supply_chain_management_in_banking_sector.pdf

8/18/2019 Supply_Chain_Management_in_Banking_Sector.pdf

1/37

SCM IN B ANKING SECTOR1


2/37

PRESENTATION FLOW

Service Industry – Features

SCM in Service Industry

Banking Industry – Overview

Problem Statement Objectives for FY2010

Retail Banking (Liquidity and Credit Management)

Credit Card Delivery Mechanism

Corporate Banking

HNI Banking

2


3/37

UNIQUE FEATURES OF SERVICE INDUSTRY

The customer – a participant in the

service process

Simultaneous production andconsumption

Perishability

Limited Scale EconomiesLabor Intensiveness

Intangibility3


4/37

SCM IN SERVICE INDUSTRY

SupplierRelationshipManagement

Source

Negotiate

Buy

DesignCollaboration

SupplyCollaboration

IntegratedSupply ChainManagement

Strategic Planning

Demand Planning

Supply Planning

Fulfillment

Field Service

CustomerRelationshipManagement

Market

Price

Sell

Call Center

OrderManagement 4


5/37

B ANKING INDUSTRY

•CASA Deposits

•WholesaleDeposits

Investors - Aggregate Deposits

• CashManagement

• CreditManagement

Intermediary -Banks •Retail Credit

(Secured andUnsecured)

•Wholesale Credit

•Non-interest income

Customers - GrossCredit

5


6/37

O VERVIEW OF THE B ANKING SECTOR IN INDIA

50.50%

23.80%

17.10%

5.60%3.00%

Deposits

Nationalized Banks

SBI and Associates

Other Scheduled Commercial Banks

Foreign Banks

Regional Rural Banks

50.50%

23.70%

17.80%

5.50% 2.50%

Gross Credit

Nationalized Bank

SBI and Associates

Other Scheduled Commercial Banks

Foreign Banks

Regional Rural Banks 6


7/37

SCM IN B ANKING

7


8/37

PROBLEM STATEMENT

Vision – To be the No.1 Bank in India in terms of

Aggregate Deposits and Gross Credit.

Mission – To provide holistic banking services

customized to each individual.

Goal – To become a high performance bank in

terms of CASA Deposits and Good Credit

Portfolio.

Problem Statement – Design SCM for executing

strategy for FY2010 of ICICI Bank.

8


9/37

STRATEGY FOR FY 2010 ICICI B ANK

9


10/37

CURRENT SCM - M’S M ANAGEMENT

10

Man Management Depositors

Customers

Method Management mySAP for SRM

Siebel for CRM

Material Management Liquidity Management

(BI Tool)

Credit Management(Finnone)

Machine Management Servers and

Infrastructure

Branches and Outlets

Products (CRM)

CreditCards

Treasury Loans AdvisoryServices

Bank (ISCM)

CashManagement

CreditManagement

ChannelManagement

Suppliers (SRM)

Depositors Investors


11/37

RETAIL BANKING

11


12/37

RETAIL B ANKING

To increase CASA in comparison to WholesaleDeposit and increase low cost CASA

Strategic Location - Location in Tier II(Pune, Kolkatta, Hyderabad) and Tier III Cities(Jaipur, Ghaziabad, Kochi)

Specific Targets - Focus on Small Time Tradersand Working Class in Small Companies

Technology Driven Products - Increase theamount of cashless transactions using Internet andMobile Banking.

Core Banking Solutions – It reduces customerturnaround time and provides anywhere banking.

Marketing – Increase canvassing using technologyin order to reduce cost of deposit acquisition. 12


13/37

13


14/37

RETAIL B ANKING

To increase Capital Adequacy and reduce

unsecured retail credit

Target Credit - Focus on secured credit and reduce

high risk weighted assets.

Increase Fee Based Income – Increase fee incomefrom issuing Letter of Credit and Guarantee.

Restructure Products – Reduce dependence on retail

loans like Home and Car Loans and provide loans for

Working Capital.

Reduce Cost of Marketing – Approach clients withcustomized technology driven products.

14


15/37

CREDIT C ARD SUPPLY CHAIN

15


16/37

JUST IN TIME SERVICES

Banks are more intimately linking their systems

with the enterprise resource planning (ERP)

systems of their clients

Just-in-time financing arrangements

As banks become more attuned to what's going

on in clients' supply chains, they can make better

financing decisions for them

So instead of providing a general working capital

loan, you can offer a transaction-by-transaction

loan

16


17/37

P APERLESS TRANSACTIONS

Banks are using SCM to further eliminate paper

from the world of international trade

Automation stops at the interface point between

counterparties

Banks are increasingly incorporating imaging

and workflow engines, not paper and checks

thereby reducing middlemen like courier service

providers.

This kind of real-time, actionable data

availability is speeding up supply chains to get

more transparency and visibility into them17


18/37

P AYMENT HUBS

Provide clients with one view of all theirtransactions

Clients can portal in and see which wires havecleared by going into an individual system

EVOLVING PAYMENT METHODS Transition from Letter of Credit to OPEN

ACCOUNTING

In this case, banks need only make the wire transfer.But this method places the onus on the buyer to

examine the invoice information to make certain it isaccurate.

Banks are creating new Web applications to supporta digital open account so the buyer and seller havevisibility into the transaction 18


19/37

WHOLESALE BANKING

19


20/37

WHOLESALE OR CORPORATE B ANKING

Products offered

Cash Management Services

Capital Market Services

Trade Services

Trade Finance

20

http://www.yesbank.in/tb_cashms.htmhttp://www.yesbank.in/tb_capms.htmhttp://www.yesbank.in/tb_trades.htmhttp://www.yesbank.in/tb_tradef.htmhttp://www.yesbank.in/tb_tradef.htmhttp://www.yesbank.in/tb_trades.htmhttp://www.yesbank.in/tb_capms.htmhttp://www.yesbank.in/tb_cashms.htm


21/37


21


22/37


Trade Services/ Trade Finance

22


23/37


Working Capital Management

23


24/37


24


25/37

HNI/ PRIVATE BANKING

25


26/37

HNI / PRIVATE BANKING

Personalized Attention: Dedicated Client

Relationship Manager

Private Banking Services (Doorstep Banking)

Exclusive Phone Banking and Internet Services

Loans at Preferential Rates

Customised Business Solutions

Hassle - free Foreign Remittances

Waiver on a host of service charges

26


27/37

RMapproachesHNIs-establishesrelationship

HNIsrequired tomaintain aminimummonthly/quarterlybalance

Designing ofproductsbased onHNI’srequirements.Managementof their

portfolios, bya dedicatedWealthManager

ContinuousClient

Interactionand offeringspecialprivileges-Waiver ofannualfees, banking

charges, special deals etc.

HNI / PRIVATE BANKING

27


28/37

•Cross selling of products as a major area of focus

•Creation of concept of DSA (Direct Selling Agent) and

DST (Direct Selling Team)

•Effort on the part of the bank to reach the customer

rather than waiting for the customer

•Use of internet, mobile, ATM’s and othertechnological device to reach and serve the

customers

DISTRIBUTION STRATEGY

28


29/37

CROSS SELLING

29

Deposits

Pvt. banking

Credit card

Debit cards

Bonds

Insurance

Loans

Mutual funds

Walk in

customers

Private banking

customers

Salary account

customers

Corporate

banking

customers

Customer service &

sales force automation

Campaign management

solutionsLive data warehouse


30/37

CRM capability will be built on a “Teradata” data warehouse that integrates

data from multiple sources, including the Oracle database and various flat files.

For enterprise intelligence, the bank will take on the end-to-end propositionof SAS which offers a credible integrated approach to analytics, including datadetection, data cleansing, data preparation, reporting and business

intelligence.

Lead management - The bank will build a lead management system which isable to allocate leads, schedule meetings, provide a record of all interactionswith the customer, and give reminders for customer follow-ups.

A lead generation tool will also be used to capture and route productapplications made over mobile phones.

TECHNOLOGY FOR CRM

30


31/37

RECENT PRACTICES IN THE BANKING

SUPPLY CHAIN IN INDIA

Evolution of structured solutions in receivables

management

Faster realisation at an economic cost for paper-

based clearing, and possible elimination of paper-

based practices Geographic coverage to match the customers’

presence, even if the bank is not physically present in

the area

Electronic receivables through RTGS, NEFT

Interface with ERP for customised receivables

reporting

31


32/37



Banking process outsourcing – Processes used by

companies to improve their receivables

management

32


33/37



Banking process outsourcing – Chequewarehousing and management, bilateral direct

debit arrangement

33


34/37



Banking process outsourcing – Virtual accounts

for electronic receivables

34


35/37



Supply Chain Financing Consequence of recession around the globe

Banks provide integrated financial products for all partners ina company’s supply chain

Dealer Financing – Exclusive financing facility to the dealers

or distributors of a particular corporate Factoring of Receivables - Purchase of accounts receivable at

a discount - enables better cash management for the seller.

Purchase Invoice Financing or Vendor Financing - Providefinancing to vendors of a particular corporate against sales madeto the corporate.

Warehouse Financing - Goods are held in trust as collateral forthe loan

Rent Receivable Financing - For companies involved inrenting out goods like computer hardware, etc to othercompanies.

Cross Border Transactions - Products for providing supply

chain financing solutions to corporates involved in internationaltransactions.

35


36/37

REFERENCES

ICICI Web Site http://www.icicibank.com/aboutus/invest-relations.html

http://www.icicibank.com/aboutus/invest-relations.html

RBI Web Site http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/SEQ150110_F.pdf

http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/STRB200809_Full.pdf

SCM Concepts and Cases – Rahul Altekar http://books.google.com/books?id=orimz5E6IO4C&pg=PA165&dq=scm+in+service+industry&l

r=&as_brr=3&cd=21#v=onepage&q=scm%20in%20service%20industry&f=false

Banking Concepts http://www.ey.com/Media/vwLUImages/Assurance_XBRL-

How_Can_It_Be_Used/$FILE/imap_banks_465w.jpg

http://www.indianground.com/upcoming-cities.aspx

36

http://www.icicibank.com/aboutus/invest-relations.htmlhttp://www.icicibank.com/aboutus/invest-relations.htmlhttp://rbidocs.rbi.org.in/rdocs/Publications/PDFs/SEQ150110_F.pdfhttp://rbidocs.rbi.org.in/rdocs/Publications/PDFs/STRB200809_Full.pdfhttp://books.google.com/books?id=orimz5E6IO4C&pg=PA165&dq=scm+in+service+industry&lr=&as_brr=3&cd=21http://books.google.com/books?id=orimz5E6IO4C&pg=PA165&dq=scm+in+service+industry&lr=&as_brr=3&cd=21http://www.ey.com/Media/vwLUImages/Assurance_XBRL-How_Can_It_Be_Used/$FILE/imap_banks_465w.jpghttp://www.ey.com/Media/vwLUImages/Assurance_XBRL-How_Can_It_Be_Used/$FILE/imap_banks_465w.jpghttp://www.indianground.com/upcoming-cities.aspxhttp://www.indianground.com/upcoming-cities.aspxhttp://www.indianground.com/upcoming-cities.aspxhttp://www.indianground.com/upcoming-cities.aspxhttp://www.ey.com/Media/vwLUImages/Assurance_XBRL-How_Can_It_Be_Used/$FILE/imap_banks_465w.jpghttp://www.ey.com/Media/vwLUImages/Assurance_XBRL-How_Can_It_Be_Used/$FILE/imap_banks_465w.jpghttp://www.ey.com/Media/vwLUImages/Assurance_XBRL-How_Can_It_Be_Used/$FILE/imap_banks_465w.jpghttp://books.google.com/books?id=orimz5E6IO4C&pg=PA165&dq=scm+in+service+industry&lr=&as_brr=3&cd=21http://books.google.com/books?id=orimz5E6IO4C&pg=PA165&dq=scm+in+service+industry&lr=&as_brr=3&cd=21http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/STRB200809_Full.pdfhttp://rbidocs.rbi.org.in/rdocs/Publications/PDFs/SEQ150110_F.pdfhttp://www.icicibank.com/aboutus/invest-relations.htmlhttp://www.icicibank.com/aboutus/invest-relations.htmlhttp://www.icicibank.com/aboutus/invest-relations.htmlhttp://www.icicibank.com/aboutus/invest-relations.htmlhttp://www.icicibank.com/aboutus/invest-relations.htmlhttp://www.icicibank.com/aboutus/invest-relations.html


37/37

THANK Y OU

37

supply_chain_management_in_banking_sector.pdf

Documents