With a balance sheet bigger than many of its peers put together, State Bank of India has positioned itself as a banker to every Indian.
Now, India’s largest bank will leverage its technological strengths to woo the youth. Even as it attempts to acquire younger customers, the bank will not compromise on yields, managing director P Pradeep Kumar tells Shobhana Subramanian and Shayan Ghosh. Excerpts:
What more can SBI do in terms of upgrading technology?
We have started an initiative called in-touch branches where there is very little interaction with bank staff. Basically, it’s all about interactive machines and you can open your account, get a personalised debit card and an internet banking user ID and password. If you want to take a loan, you can use the video chat just by pressing a button. These branches have been opened at malls; it is more like a store and not like a branch and the idea is to give the customer a feeling that he is coming to a store to buy something in an almost automated manner.
I believe internet banking will also become somewhat like a store. We will tie up with other vendors and through our internet banking may be you can go to a Flipkart or an Amazon. We’re attempting this through an aggregator mechanism, where even if you do not have a card, you can use your internet banking credentials for the transaction.
Meanwhile, phone banking will effectively transform into mobile banking. We have an SBI Anywhere app — effectively an SBI branch on the mobile — for people who have smartphones. For those who do not have smartphones, we have a lower-end version — SBI Freedom.
Are there plans to ramp-up the sales force?
What we’ll do is digitally enable our sales force by giving them tabs. They can use the tabs to open accounts and even capture car and housing loan applications. We are trying to integrate whatever is captured through the tabs with our loan origination system and account opening system. Already, through SBI Caps and SBI Caps securities, we are creating a marketing team for the entire group. They will recruit people to sell SBI home loans or car loans or even insurance and mutual funds. We will be able to put lot of feet on the street after the recruitment through SBI Cap Securities and we have a large footprint, so we hope to push tab banking more aggressively than any of our competitors.
How are you going to position SBI?
We have to position the bank differently as our brand value must progress as a dynamic brand that younger people would aspire to. That is why we have to create an image that we are a very technology-savvy bank and that we are as good as any private bank. If you see our followers on Twitter and Facebook, you will see that we have more followers than our competitors. We are also using YouTube to do a lot of customer education. We have put a lot of videos on YouTube on frequently asked questions on operating internet banking and ATMs and other such usages. I think there are more than 30-40 videos on YouTube for youngsters — who do not wanted to read through a manual — to learn from.
What is SBI’s customer acquisition strategy?
It is a broad strategy but of course, it is easier to get a first-timer, generally a youngster. The customer acquisition strategy at present is targeted towards the youth through the use of technology.
Are young customers high-yielding?
They may not be initially, but over a period of time they will transform and I think that if you are able to serve them well they will have a loyalty towards the bank. Someone who opens an account in his early twenties will continue to bank with us his entire life. As he grows up, his savings will improve and the number of products he uses will also improve. Starting with opening a simple savings account, he can later be eligible to get a credit card, a car loan and a housing loan. It is essential that we capture customers at a very early stage.
What are your views on growing inorganically?
I do not think the bank needs to grow inorganically. We have more than 16.5% market share and have five subsidiaries that have another 5.5% and, therefore, we are large enough.
Given a choice between market share and yields, which one would SBI prefer?
We are very clear on that and to us the return on equity and return on assets are most important, not market share. Ultimately, for growth we need capital and unless we satisfy our equity-holders, where will I get capital?