State Bank of India is investing highly in technology not just to simplify banking but to pursue its ambition of become a global behemoth:
A leading private sector bank launched online banking in India 19 years ago. Soon after, more private and foreign banks followed. But, where were the public sector banks? In 1998, no one imagined that a public sector bank could be tech-savvy. Mired with bureaucracy, tight government controls, slow decision making and legacy infrastructure, these banks were laggards at technology adoption even though India was on the cusp of a technology revolution, with internet services and mobile telephony getting introduced. Then came ATMs and the convenience of withdrawing cash from anywhere. Credit/debit cards came to be launched around that time but the initial uptake for these channels was slow. There were demographic changes happening too – the country’s population was getting younger.
Bankers then knew that their new customers and new business opportunities would come from the youth segment. Embracing technology was not an option, it was an imperative. So, a few years later, public sector banks started launching online banking and ATM services. With their extensive network of branches, their focus turned to the semi-urban and rural customers. In fact, the second wave of technology adoption by banks is really aimed at the unbanked population – the segment that is at the bottom of the pyramid.
State Bank of India is one of the early adopters of technology. Today, it has a firm foothold in the digital space, with its internet banking, mobile banking apps, ATM machines, social media banking, eCommerce apps, and a network of swanky digital experience centers called sbiINTOUCH. It is not far off from launching a completely digital bank with next generation payment gateways. With a massive digital transformation plan and infrastructure upgrades, SBI plans to scale up transaction volumes by a factor of 100x, reduce cost-income ratio, and grow its digital payments and card transaction businesses. It also aspires to grow its customer base through the introduction of credit risk score engines, feature phone banking and Aadhar-enabled apps. Could all this make it one of the top 10 global banks that it wants to be?
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