital Banking

• Govt. Regulation

• Continual change in Technology so the staffs need to be trained and that incurs a high cost

THE ING CASE STUDY COMPETITON- 2014 8

SO

WT

Analysis of Digital Banking

STRENGTHS Transaction Process is very fast

24*7 service

Increased accuracy as the data is entered directly by the customer

Customised Products because we get to know customer much better

Global Area Coverage i.e. can be accessed anywhere

WEAKNESS× Customer Relationship Management- still a large

population wants to have a manual intervention for their service

× Up-gradation Cost is High and Technology changes very quickly

× Security Concerns is a big issue when it comes for digital banking

OPPORTUNITIES• New Technology/Innovation- Huge scope and it is

believed that digital marketing still doesn’t knows its potential

• New Markets/Emerging markets – Rural market is something which can be tapped efficiently

• New Products – Bring new and customised products

• Social engagement – On a long term basis there should be social platform to engage with customers

THREATS• Volatile Revenue – Still the growth cannot be predicted

• Substitute Products – Older Technology will be slowly taken by advanced products

• Govt. Regulation – Any change in norms can impact the sector very badly

• Continual change in Technology so one needs to be updated else competitors will take over

9

Present Scenario …

Points of Access

• Internet Banking• Mobile Banking• Phone Banking• SMS Banking• IMPS• Automated Teller Machines

Services includes

• Funds Transfer• Bill Payments like:

• Mobile/Landline• Electricity

• Term Deposit• Pay Taxes• Viewing Account and Transactions

details

THE ING CASE STUDY COMPETITON- 2014

What people say ..P1: Mobile Banking is very convenient to use.P2: At times Net Banking seems very risky when you have high balance.P3: For transferring funds instantly IMPS is best for me.

What experts say ..Technology has always impacted our life and digital banking will change our life-style. Digital Banking is bound to change a lot …

10

The Way Ahead …• Overcome Security concerns• Divide the customer’s account into two parts, low-level account for day to day

small amount transactions and high-level account for occasional high amount transactions• For daily transactions the customer will use low level account. This will be

very simple and will allow customers to risk a predefined small amount. This will build confidence in the minds of the customer• For occasional transactions the customer will use high level account. This will

have high security

THE ING CASE STUDY COMPETITON- 2014

Main Account

Low LevelAccount

High LevelAccount

Daily Transactions

OccasionalTransactions

Very Easy and Simple

High Security

THE ING CASE STUDY COMPETITON- 2014 11

The Way Ahead … (Contd.)• Data Mining and Machine Learning• With Mobile number and GPS, track the position of the customer on regular

basis and develop insights from them• Suppose a particular customer regularly goes to a nearby mall for general

shopping and the GPS says that customer is nearby then notify the customer of any ongoing offers in the malls (if any)• This will be an additional and customised service and the bank will profit as

the transaction is likely to be digital (as it will be an unplanned transaction)

Receives On-going Sales

OfferGoes to Mall

THE ING CASE STUDY COMPETITON- 2014 12

The Road Ahead … (Contd.)

• Do routine work of the customer• Tie-up with major telecom companies for paying the bills of the customer

directly without the customer doing it manually – this not only gives extra benefit to the customer but also reduces traffic• Pay School fees directly• DTH Recharge every month

PASTFUTURE

PRESENT DAY ..

THE ING CASE STUDY COMPETITON- 2014 13

The Road Ahead … (Contd.)

• Penetrate into untapped market• Rural market

• Make people aware • Tier II and Tier III cities

• Tie-up with restaurants and give customers a delight factor

Sunday

No free table but bank has provisions

Make your

weekend count

Seminar at tier II and tier III cities

THE ING CASE STUDY COMPETITON- 2014 14

The Road Ahead … (Contd.)

“Cloud Computing may be a black box, but E-locker is easy to use and very safe too”

E-LockerScanSaveSecureStay Connected

Storing documents

online to make it more

accessible 24*7

THE ING CASE STUDY COMPETITON- 2014 15

Conclusion

• Some of the benefits of Digital Banking as compared to Branch Banking are Convenience, 24*7 service and transactions at your click• Currently major transactions take place at bank branches and the

digital transactions have not yet been leveraged to its full advantage• The bigger and unrealized market still remains the rural market which

needs planning and execution like awareness programs about benefits of digital world• The roadmap for future can be to gain trust from the customers with

respect to security and bring innovation like gaining insights from customer behavior, E-Locker, etc.

THE ING CASE STUDY COMPETITON- 2014 16

THANK YOU