This report analyze various statistics and facts about branches, ATMs, Self Service terminals and its relationship to reflect on strategy adopted by financial institutes in India.
It also gives some recommendation for future growth path on various influencing factors to increase revenue, develop various products and services for customers segments.
- Introduction:
In 2013, Indian banking sector maintained asset size of USD 1.8 Trillion with bank deposits have grown at compounded annual growth rate(CAGR) of 21.2 % over FY06 to FY13. in FY13, total deposits were ~ USD 1,274 billion with credit take of USD 991 billion
as of FY 13 and credit off-take grown at CAGR 22.8% over FY06 to FY13.
1.1. Business Factor: Source of Deposit:
Bank's raise deposits from several sources from market but, cheapest form comes from retail customers at cost of deposit of ~ 5 to 6 % that's fund which remains in savings and current accounts.
According ICRA Research Services, CASA (Current Account and Savings Account) share was ~ 31.5% for FY13 of course which is lower than ~36 % in FY11. Instead of deep dive aside for the reasons of decline for moment, banking sector have secured low cost CASA
deposit of USD 401.6 billion for FY13.
1.2. Technology is Key for Retention:
Traditionally, banking services to serve CASA customers were typically using branch network and banks in India are no different to open branches near to the population. In last decade, technology development enabled business growth with more and more business
leaders demanding innovation from its technology team in banks. Advent of Information technology and telecommunication helped banks to further provide more convenience to their customers using digital self service channels such as ATM, self service terminals,
Internet banking, mobile banking, social media and more.
These new technology unfolded into new competition and challenges among banks to differentiate and innovate their banking services such as demand for core banking system, debit cards, credit cards, IVR and call center, CRM, analytics and more to always remain
in touch with customers and their demand for banking services.
Mere Customer services portfolio change into customer feedback, brand and co-brands, customer experience management to measure, monitor and control churns.
In last two decades, technology solved business issues for the banks as well as opened new issues at each milestone of maturity. Legacy systems takes time to respond to new digital technology and digital services thus, agenda of Digital banking expected
around the corner.