Adil Gandhi, MD, Prime Coop Bank, spoke on the topic of Digital Transformation at the FCBA 2024 conference at Lucknow:
In our sector, technology adoption is a big concern due to 2-3 angles. Cost is the primary challenge for most of the cooperative banks. Second challenge is we don’t have the skilled to use technology effectively. We should train our people to use the optimal technology for the betterment of the customer and the bank as well. We necessarily need to be very cautious and vigilant about the security of the technology.
Most of the cooperative banks are semi-automation mode. We are not fully functioning as an automated bank, like private sector banks are. Our bank has 41 branches in Gujarat. It used to take a loan application 3 days to reach me. After that, it would take another 2-4 days to process it at our head office. Then it takes time for sanction and disbursement. So, on an average, turnaround time of each loan, if it is unsecured, was 12-13 days, and for secured, it was as high as 21 days. So, then we start to think about adopting something makes our life more easy – a fully functioned software. So, we adopted a loan management software, and are the first bank in Gujarat to do so. Naturally it comes with a cost, but the benefit which we get it, we could manage the unsecured loan turnaround time from 12-13 days to now 4 days.
Further, there is no physical courier and physical documentation of the process. Entire process is getting taken care at the branches itself. There are so many things which we may not be checking when we process it manually, such as CIBIL score. Our software has very robust APIs. Our decisions look at major 5 angles – repayment mode, CIBIL score, margins, risk rating and internal rating. We color code all these as green, orange and red. Now the flow is very seamless. What we are losing without technology was 15 days of interest and we are gaining very aggressively on that front. Yes, adoption naturally was a challenge for first year, but now the flow has become very fast and it is working absolutely well.
There is one more factor, which needs to be taken care of very well. In the private sector banks, each and every individual is doing cross-selling to the bank’s customer. We can use our extra staff converted into a sales force and a service force, that can start cross-selling with the customers.
One final part which is missing in most of the cooperative banks, is CRM. If you open a savings account, we will get, maybe Rs1000 or Rs2500 or maybe Rs5000. And that’s the only thing, which we are doing as of now. The CRM, which is a very enhanced tool, will give us a picture about the capability of the customer. Then, we can analyze that customer and explore lots of cross-selling opportunities.
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