ICICI Bank reimagines banking for the digital world

B Madhivanan, CTDO, ICICI Bank
B Madhivanan, CTDO, ICICI Bank

The bank, while continuing to undertake transformational steps in the current scheme of operations, and introducing instant banking products and services, has also ensured adoption of new age digital technologies to serve the current banking products and services at a fraction of the cost. Express Computer’s Srikanth R P, Abhishek Raval and Mohit Rathod report on how the bank is using emerging technologies to significantly alter the way banking services are consumed and delivered

Technology has been in the DNA of ICICI bank since its inception. Be it one of the first banks to offer ATMs or banking using social media, ICICI Bank has been a pioneer in identifying market trends much more earlier than its competitors. Today, the market has completely changed, with born-in-the-cloud startups competing with traditional banks.

The first impact of digital has been on the payments business – from cash to cards, to mobile payments. Anything that can be converted from physical mechanism to a completely digital mechanism is digital transformation. The way employees interact with the systems is different, the same is the case with how employees interact with the customers.

“This digital transformation is forcing us to do a lot of rethinking on three bases. Our existing business is very critical; for incumbents like us, the traditional business model is important. Within our existing businesses, we are making the processes much more efficient. This includes things like robotic process automation covering 950 processes,” states B Madhivanan, CTDO, ICICI Bank. Another important element has been the ability to service customers, both existing and new. In terms of existing customers, it’s about cross-selling; whereas it’s about creating bases in terms of new customers. For instance, providing tablets to the front-end for the sales teams or digital forms for SMB retail customers.

Transforming and reimagining banking
On the digital front, the bank’s efforts include a different approach on how processes are viewed end-to-end and how decisions are taken; alongside high level Robotic Process Automation. On the transformation side, the bank wants to steer businesses in a completely different way. “Our Executive Director and MD are driving the agenda of direct-to-consumer (D2C). Until now the model has been intermediary in nature – it could be an employee, or a channel partner. Now as the world is becoming bigger and more connected, it’s creating an ability for us to reach out directly to the customers – which is crucial for us,” explains Madhivanan. Whether customers do banking through retail internet banking, or mobile, it contributes to the digital story. Transformation for the bank is about virtually recreating a model wherein the customers come directly without any intermediary.

Additionally, a thought process is underway in completely reimagining the bank and the services offered. “We are thinking if there is a way to reimagine the most often used banking services, from a mobile perspective – such as payments, lending, trade, financial management, buying policies, investing. Our iMobile app, for example, acts as a channel on one hand; we have about 180 services on mobile currently. We are also trying to reimagine if we can do things that we have never thought on iMobile. We are also working on voice activated services,” says Madhivanan.

There are various products on the sidelines of current and savings accounts, wherein the bank is trying to reimagine the experience and context. The price points of insurance are high because it is being delivered by a physical mechanism. If the same insurance product is offered on a mobile app, there is a possibility of creating customized products at a cost that would have never been possible in a branch scenario. The impact of this is not just on cost-to-income, but there is a new segment of revenue. For instance, a policy can be sold over a phone, which is not possible in physical bank branches. This is making the entire context more relevant – it is a unique combination of driving consumer journeys.

Run, transform and reimagine are the three areas being worked upon. The first two will primarily focus on cost-to-income; whereas reimagination will create completely new business segments. This is being made possible through a three-way process. Transformation is a combination of the technology and the innovation teams. Whereas, the reimagination part is a combination of new age technologies such as retail internet banking, corporate internet banking, iMobile, etc.

Furthermore, from a mobile perspective, the bank is open to build partnerships. “The idea is that we need not own everything; there are certain things that our partners can do well. The last part is about continuing innovations; this includes two areas – hackathons, wherein we encourage people to pitch to us. If we find a particular fintech company solving our problems, we try to engage with them and build them – sometimes we even invest in them. Going forward we want to build this complete Sand Box, wherein we will put 30-40 APIs for developers. There are plans to open up the API platform, but it will happen over a period of time. While we talk about openness, no platform in the world is completely open; so there will be APIs and we will participate, but it will be within certain boundaries. There is a fine line between experimentation for developers and where we will put up APIs for payments. We keep opening our APIs during our hackathons – our development portal for experimentation will be made permanent,” states Madhivanan.

Creating instant consumption models with technology as a foundation
This is an era of instant consumption, and the bank realizes the strategic importance of creating products that can be consumed immediately. Backed by powerful analytics, the bank has created several instant products – instant credit card, instant PPF facility, instant digital credit. Several of these products are unique. For example, the bank has tied up with Paytm to jointly launch ‘Paytm-ICICI Bank Postpaid’, a digital credit account with instant activation: with no hassles of documentation or branch visit, while activation is fully online.This enables lakhs of new-to-credit customers to get instant digital credit for shopping. This is based on a new Big Data based algorithm by ICICI Bank for real-time credit assessment of customers. The algorithm uses an intelligent combination of financial and digital behavior of the customer including credit bureau check, purchase patterns, frequency of purchase to ascertain the credit – worthiness of a customer within a few seconds. Based on the credit-score of the customer, the bank offers upto 45 days interest-free credit limit.

Similarly, the bank has announced a facility of issuing instant credit cards. This enables the savings account customers of the bank to get a credit card instantly, in a completely digital and paperless manner. This new offering enables a few lakhs of pre-qualified customers to instantly get the credit card number and other important details online, using which, he/she can immediately start shopping online, without having to wait for the physical card to arrive. The facility significantly improves customer experience as it allows to choose from a suite of credit cards and create a credit card instantly. More recently, the bank also launched the country’s first instant PPF account facility making it completely paperless and digital. With this new facility, customers of the bank are no longer required to visit a branch and submit physical documents to open a PPF account. They can now conveniently open a PPF account anytime, anywhere using the bank’s digital channels of internet and mobile banking.

ICICI Bank has also announced the launch of instant disbursal of personal loans through ATMs. This service enables existing salaried customers of the bank to get pre-qualified personal loans in their savings account instantly, in a digital form. No papers involved. The bank has announced the launch of an instant overdraft facility for MSME (Micro, Small and Medium Enterprises) customers in a completely online format. Christened ‘InstaOD’, this offering in the Indian banking industry enables a few lakhs of pre-qualified current account customers of the bank to instantly avail of the facility without visiting a branch and submitting physical documents.

Acting as a technology facilitator
With technology in its genes, the bank realizes the value that it can bring to a partnership. For instance, the partnership with the Municipal Corporation of Gurugram. The bank has announced the launch of a digital service to facilitate doorstep payment of property tax and water bill, by owners of properties in Gurugram. A first-of-its-kind solution in the country, it integrates a hand held point-of-sale (PoS) machine with the Municipal Corporation of Gurugram (MCG) server. This enables it to instantly fetch and update real time data from the MCG server.

“When we do collection for a government entity, huge money is made because we are their primary bankers. Whether it is smart city or a transit business, we invest in technology in each one of them directly or with our partners. Another instance is, working with a department, for instance Surat Municipal Corporation, wherein we will try to cover everything. The right term for this is ‘ecosystem banking’. Here technological expertise also comes into play; sometimes we work directly, other times we work with TCS, payment partners, depending upon our flagship role in the project. Co-creation is the way to go, because the standardized system will only work for businesses like retail,” explains Madhivanan.

Another innovative offering is the launch of a unique mobile banking app for rural customers that allow them to access banking services as well as information on agri services. Christened, ‘Mera iMobile’, it allows users in rural areas to avail as many as 135 services — on their mobile phone, helping them to save the time and cost of visiting a branch to avail these services. The list of services include Kisan Credit Card, Gold Loan, Farm Equipment Loan and loans to Self-Help Groups (SHGs). The app also enables them to undertake an array of frequently used banking services from their smartphone, without using mobile internet services.

Additionally, it is the first banking app to offer agriculture related information like crop-wise mandi prices of nearly 230 crop varieties across 460 mandis. It also displays taluka-wise weather update for close to 3,700 talukas across and over 300 districts, aiding farmers to plan their sowing and harvesting activities conveniently and in an informed manner. ‘Mera iMobile’ is the only banking app to provide these value added services in one single app for the rural customer. ICICI Bank believes that the next wave of growth in internet usage will come from rural India due to growth in cheaper smartphone handsets, spread of wireless networks and evolving consumer behavior. The launch of this app is a step in this direction. ‘Mera iMobile’ has been specially created to be ‘light’ to enable customers in rural and semi-urban markets to download and run it easily even with low internet speed.

Another example is the MoU that the bank has signed with the Government of Odisha. The bank has signed an MoU with the Department of Electronics & Information Technology, Government of Odisha to provide e-governance services to the people of the state. This initiative will enable anyone including non-ICICI Bank customers to pay their utility bills, including electricity, water, withholding tax, etc directly on the website of the Government of Odisha, using an ICICI Bank payment gateway.

Riding on new age technologies
ICICI Bank is among the first few globally to exchange and authenticate remittance transaction messages as well as original international trade documents related to purchase order, invoice, shipping and insurance, among others, electronically on blockchain in real time. The usage of blockchain technology simplifies the process and makes it almost instant – to only a few minutes. Typically, this process takes a few days. ICICI Bank executed these pilot transactions via its blockchain network with Emirates NBD on a custom-made blockchain application, co-created with EdgeVerve Systems, a wholly owned subsidiary of Infosys.

The blockchain application co-created by ICICI Bank replicates the paper-intensive international trade finance process as an electronic decentralised ledger that gives all the participating entities including banks the ability to access a single source of information. This enabled all the parties, viz, the importer in Mumbai; ICICI Bank, Mumbai; the exporter in Dubai and Emirates NBD, Dubai to view the data in real time. It also enabled them to track documentation and authenticate ownership of assets digitally, as an unalterable ledger in real time. This facilitated the stakeholders to execute a trade finance transaction through a series of encrypted and secure digital contracts. Further, it allowed each participant to check online the status of the application, transfer of title and transmission of original trade documents through a secure network, while preserving client and commercial confidentiality. It brings in the improved convenience of accurate and quick transactions eliminating manual intervention, courier of paper documents across countries and verification through trade intermediaries. This is in contrast to the current process which involves a complex and lengthy paper trail that requires international shipping and courier. The pilot transaction was executed to showcase confirmation of import of shredded steel melting scrap by a Mumbai-based export-import firm from a Dubai-based supplier.

The second initiative involved a transaction on the blockchain application that enabled an ICICI Bank branch in Mumbai to remit funds to an Emirates NBD branch in Dubai in real time. It could do so as the blockchain technology is equipped to send real time financial message to the recipient bank allowing the remittance transaction to take place instantly. The pilot transaction eliminates the need for financial messaging between banks and heralds the convenience of instant cross-border remittances for retail customers. Currently, international remittances take a few hours to upto two days. It is also envisaged to reduce the cost of remittance for customers as well as banks.

“The underlying technology of blockchain including its features – instant transmission of data, protection from frauds – is very positive. For us, adaptation of blockchain through a private network is what we are banking on. It plays well in anything that involves multiple players and takes a lot of time today. We have picked up key areas wherein we will work on blockchain. Trade is a very complex area, involving a lot of paperwork, regulation, physical movement of goods, requiring trust among the participants. Today we are all dependent on some third party, where the time taken for any transaction is 15 days. Whereas, blockchain can effectively accomplish it in 20 minutes,” states Madhivanan.

AI, robotics and machine learning use cases
In remittance, ICICI Bank has started using robotics. However, the challenge with robotics and NLP is that, until now the structured and complex things have been done. “The biggest achievement will come when we start doing unstructured and complex things. For instance, taking a credit decision which is still not AI driven. These are the areas that we are going to explore. Apart from this, we are seeing that it will move from app to voice services such as Siri and Alexa,” says Madhivanan.
In September 2016, ICICI Bank announced the deployment of ‘Software Robotics’ in over 200 business processes across various functions of the bank including retail banking operations, agri-business, trade and forex, treasury and human resources management among others. The bank is the first in the country and among few globally to deploy ‘Software Robotics’ that emulates human actions to automate and perform repetitive, high volume and time consuming business tasks cutting across multiple applications.

At ICICI Bank, software robots have reduced the response time to customers by up to 60 per cent and increased accuracy to 100 per cent, thereby sharply improving the bank’s productivity and efficiency. It has also enabled the bank’s employees to focus more on value-added and customer-related functions. The software robots at ICICI Bank are configured to capture and interpret information from systems, recognize patterns and run business processes across multiple applications to execute activities including data entry and validation, automated formatting, multi-format message creation, text mining, workflow acceleration, reconciliations and currency exchange rate processing among others.
The software robots now perform over 1.5 million banking transactions every working day. “We plan to scale up to over 1000 software robotics led business processes by end of this fiscal, which will be able to perform a large percentage of our transaction processing ,” says Madhivanan.

iPal – ICICI Bank’s AI enabled chatbot
ICICI Bank announced the launch of iPal, artificial intelligence (AI) powered virtual personal assistant. This chatbot addresses about one million queries/chats monthly on the bank’s website and mobile application – iMobile, making it the country’s largest and most comprehensive AI-led chatbot.

ICICI Bank is the only bank in the country to offer AI-led chatbot services on its website and mobile application. In the last eight months, iPal has interacted with nearly 3.1 million customers with nearly 90 per cent accuracy. It also handles close to one million queries monthly on the website and mobile banking application. It offers customers resolution to their queries instantly 24×7 and on all days, thus offering unparalleled customer convenience.

In addition to offering instant responses to queries, the iPal engine on iMobile undertakes financial transactions as well – an industry first feature. It enables customers to resolve their queries and also undertake financial transactions of bill pay, fund transfer and recharges. This too is available on all days and at any time.

Currently, the bank’s iPal chatbot is serving the customers by AI driven information – either by self learning or by the agents feeding information and making the bot more intelligent. The chatbot has been servicing requests accurately. Servicing is the use case for AI now, however going forward, personalization will be the trend. The other big trend besides personalization will be voice. Siri, Alexa are becoming more and more mature in the ecosystem. This simply means, instead of typing, the customer can do voice enabled transactions with AI running on top.

Voice as the enabler
In November 2017, ICICI Bank launched voice-based international remittance service to enable non-resident Indians (NRIs) to send money to any bank in India. With this new feature in the ICICI Bank’s Money2India app, an NRI customer can instantly initiate a remittance to his/her existing payees in India with just a simple voice command to Apple’s virtual voice assistant, Siri, on his/her Apple iPhone/iPad. It improves customer’s convenience significantly as it replaces a five-step process, which was required to initiate a remittance to India earlier.

To get the benefit of this unique offering, the customer needs to simply speak out the ‘nickname’ of the registered payee in the Money2India (M2I) app to whom he/she wants to send the money to and the amount to be sent. For example, the customer can initiate the process by simply saying “Send $100 to Mom with Money2India”. Based on this voice instruction, Siri converts the voice command to text using Natural Language Processing (NLP) and populates an interface for confirmation with the details. The customer is no longer required to enter the payee name or amount to be transferred, since he/she would be using a voice command to provide instructions to Siri.

iMobile – Handling transactions worth trillions
iMobile, the bank’s mobile banking application completed a decade this year. It started off as an SMS banking platform, which continues till this date in rural areas. The internet banking and the ICICI Bank’s digital wallet, Pockets co-existed with iMobile. “The emergence of the millennial population, change in the demographics, the rapid penetration of the mobile device and the corresponding decline in the data charges made iMobile as a relevant proposition,” he informs.

iMobile has been growing by leaps and bounds since the last four years. “The transactions have doubled in the last four years and have almost trebled in the last two years,” says Madhivanan. Overall, the number of digital transactions in December 2017 was 84 per cent of the overall transactions, of which more than 50 per cent of the transactions happened on the mobile channel – the rest were done at ATMs and branches. The trend coming out is – mobile channel is fast outpacing internet banking. Not only with regards to the number of transactions, but also in terms of the acquisition of new customers.

In the last fiscal, 2016-17, ICICI Bank processed transactions on the mobile channel, worth ` 2.64 trillion and was the numero uno in the Indian private sector bank space. In 2017-18, until October, the mobile channel has processed ` 3.1 trillion worth of transactions.

On the iMobile application, the bank has been able to acquire eight million customers. There are 180 services available in the app. So, the app that started offering SMS and few other services a decade back now enables 180 services. It includes the most used services like account viewing, person to person transfer, bill pay etc. For high value cheque tracking, the customer can track it on his mobile, as to at which stage of processing is the cheque lying at any given point of time before it’s credited / debited. This feature is being used heavily.

Banking as a platform
The next big ticket item for the ICICI Bank will be the story of banking as a platform. The financial products/services like insurance, protection, lending, payments (mostly small ticket). This is ‘sachetisation’ (buying banking products and services in small consumable formats) of banking. This becomes possible because of the API infrastructure built by the bank. Some of the robust and stronger services are run on APIs while microservices will be created for specific transactions. For example, the iMobile app may be used to provide a loan as less than Rs 5,000. Even a Rs 500 SIP is possible. Giving small ticket, high frequency products and then backing it up with personalization will be the next big trend.