Name: Anup Kannan.

G

Case Title: Digital banking vs. Branch banking Why do customers buy from where
they buy?

Institution: Thiagarajar School of Management.

Objective:
Make a SWOT analysis between the Digital banking and Branch banking
Propose a road map for ING Vysya to move towards digital banking
Analyze the products of ING Vysya Bank ( CASA, FD, Loans etc.,) and their way
forward in digital banking model.
Research Methodology

Research Problem: This case aims to propose a road map for ING Vysya to move
towards digital banking.

Research Design: A survey was conducted by the aid of well-structured questionnaire
among the customers in Madurai region.

Sampling Design: In this research, random sampling is used for selecting survey
participants.

Sample Size: The sampling unit for the study is 100. The sampling size includes various
Bank Account Holders.

Data Analytic Techniques: For the analysis part of this research SPSS 20 were used. The
statistical procedures like ANOVA, Correlation and descriptive statistics were used.


Findings
Online sales of key banking products
showed double-digit growth year-over-year.

Nearly four out of five consumers (78%)
said they see themselves still using branches
as often.

66% of them still prefer to talk to person vs.
purchasing a banking product online.

60% of all banking products are still sold in
branches. 40% of products are being
purchased online.

Use of mobile banking has increased 50%
since last year; and nearly one-third of
consumers (32%) now do mobile banking at
least once a month.


3%
9%
66%
13%
4%
5%
Branch Banking User
Much More More
Same Less
Findings
Sales of mortgages via the internet
increased 75%, while sales at branches
fell 16%.

Online sales of auto loans nearly
doubled, while branch-sales dropped
nearly 10%.

Online sales also increased in checking,
savings, personal and home equity loans
and money market funds.

More than half (53%) of our survey
respondents have chosen a provider
other than their primary bank for credit
cards, 60% go elsewhere for home
mortgages.
21%
25%
24%
30%
Auto Loan Mortage Loan Personal Loan Home Loan
Products Purchased Online
Findings
68% use other providers for auto loans,
and 82% do so for brokerage accounts.

Banks are increasingly viewing branches
as a place where they can render services
beyond basic banking such as advising
people on their savings or selling them
investment products.

43% of the respondents recommended
bank to invest in online banking.

38% recommended to invest in branches.

21% of the respondents recommended
bank to invest in ATMs.

43%
38%
21%
20%
12%
7%
0% 10% 20% 30% 40% 50%
Online Banking
Branches
ATMs
Mobile Channel
Call Center
Social
Bank's Investment
SWOT ANALYSIS -Strength


Fees: Online banks are friendlier to smaller depositors because they typically require lower monthly
balances.


Interest rates: Online banks typically have better interest rates than traditional banks because they
don't need to take any funds to operate brick-and-mortar buildings.


Access: You can access your online bank account from any Internet-enabled device in the world.


Value: An online bank does not have the same overhead expenses so it gives those savings back to
customers in the form of higher yields on investments, lower account fees and lower minimum
deposits to open accounts.


Real Time Statements: Rather than waiting a month for a printed statement, online banking allows
you the opportunity to see a history of your transactions instantly and track your activity.

SWOT ANALYSIS - Weakness

Security: This is one issue that scares many people away from taking their
banking online.

Banks should invest heavily in fraud prevention measures in order to protect their
customers balances against stolen passwords or ATM cards.

Transactions: Depositing cash and live checks into your online bank account may
be more difficult.

Depending on the process your online bank has in place, it could take days, or
even weeks, to deposit cash or checks into your online bank account.


SWOT ANALYSIS Opportunities & Threats
Opportunities

Deposits: Web-based banks offer a few different options to deposit physical checks.
Online banks can also offer eDeposits" in which you can take a picture of the front and
back of each check and upload it to your account for deposit.

Threats

Misconceptions: Business owners often face greater risks from password-detecting
viruses than from flaws in bank websites.

Personal preference: Having a personal relationship with a banker can be a big benefit
for people, especially those who like getting new products or services pitched to them or
getting in-person financial advice.

Recommendations
The rise in digital banking has perhaps also contributed to the drop in the pace of
additions in branches in urban and metropolitan areas.

Banks metropolitan and urban branches were growing at 8.44% and 8.76%,
respectively, between 2008 and 2009, but this declined to 6.14% and 8.47%
between 2012 and 2013, the latest figures available on the Reserve Bank of
Indias (RBIs).

Conversely, the pace at which banks are adding rural and semi-urban branches
increased from 2.63% and 8.25%, respectively, between 2008 and 2009, to
12.02% and 11.10% between 2012 and 2013.

It difficult to get regulatory approval to open new branches, the increase in the
adoption of digital channels has helped increase customer reach.

Recommendations
Banking is all about getting cash when you need it, people look at the locations
of a bank's ATMs before they open an account. ING should have ATMs all over
in many major cities.

I propose a lighter, more diverse branch banking model to maintain sales, while
better enabling digital banking.

Bankers admit this increase in banking via digital channels is leading to a
transformation in the way branches operate, but add that branches still remain
core to their operations.

Banks cater to a heterogeneous demographic profile. Banks have traders, senior
citizens, salaried people and housewives all linked to a branch. Not all use digital
channels.

Branches will include more self-service devices and evolve into different models
suited to various customer segments