Transcript Roadmap for Digital Banking in Digital India

Roadmap for Digital Banking in
Digital India – Are we ready for
lift off?
T. V. Mohandas Pai,
Chairman, Manipal Global Education Services Pvt. Ltd
The Global Digital Imperative
Global Digital Economy
The world’s largest
taxi company
owns zero vehicles
The world’s largest
accommodation provider
owns zero real estate
The world’s most
popular media owner
creates zero content
The world’s most
valuable retailer
has nearly zero inventory
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Digital disruption is leading to Existential Crisis for some…
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Banking – Digital Vortex in Action
Company name and logo is a trademark of the respective organizations.
Manipal Global Education Services Pvt. Ltd.
Banks Are Trying To Fight Back..
In house developments
CBA, RBS, Soc Gen, Scotia Bank
Partner with Fintechs
ING, TD bank, Santander
Invest, Incubate, Accelerate
Banco Santander, Barclays, Wells Fargo, Citi
New models of delivery
Hello Bank (BNP Paribas), Soon Bank (AXA Bank)
New Banks
Fidor, Atom, Bank Mobile.
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India – Blossoming Digital
Economy
Govt. providing the Spark, Consumer fuelling digital Fire
Broadband for All (Rural) –
Rs. 3,200 bn
Digital
India
Universal Access
to Mobile
connectivity,
Rs.1,600 bn
Digital Inclusion –
170 mn direct jobs
Consumer Fuelled
Government Push
National Information
infrastructure – Rs. 1,568
bn
• Growth from 190 mn internet
users in 2014 to expected 500
mn in 2018.
• This growth is fuelled by more
older, more women, more rural
and more vernacular.
• Internet economy will move
from being 2.7% of GDP (2013)
to 4% of GDP – on par with
developed markets.
eKranti – Digital delivery of
services
Source:DeitY
Source:BCG
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Government Initiatives – Digital and Inclusive
JAN DHAN ACCOUNTS
(193 mn)
01
02
PAYMENTS & SMALL
FINANCE BANKS
(21 new Institions)
AADHAAR
(993 mn)
03
04
PAYMENTS
- IMPS (196 mn txns in 2015)
- UPI
Bharath Bill Payments
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The Digital Infrastructure in India is still evolving
Current Status
Technology Implication
No. Internet
connections
Now at 400m but 25% of users connect once a
month.
Future growth will be in rural areas as Quality, Cost and
ubiquity of connections improves
No. of mobile phones
Nearly 1
Mobile first strategy.
billion,
60% internet access is through mobile
Smartphone
penetration
15% & expected to increase to 25% by 2018
Need to support multiple channels with risk of increased
complexity and support costs.
How do people
connect ?
90% connect through 2G
Lite-applications which can work in online & offline mode
Pre vs Post-paid
95% pre-paid market
Users have limited data usage plan. Data/digital-led market
will take time
Payments
Rapid growth. 255m transactions using wallet,
$15+ b worth mobile payments
Digitized point of sale and payment banks will further
intensify competition.
English savvy users
Just ~12% of internet users (~50m). Most nonurban users prefer vernacular
Multi-lingual support is critical for penetrating the large
untapped rural mass across 3.5 lac villages
Source: Credit Suisse report Dec 2015
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Emerging Digital Banking System
2011
2015
CAGR
Reporting offices in Rural
34208
49181
9.50%
Total Reporting offices
76045
108532
9.30%
BCs
Year 2010
33042
Approx 500,000
72.20%
Mobile banking volume of txn
Year 2014 – 144 mn txn
- INR 666 bn value
Year 2015
308 mn txn
INR 2862 bn vlaue
113% Volume
330% value
Mobile Banking User Forecast
Source:McKinsey
Source: KPMG, FinancialExpress
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Indian Banks’ Response
Net Interest Margin
2.9
1.9
1.9
2.4
2.9
1.7
3.4
4.4
4.1
2.3
3.1
3.5
2.8
Net Profit / Revenue
18.2%
16.8% 17.8%
7.5% 7.2%
5.6%
2.1% 2.7%
14.8% 15.9% 14.7%
5.9% 5.0%
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Fintechs are not far behind…
P2P lending
New Payment banks on the radar
Personal Finance &
Invesments
Crowd Funding
wallets
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Digital Journey – Are Banks
Doing Enough?
Truly Digital – What it’s not
x
+
+
 Just adding new channels
+
 Adding delivery of banking services on new devices
 Enhancing same old banking business models with digital
technology
 Giving legacy processes a digital facelift
 Automating existing processes without reimagining
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Truly Digital banking paradigm
has four standout characteristics
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The customer is the focal point
 This is the world of the customer

Customer experience is just the beginning

Integrate banking seamlessly in the lives of consumer

Identical individuality to individual identity

Convenience, speed and personalization – Always
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Insight ahead of everything
 Capture, learn and leverage

Analytics is the key to the competitive edge

Data is everywhere – success belongs to those who use it well

Insights should be in the hands of all stakeholders

Mass personalization is real

Insights integrated with the process & apps
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Ubiquitous automation & leverage tech disruptors
 Seamless and unbound

Leverage tech disruptors such as Blockchain, Social, start-ups, sharing
economy to reduce friction and seamless automation

Automation reduces friction, improves seamlessness

Automation delivers consistent & superior customer experience

Ubiquitous automation allows for un paralleled value generation

Tomorrow's banks will be autonomous – run by self-learning virtual
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Ecosystem before bank
 A step towards the future

Unbundling of banking and fragmentation of services

The ecosystem is the new universal bank

The future lies in opening up your bank

Co-opetition will be the norm

Your APIs should rule the space or you could be ruled out
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Finacle helping banks to become #TrulyDigital
6/10
60%
16.5%
6 out of top 10 Indian
Banks are powered by
Finacle
60% Market share among
the top 40 banks
Finacle, is today touching
16.5% of the global banked
population
848 Million Customers globally on Finacle Platform
Over one billion customer accounts in more than 92 countries
Proven solution in India, rated as best platform globally
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Thank you very much…
Manipal Global Education Services Pvt. Ltd.