Banking Sector Dwindles; Internet Industry for the Rescue
The economic slash down in the US has serpented into India as well. Banks in India have been going through a lot ever since the government declared an inflation of 11%. With high inflation rates and a trough in Indian economy the Reserve Bank of India (RBI) is likely to release financial grants to various banks. Earlier, a few days ago, RBI promised a grant of Rs.1500 crores of relief for the inflation-hit agricultural sector.
Similar steps might as well be followed in US and across the globe. Bank guarantees and down-sizing is also expected to appear in the near future.
PPTized curry:
How can Internet and IT industry help the Banking sector?
With IT and ITES sector feeling the blow of the crisis in US there is little that IT companies in India can do to sustain revenues if they do not resort to domestic opportunities and those in the growing economies. Indian banking sector for instance is one such opportunity – how?
In a time of crisis, cutting down overheads and costs is on the “to do list” of every bank. Internet industry can definitely help, it is only that banks will have to realise the true power of Internet.
How have Indian banks employed the Internet
- Net Banking / e-Banking / Online Banking
- Statements / Transactions Summary
- Inter Branch Funds Transfer (all branches not e-banking enabled)
- Inter Bank Funds Transfer (all banks not enabled with this service)
- Bills Payment – Phone & Electricity
- Lead Generation for Deposits, Investment Plans, Credit Cards
- Marketing, Advertising, Brand Building and Lead Generation
That is pretty much of it and I would say that’s not the best monetisation on a bank’s website. I’ll tell you why, because in India net banking is one of the most popular activities on the Internet. According to Alexa, the list of 100 most popular websites in India has 4 websites that are of top most banks in India.
- www.icicibank.com – Rank 27, ICICI Bank
- www.hdfcbank.com – Rank 34, HDFC Bank
- www.onlinesbi.com – Rank 98, State Bank of India
- www.citibank.co.in – Rank 100, Citi Bank
And these portals are only paying costs to maintain their portals, servers, IT staff to support net banking for their customers. However, online banking still saves a lot of costs and I wonder that could have been the main reason why Indian banks considered moving online.
Now, that these banks have so much of traffic and what do visitors do? They transact, transfer funds, pay e-checks, fill a lead form for a loans, insurance or an investment plan. Why let go such visitors who are thinking nothing but money and not just money; flowing money!
How to monetise such a high-quality traffic? What can Banks do?
1. Let them shop: Isn’t this like a “no brainer”? When a customer is on a bank’s website he is either thinking of multiplying his money or to safeguard his money. He also transacts by making online payments, trading forex, stocks and receiving funds.
Well thats it! This customer is more than comfortable playing with his money on his bank’s website.
Now if the bank could provide a great deals on daily need products like grocery, books, gadgets etc. why would I even bother going to eBay or any online store and spending hours on bidding and comparing prices?
A grocery deal with a retail chain, books from a nation wide supplier, same thing for gadgets and reward points on every purchase. No consumer can resist a Discount + Reward Points deal. Good deals will attract more customers as well.
There is huge amount of money that can be made out of this idea for any bank since there is no product display cost involved; only order delivery costs and that can be bared by the supplier and the bank could earn a commission.
2. Payment gateway give-away: I don’t know why services like Paypal or Google Checkout exist when banks handle all the transactions. Why can’t an online merchant just have a free payment plugin for his website powered by his bank? The bank could charge a small %age on every transaction.
3. Customer support on the Internet: Every bank can offer customer support over the Internet. Millions of people use voice-chat enabled Instant Messengers. Does that ring a bell?
For banks – Go have your bank’s plugin hard coded into Yahoo Messenger for instance. Yahoo might even pay you for that because that will lead to more people using their service. They’ll be able to make more money from ads and its a great brand building exercise for them anyway.
Your customers will now have a free mode to reach you. No expensive telecom equipment, end to [your call is valuable to us, please stay on the line] bull shit for customers (everyone hates to wait), cost per seat = salary of support executive + electricity. There is a lot more to it.
4. Go Green: That’s the cost saving mantra for today world wide. Use energy efficient web servers, promote paperless banking because we don’t need to sign any papers by hand these days; we have digital signatures available. They can cost around Rs.2000 but the bank can provide that to their customers for FREE. I am sure you’ll save more than that by resorting to paperless banking.
5. Mobile / Phone Banking for rural areas: Give away mobile phones for FREE to rural customers. The present day Mobile banking solutions mean just a few button clicks. Mobile users in India are 5 times more than the number of Internet users – 300 million mobile subscribers in 2008.
Other than just banking, the customers will also use those phones for communication and you could easily have a share in that revenue to cover for costs and overheads.
6. Let Debit Cards go online: Most of the Indian online stores don’t accept debit cards. I wonder why?
The number of debit card holders is 10 times more than that of credit card holders in India. Let us use debit cards for online shopping atleast where we can pay in the Indian currency. No one would mind paying a small convenience fee as low as Rs.10 per transaction. Lets say, the number of daily online purchases in India is 1,00,000 and that means Rs.10,00,000 can be made everyday and that is Rs.36 crores to be made every year. Actual figures are a lot more than that!
Loads of good opportunities for IT companies in India to help banks in India and globally.
Phew! I am done cooking this curry and served it hot. Let’s see how many takers are there.
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Internet Industry can help the dwindling Banking Sector…
How can Internet and IT industry help the Banking sector? There are a lot more ways banks can monetize their websites….
Play infomrtaive for me, Mr. internet writer.
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