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BOB Financial: Winning in tier-2 towns

Shailendra Singh, MD & CEO at BOB Financial, reveals the company approaches to products, partnerships, marketing, technology, expansion and more:

BOB Financial: Winning in tier-2 towns

Manoj Agrawal: Please share figures about card issuance, card usage, average transaction amount, average outstanding balance, NPA, etc.

Shailendra Singh: BOB Financial (wholly owned subsidiary of Bank of Baroda) has witnessed a significant increase in its credit card acquisition and spending figures for the current financial year. It has done a fresh acquisition of close to 1.1 million credit cards in the current financial year till now, which is twice the acquisition figure for last FY. Additionally, the monthly card spends have also increased by an impressive 260% year-on-year, reaching a total of about Rs17.5 billion.

The average ticket size (ATS) has increased by 18% over last year, which is also partial testimony of BOB Financial’s commitment to providing exceptional credit solutions to its customers, even in challenging economic times. Furthermore, the receivables growth has been more than 120% for the same period, while the non-performing assets (NPAs) have come down from 8.7% to 4.8% levels on a yoy basis. These figures highlight BOB Financial’s stability and growth trajectory.

We at BOB Financial are excited to continue delivering innovative credit solutions to our customers and are committed to maintaining this momentum in the years to come.

There are 22 credit cards shown on the company’s website, some of which are in partnership with other financial & non-financial organizations. Which kinds of organizations are most of these partnerships with? What kinds of companies do you expect to become partners in the future?

As a part of BOB Financial’s growth strategy, we are firm believers in the power of business partnerships. We have always recognized the importance of targeting new customers, especially those who are new to Bank of Baroda, and as such, we see great potential in partnering with well-known retail brands that have a substantial customer base. We are also open and keen to partner with fintechs with a robust business model and a deep understanding of the consumer finance business. A third but equally important category is institutions who bank with Bank of Baroda, where a cobranded credit card partnership can go a long way in cementing and growing the overall relationship. We strive to pursue partnerships in these 3 key segments, as we believe they offer significant potential for growth and value creation.

With such as wide variety of cards, how does the company do the marketing? Is it customized for each card? Are there some common marketing activities?

Yes, we have evolved over the years and along with adding a wide variety of cards, we have also upgraded our card application platform which together have helped us in reaching to different set of customers through a number of marketing initiatives. To start with, we have segmented our credit cards keeping our brand motto of ‘Credit for Everyone’ in mind. In this line, we curate and offer cards for every stratum of society. And, since each card is designed for a specific audience group, it is evident to follow a product-specific marketing promotion & acquisition strategy.

We keep a digital-first approach in our marketing strategy formulation as well and use all digital channels for organic as well as paid promotions. We are committed to building brand awareness and creating engaging conversations with our customers by leveraging media and marketing. Our brand’s message ‘Your Anytime Money for Everyday Happiness’ lies in the heart in everything we do, and we aim to reinforce this message through a range of diverse content buckets – offers, product and topical, to name a few, by keeping the customer engaged.

We understand the critical role that technology plays in transforming the customer experience. Given that, we are continuously deploying and integrating technology plug-ins to enhance and simplify every stage of the customer life cycle. Our goal is to enrich the customer experience, from onboarding to service to fulfilment, using state-of-the-art marketing technology.

On the channel front, we are building a robust channel ecosystem for BoB Credit Cards and reducing single channel dependence. As such, we are reducing our reliance on a single channel and expanding into alternate channels and pure digital channels for the open market. This approach allows us to reach customers where they are, using the channels that they prefer. We are strengthening our traditional channels, such as Banca, while also exploring new channels that can help us reach a wider audience.

What marketing approaches have been most successful for the company? What new marketing approaches are you thinking of trying out?

We have realized that we need to forge meaningful connections with the stakeholders to create brand differentiation and drive brand consideration. Hence, we prudently emphasise on presenting BOB Financial as their ‘Everyday Happiness’ partner. In today’s fast-paced and ever-changing market, it’s important for us to stay agile and adapt our marketing strategy to the latest trends and events. That’s why we will continue setting our marketing strategy around topical events. These events provide a unique opportunity for us to connect with customers who are already in the spending mindset and looking for seamless credit options to meet their festival needs. As we understand, Public Relations (PR) is one powerful tool that can help us not only build our market presence but also enhance our reputation.

Further, we believe that along with the right product, right positioning & communication, adopting latest technology has been & will be the key for sustainable success. Few key initiatives in this direction are: (i) latest Bobcard mobile app for on-the-move card management services, (ii) WhatsApp for business integration, (iii) Simplified 100% digital onboarding with CKYC integration & Digi-locker for VKYC (iv) latest digital marketing methods and marketing automation tools.

What are the customer segments by age, income, geography, gender, etc, where the company’s cards have achieved maximum reach?

Bank of Baroda Credit Cards cover a wide spectrum of user base, and we have products designed for each of these. The median age of credit card user is 30 years with an annual median income of Rs0.8 million per annum. We enjoy a peerless distribution capability covering all the states of the country, with our maximum users coming in from the tier 2 towns (~40%). Also, it is heartening to know that ~15% customers come from tier 5 & 6 towns which demonstrates that the cards and digital penetration in the country is become far more secular and is not just reserved to the precincts of the metropolitan cities. ~20% of our customers are women, and their SPC (spend per card) is pretty much comparable to that of men which is another positive metric.

Briefly describe the programs to enhance card usage and their impact.

We incorporate digital/social media strategies in all our marketing plans and count on joint marketing promotions with our offer partners to enhance card usage. Every day, customer gets an offer EDM delivered directly to their mailbox which has helped us not only in maintaining a regular engagement with our customers, but it has also rather proved to be a viable platform to communicate about any new offer, service, or company update. Apart, social media remains a focal point for drawing the attention of our prospective customers on various offers that we keep designing and wooing our existing customers to push usage and overall brand impact.

What is the reach of the company among the merchants? What are the expansion and diversification plans?

Bank of Baroda Credit Card is present among all the top merchants and E-comm platforms of the country. Also, we are expanding our reach to cater niche brands like Ritu Kumar, Masaba, Myntra Luxury and Tata Cliq premium segment. We are targeting high volume through our offers on bus ticketing, IRCTC, etc. As, we have a card for every segment, we are also offering and targeting hyper local & regional merchants to capture market for tier 2 & 3 cities. This would provide customers a diverse option to bring ease in their spending though our card.

Cards and payments are an extremely technology intensive segment. Who are the top 5 technology partners? Is the company partnering with fintechs? If yes, then in what areas?

Current and relevant technologies are a necessary ingredient for not only growth, but even for survival in the fast-evolving payment ecosystem. With credit cards, in addition to a strong origination system, we also require an equally efficient card management system, fraud risk management (FRM) system, analytics platforms and tools, CRM systems, campaign management systems, etc. We are utilizing services of some of the most well-known partners across these capabilities. In order to facilitate easier client origination, onboarding, and service, we are also collaborating with fintechs. Also, we are evaluating fintechs that provide ‘Credit Card As A Service’ (CCAAS) and other emerging areas relevant to the credit card industry.

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