Sony A, General Manager & CIO, South Indian Bank, explains the 4 pillars of the bank’s digital strategy, describes several recent digital initiatives and reveals future digital plans for overall growth of the bank.
What are the changes made in the digital strategy for customers of your company for the current FY?
Sony A: Digital strategy of South Indian Bank is instituted on 4 pillars viz. INPF ie, Indulge (customer self-service), Nudge (assistance to be nudged to go digital), Purge (remove redundant processes using automation) and Forge (impactful fintech partnerships). Enhancing self-service capability across channels, empowering branches with technology solutions to nudge the customers to go digital, automating manual processes at branches & back offices to improve customer TAT using AI & RPA and tie up with fintechs is the integral part of bank’s overall digital strategy.
The bank’s increased focus on digital banking led to the formation of the digital division, which focuses solely on innovating, improving and implementing digital products that align with the bank’s business strategy, across our channels – ATM/cards, internet banking, mobile banking, with a special focus on emerging technologies.
Leveraging digital technologies to enhance the customer’s banking experience is the key objective. Consistently ranked in top 10 Digital Transaction Achievement lists by MeitY (Ministry of Electronics & Information Technology), the bank’s digital banking initiatives are all aimed at offering a better customer and staff experience, by increasing customer base, improving other income, reducing operation cost and preparing the business for the future.
How has SIB benefited from implementing digital strategy in the last 2 years?
The share of digital transaction of the bank has grown up to 94% in FY2021-22. This increase in digital transactions resulted in increase in income through digital endeavours which is visible in first half of the year. We also expect a considerable increase in digital transactions as a result of ecosystem factors, combined with our own efforts.
Please describe underlying technologies at your bank. What is the usage patterns of apps and digital platforms. How many of your customers are using mobile banking?
We continue to leverage the existing legacy technology platforms for digital growth in parallel with our strategy of modernization of our technology stack including but not limited to cloud adoption, block chain, AI-ML and RPA. We also have formidable partnerships with fintechs to offer cutting edge new digital products. We have seen an increasing trend in mobile banking adoption among customers and have already witnessed in excess of 30% y/y increase in our mobile banking customer base. With current focus in digital initiatives, we see a tremendous opportunity in harnessing more customers to our digital landscape.
How much online business is garnered by SIB in the current FY? Which 3 states give you the maximum business?
South Indian Bank, through a fintech tie up has ventured into credit card business which has a 100% digital onboarding journey. We have acquired nearly one lakh customers this financial year for credit cards up to Q2, of which 80% customers are new to bank. As part of banks digital sales strategy, dedicated channels are created for merchant acquiring, corporate and retail digital onboarding which is expected to further accelerate the digital penetration. Centralized campaigns together with regional drives have also given good results. The mobile banking activation has increased to 78% in NTB eligible accounts. Our major customer base is mainly from 3 South Indian states – Kerala, Tamil Nadu and Karnataka.
Who are the main technology vendors of the bank? Tell us about data center, networking hardware, size of your IT team and training?
The bank’s core banking and internet banking platforms are powered by Infosys. Mindgate is our strategic partner in digital growth especially in UPI, IMPS, FasTag, etc. Oracle is our major partner in almost all products. We have a very strong relationship with NPCI, through which also new projects are executed proactively. We also have multiple other partners catering various digital products ranging from start-ups to MNCs.
We have around 240 member IT team and organization has a dedicated training department/facility. Upskilling the staff has been a prime area of our digital focus where we have rolled out a whole self-learning program. We have also partnered with Coursera for providing access to the vast collection training material for our staff.
How have you gained by deploying analytics to increase business?
For bank with a legacy of over 93 years with a pan India footprint of 926+ branches, understanding the customer is always a big challenge. Deployment of analytical tools has given us the advantage of understanding our customer base of 7.5 million to its core. So far, analytics has played a critical role in understating customers’ behavior, preferences and positioning, and to become relevant to their needs real time. Also, analytics has helped us to understand the likelihood of churning which helps us to take action in advance and do the needful to convert them to an active client. The results of such efforts have led to arrest the churn by >10% in the last 12 months, which has been immensely gratifying.
The bank has embraced its data driven decision making journey like never before. We are using machine learning algorithms and AI to drive our business. We have rolled out pre-approved retail asset products backed by ML algorithms. For streamlining credit underwriting process, we have adopted advanced analytics techniques. These methods have significantly helped us improve customer experience, reduce processing time and improve asset quality. A CASA customer retention model, which will help sales team to engage with the customers and provide better services, is in pipeline.
Also, we are in the process of coming up with more robust techniques for cross/up sell by employing advanced analytics techniques and tying up with experienced analytics consultants in BFSI market. These strategies have helped us improve our retail business considerably. To formulate effective collection strategies, an ML model based on risk segmentation of customers is underway. We intent to exploit the power of AI and ML to further strengthen our business and processes in future.
How is technology put to use for CRM?
We have a dedicated data science team which analysis customer behavior from the very first day. We nurture a customer’s journey through various communications basis our propensity modelling and this has helped us to design, upsell and cross-sell campaigns that are relevant to our customers and thus improving the conversion rates.
A good CRM tool not only helps to have a 360-degree view of our customer data but also helps to understand our customers’ persona and their different stages in a customer lifecycle. To take full advantage of CRM, one should complement it with an effective marketing automation tool. Integration will not just help in better data management but also to enhance customer experience. CRM has been effectively used for customer compliant redressal, lead management and showcasing 360-degree view of a customer.
We have deployed CRMNext solution as part of it. It will further boost business efficiency by providing better understanding of the existing customer relationships, allowing greater control on customer feedback i.e complaints, queries etc raised through any channels or social media platforms. Lead management will help to meet aggressive targets, identify fresh business and to narrow down future prospects.
As part of 360-degree view, all actionable aspects related to the customer such as information on his current portfolio, related information such as products and services held, wallet share, demographic information, activity history, case history will be visible at relationship management/ branch user end to improve banking experience of the customer.
What are you doing to enhance CX?
In this digital era, providing a smooth, seamless customer experience is our utmost priority. We ensure that customer’s first interaction with us is end-to-end digital, seamless and have a quick turn-around-time of not more than 15 minutes. We ensure our customers receive the communications at their preferred mediums and at the most suitable time, to trigger an action which will be based on their behaviour analysis as mapped earlier.
A well-researched customer segmentation has helped us to avoid irrelevant communication to our clients, streamline our communications and evoke better engagement. By following a phygital approach, we offer a combination of physical and digital experience to our customers.
How strong is the ban’s presence on social media? What have been the online marketing & promotional efforts undertaken lately and planned for the coming year?
Social media is the platform where we can directly reach out to the upcoming customer segments – Millennial and Gen Z. As a brand, our efforts are focussed on staying upbeat with trending topics and widen our brand presence across social media channels through engagement activities. In addition to product centric campaigns, in 2023 we will be focusing aggressively on our brand campaign, through which, we want to highlight the trust that we bring with 94 years of our legacy and highlight our technological supremacy with the array of digital products. We will be exploring new digital mediums as a part of our brand campaign, be more visible nationally as well as regionally through influencer campaigns and plan segmented campaigns in music streaming apps.
What are your targets and plans for IT, digital initiatives, for the current FY to increase business and productivity as well as to expand customer base?
We have recently launched foreign outward remittance through our channels to cater the ongoing trends in education, medical and travel. We have also launched trade finance platform for our corporate customers which is constantly being enriched. We are also in the process of upgrading our loan origination system to tailor the demands from various segments to simplify the credit business flow. We are heavily focusing on automating our internal business and operational processes to improvise the productivity. Various cloud-based SaaS services are in use like Vayana, OneCard-Credit Card, Legality, etc. South Indian Bank is moving towards initial phase of public cloud adoption based on the approved cloud adoption strategy of the bank.
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