SBI makes foray into the era of digital banking, others to follow

Government also keen on digital stores as it will cut down on cost and time spent in bank branches

Written by George Mathew | Published:July 7, 2014 2:04 am

Take a round at State Bank of India’s latest digital store — that’s what it calls its digital branch — at South Extension Part I in New Delhi or Phoenix Market City, Kurla, in Mumbai, for a new banking experiment.

Digital banking is making an entry into India, The emergence of new technologies and expectations of tech-savvy customers is changing the way banking is conducted in the country. Indian banks are also proving that they are not behind their global counterparts.

Traditional banking involved several visits to your nearest bank branch and wasting hours, but that’s a thing of the past with India, where 50 per cent of population is yet to experience banking services, now flirting with digital banking.

Arundhati Bhattacharya, chairman, SBI, said, “We are delighted by the response we are already getting. SBI will continue to invest in digital stores to create a superior banking experience. We would like to invite all to come and experience sbiINTOUCH.” The bank has opened six such branches in India.

The SBI says digital stores will be bringing several unique and different offers to the new-age customers. These will include, for the first time in India, instant issuance of personalised debit cards created through an instant account opening kiosk, instant in-principle loan approval and an interactive dream wall to aid customers in conceptualising their journey towards realising their financial dreams.

The digital store proposition, technology and devices used as well as training of employees were achieved in just 14 weeks in partnership with Accenture. “By putting digital at the heart of their business strategy, India’s largest bank will be at the forefront of the global digital revolution that is transforming banking,” said Piyush Singh, Managing Director and head of Accenture’s Financial Services group.

“This (digital store) is making banking relevant for generation next, meeting their aspirations and connecting with customers. These branches have smart ATMs with cash-in and cash-out facilities and integrated remote teller, remote express. You can open an account instantly using e-KYC,” Singh said.

The digital stores go beyond the financial matters and help the customers in identifying his other needs — from education, buying home, car to other personal needs. The “remote express” — which is manned from another location — interacts with the customers through a computer network.

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With SBI kicking off digital banking, others can’t be far behind. Other public sector banks that are watching the SBI’s initiative are also firming up plans to get into digital banking.

“We have to see what kind of benefit it is providing. It is always a trend in banking to do something that will benefit the customers. Any investment for business is not a problem,” said Punjab National Bank chairman KR Kamath.

The government is also keen that banks get into the digital era as it will cut down on cost and time spent in bank branches. Finance minister Arun Jaitley, who launched the SBI initiative in Delhi last week, expressed hope that other banks would follow suit by opening digital branches.

SBI has also promised to expand the digital banking network across the country. “We are benchmarking against the best in the world and will use these stores as innovation hubs to experiment with new ways of delighting our customers and enabling more seamless customer journeys. We will continue to build on our digital offerings scaling it across geographies, processes and capabilities,” said SK Mishra, deputy MD, New Business and Corporate Strategy, SBI.

According to a PWC report, while the preference for digital can be seen across all segments and markets, it is especially important for those customers who form part of Generation Y, now at the point of choosing their main banking provider. Consequently, banks need to target and acquire these customers now to lock in the future value that will be generated by this segment.

“Our research suggests that the extent to which a bank exploits the new digital feature set will play a very important part in this customer group’s decision-making process, much more so than traditionally important criteria such as branch location, or even brand,” PWC said.

Digital stores are an extension of proliferation and sophistication of smartphones and tablets that allow banks to offer many more services online.

The SBI experiment in digital banking is only a small beginning. The day may not be far off when the entire bank network in India becomes digital.

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