This documents highlights the importance of Digital banking for PSU banks in India. In this digitally enhanced age, it is of utmost importance for PSU banks to be up to date with the latest technology.

1. PROJECT PROPOSAL
IMPROVING ADOPTION OF DIGITAL BANKING PLATFORM
SUBMITTED TO
Mr. XYZ
Chairman & MD, ABC Bank
ADDRESS
ABC Bank, 201, Raheja Center, Nariman Point, Mumbai – 400 021
DATE
29st
August 2016

2. 2
EXECUTIVE SUMMARY
 ABC Ltd is a Public Sector Bank (PSB) operating in India.
 It has presence in all three: Rural, Semi-Urban as well as Urban regions.
 The bank currently has 1773 branches in India along with an online banking website
and a basic mobile application. The mobile application includes viewing transaction
history, retrieving bank balance, and funds transfer. The website offers more
functionalities like paying electricity bills and utility bills.
 ABC Ltd has understood the importance of moving towards the digital platform in
order to improve its efficiencyin serving its customers, forge deeper relationships with
them, understand them better and simultaneously reduce costs in the long run.
 The project proposal focuses on the future of internet and digital banking in India and
the steps that ABC Ltd should take to enhance its digital services for all its customers
in order to increase adoption of its digital banking platform.

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1.) Segment: Rural Areas
Status Quo: According to the Telecom Ministry, 9.31% (55,669) of India’s villages do not have
any mobile telephone service. Around 38% of the rural population uses mobile phones which
is 320 million out of 881 million. Out of this 35 million are smartphone users. And yet the
penetration of digital banking platform is poor.
Future Predictions: According to a study by the Boston Consulting Group (BCG) titled ‘The
Rising Connected Consumer in Rural India’, by 2020, the number of web users in India will see
a two-fold rise at 730 million against 350 million at the end of 2015. About 315 million Indians
living in rural areas will be connected to the Internet, compared to around 120 million at
present. That’s about 36% of the country’s total online population. The report said that 75
per cent of new Internet users in India will come from rural areas. An overwhelming majority
(75 per cent) of new users will consume data in local language.
Business Goal: Increasing awareness via Mobile Messaging and promotion of financial
inclusion
Phase-wise Strategy Implementation:
 Phase 1-
Identify the areas within a predetermined radius of the PSU bank branch and divide
the areas into “Knowledge Circles”. There will be one Knowledge Transfer Executive
(KTE) for every knowledge circle, who willbe responsible for creating awareness about
the benefits of digital banking. They will emphasize on the security and safety aspect
of moving digital thereby gaining the trust of the people.
 Phase 2-
The KTE’s are trained about the most beneficial financial products and their value
addition to the villagers. There will be two Knowledge Transfer session every week for
the residents of that particular knowledge circle, wherein the KTE’s will impart
knowledge (in the local tongue) about the necessity to become digital. This will be
carried out for the first 6 months.
 Phase 3-
SMS messages will be sent to their mobile phones twice every week (in the local
language), re-emphasizing the benefits of digital banking and familiarizing the target
audience with the various banking terminologies.
Evaluation Plan: As and when the number of people accessing digital banking facilities
increases, the knowledge transfer sessions and SMS’s will be upgraded and modified
accordingly, to ensure the continual usage of the financial products by the customers. After
implementing the plan for the first quarter, various parameters will be evaluated such as
percentage increase in customers for SMS banking, increase in number of transactions on the
mobile platform and feedback about the KT sessions. Based on this data, modifications will
be done to the next quarterly plan.

4. 4
2.) Segment: Semi-Urban Areas
Status Quo: Just as in rural India, the knowledge and availability of internet is still a one of
the biggest challenges that prevails in semi-urban areas. According to the report of IAMAI
around 22% of internet users do not have knowledge about transferring money online. This
particular class of people are not using online banking services either due to lack of
awareness or lack of Internet infrastructure. Trust and security are the main factors
responsible for reluctance among the users and that is the main reason they still want to
stick to traditional branches and in spite of having an account with PSU’s they don’t bother
to use internet banking services.
Business Goal: Increasing the awareness of online banking/mobile banking facilities and
pushing for faster adoption
Phase-wise Strategy Implementation:
A. Personal visit by Bank employee:
ICICI bank had launched this service in 2014 wherein an employee from the bank
would come home and open an account for the customer. The same strategy can be
used for creating awareness about online banking and mobile banking services of the
bank. This is not only help in eliminating the inhibitions in the minds of the people
regarding digital banking
B. Introduction of Offline App Services:
Once people are aware of the digital banking platforms available at their disposal, the
next major challenge would be to address those sections of the society who are still
using feature phones and do not have internet connectivity. Banks such as Kotak
Mahindra Bank and DCB Bank have introduced mobile banking apps that can be used
both online and offline. Customers have to download the app or take it via Bluetooth
from another device that has internet. But, after installationthe app works completely
offline. Users can transfer money, recharge their mobile or DTH, link Aadhaar number
to the bank account, locate nearby ATMs and branches, buy insurance coverage,
enquire about their account balance, generate a mini statement, request a cheque
book and e-mail statement. This will help in meeting the aspirations of the semi-urban
population to move one step ahead in life.
Evaluation Plan: The success can be evaluated basis number of people who enrol in Online
banking or mobile banking platforms. Another criteria should be to seethe frequency of usage
of these platforms. Steps must be taken to increase the frequency of use in the future as this
will not only help the bank in instilling confidence and trust in people about the digital
medium but will also help in cross-selling and increasing the stickiness factor.

5. 5
3.) Segment: Urban Customers
Status Quo:
Two types of Customers:
1.) The customers are ‘Aware’, ‘Tech-Savvy’ but still not on-boarding the digital banking
platform.
2.) The customers have Digital Banking ID/Password but still aren’t using it, or they are using
it less frequently.
Background:
The number of web users in India will be 730 Million by 2020 as against 350 Million according
to the report ‘The future of Internet in India’ by Nasscom.
According to Mr. Arun Tiwari, Chairman & MD of Union Bank of India, a transaction at a ‘brick
and mortar’ bank branch costs anywhere between Rs.55-Rs.60, if we shift the transaction to
internet then it costs about Rs.15-Rs.17 and on mobile the cost is reduced to only Rs.2-Rs.3.
Looking at this figures it’s fitting that the PSU Banks, which are bleeding money on NPAs,
make moves towards greater adoption of Digital Banking.
Business Strategy:
A. Aggressively partnering with e-commerce sites, payment gateways & wallet
payment apps:
The bank should partner with all major and upcoming e-commerce sites (Flipkart,
Snapdeal, Amazon, etc.), wallet payment apps (PayTM, Mobikwik, Freecharge, etc),
and payment gateways like (CCAvenue, Verisign, etc.) and offer attractive Discounts
& Cashbacks for ‘Net-Banking, Debit Cards, Credit Cards’ transactions.
B. Launching its own ‘Mobile Wallet App’:
The bank should launch its own Mobile Wallet App, because customers already trust
the bank and hence the acceptance of app will be higher. If the UI is good and utility
of app is high, then the app will have high usage.
C. Easy and Intuitive UI of website and mobile apps:
User Interface and User Experience plays a very important role when it comes to
customer’s usage frequency of Digital Banking Platforms. The UI and UX must be
Simple, Intuitive and bug-free.
D. Unmanned (Digital) Branches:
Physicalbranches with machines set up to help with automated transactions based on
commands (input) by customers, will help in reducing the wait-time and service the
customers in a better way. It will alsohelp customers understand the benefits of going
digital by actually being a part of it.

6. 6
E. Using Social Media to facilitate Banking Transactions:
The bank can utilize the social media to its advantage. ‘Hashtags’ can be used to help
users initiate simple transactions like retrieving account balance, transaction history,
etc. Social Media can also be used to target right customers in a better way and cross-
sell profitable products to existing customers.
e.g., Lodging complaints via Facebook, using hashtags on twitter to receive account
balance information on your cell phone via SMS, finding the right segment / customer
profile, etc.

7. 7
F. Promotional SMS & Emails to Nudge customer towards Digital Banking:
Send weekly SMSes to Existing Customers to download Mobile App and offer some
incentive for doing so. E.g., Offer 10% cashback on first transaction up to Rs.300.
G. Referral Scheme to get your family/friends on the platform:
Referral schemes help increase Word of Mouth. If incentives like cashback, discounts,
reward points (money), etc. are offered for referring mobile apps, or getting their
friends/family members on digital platforms, than ‘students’ will be more likely to
promote it and hence start using it.
SUBMITTED BY:
Rohan Bharaj
Arjun Parekh
Miral Shah
Krithika Aravindan
Abhishek Bhowmik
Akshatha Neeraje
Naren Shetty