MUMBAI : State Bank of India (SBI) is planning to revamp its current and savings accounts (CASA), salary accounts and transaction banking businesses as it joins the scramble for deposits at a time credit growth is taking off.
According to a document inviting bids, India’s largest bank is looking to hire an external consultant to design a new strategy for these businesses. The consultant will work with SBI’s various internal business units and circle teams to develop redesigned processes. SBI wants to complete the exercise within 12 months of hiring the consultant, extendable by a year if required.
“If you see the market right now, there is a lot more competition for the same pool of deposits. The bank just wants to ensure that its products are better than other lenders,” a person aware of the development said on condition of anonymity.
The revamp comes at a time banks are seeing a slower influx of deposits while credit demand is steadily rising. In fact, several lenders have announced limited period offers on deposits to lure customers ahead of the festive season.
Banks traditionally prefer low-cost CASA deposits. While current account offers no interest on deposits, savings accounts offer less than 4%, way below 6% and above offered by many banks on term deposits.
SBI’s CASA deposits grew 6.5% year-on-year (y-o-y) to ₹17.7 trillion as of 30 June, while term deposits grew at a faster pace of 9.3% to ₹21.3 trillion in the same period.
“We have also now communicated to the ground that CASA has to be a priority, and that is why (we are) encouraging contact with the premium customers or high-value customers so that they can deposit more and transact more in our accounts,” Alok Kumar Choudhary, managing director (retail business and operations), SBI, told analysts on 6 August.
Choudhary said it is a two-pronged strategy; the first is to acquire new, valuable customers so that the bank can open fresh accounts, and the second is to enhance its relationship with existing customers.
According to the SBI document cited above, not only are customers increasingly preferring digital channels for transactions and account opening, but digitization also increases operational efficiency.
SBI wants the consultant to study and assess current technology solutions of the bank, redesign the end-to-end digitized onboarding journey and redesign different digital solutions.
Besides, the bank also wants the external consultant to identify different fintech players to provide the necessary technology and data support for all digital developments.
SBI wants to forge partnerships with these fintechs to enhance digital offerings for its customers.
Earlier seen as competing with traditional lenders, fintechs are nowadays seen as partners who can quicken the pace of digitization at a bank.
The bank wants to leverage data to revamp its savings and corporate salary package products. The document said that the amount of data the bank generates could be used for customer analytics.
“The consultant would be required to work with the bank to use analytics to…create customer segments based on profile and transaction behaviour; build analytical models to predict customer degrowth or attrition; build analytical models to promote retention and deepening, among others,” the document said.
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