SBI Goes Digital; Other Banks To Follow Suit

by CXOtoday News Desk    Jul 02, 2014


The State Bank of India (SBI) has recently launched six digital branches across the country as part of its program to offer next generation banking solutions to the growing mobile phone and internet savvy customer base. The bank is also adding up to 5,000 ATMs in FY15, it said in a statement.

Digital banking… the way to go

The digital branches, named sbiINTOUCH, will facilitate services such as instant account opening with personalized debit cards, instant loan approval for car and home, remote expert advisors available via video links, along with interactive walls and table displays, said SBI statement.

Currently located in Delhi, Mumbai, Bangalore, Chennai and Ahmadabad, sbiINTOUCH branches are primarily targeted at servicing the youth in the country. “India is in the midst of a major demographic transition and we recognize that our customers increasingly expect digital services to help them manage their financial needs,” State Bank of India Chairperson Arundhati Bhattacharya said adding that these branches are a first step in the journey to offering full digital services across the nation,” she added.

The bank has engaged Accenture to develop the digital business strategy for its programme. “Accenture helped SBI in designing the branch layouts, implementing the digital processes and technology at the branch, and providing back-end integration including employee training,” said Piyush Singh, MD and head of Financial Services, Accenture.

Finance Minister Arun Jaitley present at the inauguration of the Delhi branch stated that with the innovative technology and user-friendly features at the digital stores, SBI has led the way in digital innovation in the Indian banking industry. He added that he is hopeful that other banks would follow suit by opening such branches.

Customer expectations are changing very fast. Banks will have to gear up to meet the expectations of Generation Y because they’re going to constitute more than half of the banked population. What we define as banking is starting to change,” renowned banking guru Brett King has also told CXOtoday at a recent event.

There has been a 60% decline in the number of customers visiting bank branches per year. Around 68% of new account/mortgage products are chosen online. “Digital interactions with financial institutions will outnumber face-to-face by 300-to-1. Whether banks are ready or not, these new age customers are going to drive them towards a major transformation in their approach to banking, said King.

The ATM focus

By adding up to 5,000 ATMs in the next one year, SBI would help improve the ratio of debit cards to ATMs in the country, A Krishna Kumar, deputy managing director, SBI tolh Business Line. He explained that if we take the debit card population, for every ATM , SBI has about 2,500 cards. Other banks have a ratio of 1,500-1,700 per machine. Due to this, there are long queues at SBI ATMs, and customers go to other banks’ ATMs located nearby to save time, and SBI gets charged for those transactions.

Currently, customers are allowed five free transactions a month at other bank ATMs, but at the backend, the bank pays for every transaction a customer has made at another bank’s ATM.