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ICICI Bank: Technology accounts for 8.4% of operating expenses

ICICI Bank continues to invest in technology to enhance its offerings to customers and the scalability, flexibility & resilience of its technology architecture:

In December 2020, ICICI Bank had expanded its mobile banking app, iMobile, to iMobile Pay, which offers payment and banking services to customers of any bank. Sandeep Batra, Executive Director, updates: “There have been 5.3 million activations from non-ICICI Bank account holders as of end-December 2021. The value of transactions by non-ICICI Bank account holders increased by 73% sequentially in Q3-2022.” Batra was speaking at a recent media call.

Sandeep Bakhshi, Managing Director and CEO, explains: “Our digital platforms are continuously evolving with the objective of creating end-to-end seamless digital journeys, offering personalized solutions and value-added features to customers and enabling more effective data-driven cross-sell and up-sell. Our open architecture based mobile banking app, iMobile Pay, offers a wide variety of products, services and features and helps us to acquire new customers.” He was speaking at a recent analyst call.

Rakesh Jha, Group CFO, elaborates at the earnings conference on how digital is correlated with the profit: “Leveraging digital and technology across businesses is a key element of our strategy of growing the risk calibrated core operating profit. We have seen significant increase in the adoption of our mobile banking app, iMobile Pay.

Supply Chain Platforms

The business banking and SME franchise of the ICICI Bank continues to grow on the back of digital offerings and platforms like InstaBIZ. InstaBIZ offers various services such as instant overdraft facility, payment of Goods and Services Tax (GST), foreign exchange deal booking, business loans based on revenues reported in GST returns, automatic bank reconciliations and inward and outward remittances. Batra cites records: “The value of financial transactions on InstaBIZ grew by about 68% yoy in Q3-2022. Our supply chain platforms enable corporates to seamlessly manage their supply chain financing and payments, collection and reconciliation requirements of their dealers and vendors in a convenient and paperless manner. The value of transactions through these supply chain platforms in Q3-2022 was 3.5 times the value of transactions in Q3-2021.”

Bakhshi attributes: “The growth in our SME and business banking portfolios has been driven by our digital offerings and platforms like InstaBIZ and Merchant Stack. Our solutions for corporates comprising our various modular platforms, and our extensive client coverage have supported the growth in our average current account deposits. Process decongestion across products and customer segments is a key element of our strategy.”

The proportion of end-to-end digital sanctions and disbursements across various products of ICICI Bank has been increasing steadily. Rakesh points out: “About 33% of our mortgage sanctions and 43% of our personal loan disbursements, by volume, has been end-to-end digital in the first 9 months of FY2022. About 95% of the overdraft facilities set up for business banking current account customers has been end-to-end digital in the said duration.”

FASTag Growth

The bank is the market leader in electronic toll collections through FASTag. Batra adds: “The bank had a market share of 39% by value in electronic toll collections through FASTag in Q3,2022, with a 42% y/y growth in collections.”

Average CA Deposits Up

The bank had launched ICICI STACK for corporates. Batra informs: “Our bank has created more than 20 industry specific stacks, which provide bespoke and purpose-based digital solutions to corporate clients and their ecosystems. The volume of transactions through these solutions in Q3,2022 was 3.7 times the volume of transactions in Q3,2021. These solutions, along with the bank’s extensive client coverage, have supported the growth in average current account deposits.”

Trade Online Platform

ICICI Bank’s Trade Online platform allows customers to carry out most of their trade finance and foreign exchange related transactions digitally. Batra quantifies: “The value of transactions on this platform grew by about 90% y/y in Q3,2022.” The bank recently launched TradeEmerge for importers and exporters across India, offering banking as well as value-added services. This initiative makes cross border trade hassle-free, quick and convenient, as it offers an array of services in one place.

Technology Expenses

Rakesh explains: “We continue to invest in technology to enhance our offerings to customers as well as the scalability, flexibility and resilience of our technology architecture. The technology expenses were about 8.4% of our operating expenses in 9M of 2022.”

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