Karnataka Bank has set up ‘Digital Centre of Excellence’ in its quest for focus on improvement in technology, digitization and building values:
Karnataka Bank has deployed the most modern IT tools to deliver products and services for customers’ benefit with an aim to develop effective long-term relationship with them. Mahabaleshwara M S, MD & CEO, lists the several digital initiatives in this regard:
Mehul Dani: What are the various tie-ups Karnataka Bank has entered into and the perspectives of such partnering? What are the steps taken towards digitization through such tie-ups?
Mahabaleshwara M S: We had embarked on a strategic transformation journey, namely ‘KBL Vikaas’ in 2017, complete with a vision, milestones, roadmap revolving around digitization and customer centricity. In the last 2 years, we have tied up with fintech companies for digital banking products, like Fin Wizard Technologies (FISDOM) for mutual funds platform, with IIFL Securities for demat and trading facilities for our bank customers and Corpository for sourcing corporate leads and business.
We have also tied up with companies like Karza Service, Perfios, Jocato, NSDL, Experian, Hunter, etc. to strengthen, automate and digitize the journeys, which include processes like onboarding of customers, recovery automation, data analytics and risk assessment, lending automation, etc.
In all tie-ups, customer is in the center as we all are moving towards ‘paperless, cashless, faceless’ Digital India economy. I am of the view that tie-ups with service platforms facilitates delivery, ease of access of the bank’s products to customers, whereas sales platforms are for customer onboarding, engagements, sales and retentions.
Our KBL Mobile Plus App is well loaded with features that varies from payment of utility bills, credit card payments, UPI, scan & pay, mutual funds, insurance solutions and our aim is to bring complete banking at the fingertips of our customers.
We are witnessing digital adoption and customer delight through customer engagements. We will continue to focus end-to-end digital solutions for almost all banking activities so as to take customer engagement to a new high.
One more very strategic initiative and a milestone for us has been establishing non-financial, fully owned subsidiary of the bank, KBL Services, which is a big step for us in realigning business strategies with the objectives of improving efficiency, results and valuation in the long run for the bank.
What new initiatives has the bank undertaken in the last 2 years to augment business, like for example, lead generation, business sourcing, cross-selling and profitability? How do you view cross-selling of third-party products?
Banks are increasingly becoming intermediary marketplaces in the digital era, and each prospective event in the customer journey presents a new opportunity. We already have our own infrastructure, resources and networking, para-banking tie-ups and activities, including bancassurance, depository service, insurance, MFs, credit cards, etc, that have helped increase the reach of the bank and bring a vast customer segment into the fold of varied financial services.
Our branches are supported by our lead management system (LMS) and analytical leads from the system facilitate identifying, engagement with prospective customers and help us offer additional banking services. This actually helps to build value to our relationships.
In retail asset segment, we have tied up with various builders for pre-approved housing projects that not only help customers in their decision making for house purchase, but reduces the loan processing turnaround time in the bank.
Similarly in motor insurance segment, we have entered into corporate arrangements with Tata Motors and Maruti Suzuki, wherein interested car buyers can avail finance from the bank through our ‘Xpress Digital Car Loan’ process. Our branches and loan processing units now have a strong retail marketing and sales force that facilitates end to end journey for customers.
Cross selling of products is undertaken as per RBI’s master directions on para banking or financial services as issued from time to time. It is in the nature of corporate agency, distribution, referral tie-ups etc. In the para banking segment, we have been offering various third-party products, which provide one stop financial solutions to the needy customers.
In life insurance we function as a corporate agency of PNB MetLife India Insurance, LIC of India and Bharti Axa Life Insurance. For general insurance products we have tied up with Universal Sompo General Insurance and Bajaj Allianz General Insurance.
Our other arrangements with BFSIs include tie-ups with Way 2 Wealth Brokers and IIFL Securities for equity trading and co-branded credit card facility for our customers through SBI Card. We have partnered with FISDOM, an online platform for sale and management of mutual funds, which digitally enables our customers to invest and track mutual fund investments on KBL Mobile Plus App at their convenience.
The collaboration for third party products helps to improve revenue in the non-core income segment and there also exists a positive correlation to ROA in the longer run. In collaboration lies success
How has the process of onboarding of customers changed in the last 2 years in terms of ease for customers?
We have set up an inhouse ‘Digital Centre of Excellence (DCOE)’, in our quest for reimagining customer journey and continuous focus on improvement in technology, digitization and building values. For example, digital loan underwriting products such as KBL Xpress Car Loan, Express Home Loans, Xpress Ghar Nivesh, Xpress Home Top Up, Xpress Easy Ride, Xpress Cash Loan, Xpress MSME etc, have been successfully launched and implemented by our bank in the last 1 year.
We have tied up with appropriate fintech players for these purposes. The application helps us to speed up account opening and approval of loan application by real-time data extraction and ID verification. These new age applications automate many manual tasks to increase accuracy and hence, efficiency with automatic data entry. It is noteworthy that we have already achieved the retail digital loan process adoption and 75% of the total/ number of retail loans have been sanctioned in such a way as on date.
Another tech product is ‘Tab Banking’, which is flexible and reliable and empowers our field agents to initiate the on-boarding process on-the-fly. They can capture customer information on their tablet devices and initiate the e-KYC process to validate it and then upload this information to the core banking system in real-time. Using this solution, we can ensure the agile processing of savings bank applications and opening of accounts.
These customized banking applications have enabled us to provide better customer experience by delivering flexibility and convenience of the essential banking operations right at the customer’s doorstep.
What steps have you taken in popularising and marketing of digital products and what is the visible impact?
Creating a robust digital platform and integrating all customer touch points across all channels is what we have ambitiously set into. We believe API integration is critical to business and so also our collaboration with newer and non-traditional players are to open up their APIs in order to remain competitive and witness growth. We are continuously engaged with the customers through social media marketing, mobile marketing, email marketing etc. to stay connected, build relationships, value and brand.
We also have contact center tie- up for providing tele marketing services and also popularising our digi-products and solutions. At the branch level, digital adoption campaigns are held to popularise and hand hold the customers for digital adoption.
As a part of indirect endorsement of the bank, you will find our bank’s products promoted in various blogging sites, bookmarking sites and classified sites such as Quora, Tumblr, etc. Customer experience, reviews and recommendations are found here, which affirms our customer centricity.
Also, the covid pandemic has accelerated digital adoptions and we have witnessed this as our alternate delivery channel penetration crossed 90% this year. Such channel transactions have also increased 3.5-fold and today 90% of overall banking transactions are taking place through alternate delivery channels. We may say, that branch banking has shifted to mobile banking. This is enabling us, as there is a rationale to downsize 25-40% area in the branches, to reduce expenses on rentals, maintenance and other recurring costs.
We feel, we are on a right path to strengthen our technology and digital culture at all levels including business, managing of risk, compliance and governance, and is ambitiously poised to become the digital bank of future.