SBI: The rise of the digital bank

Shiv Kumar Bhasin SBI

India’s largest bank is on an ambitious digital drive, and its actions are fast resembling a startup. Take a look at these initiatives – The bank is conducting hackathons, has published its APIs for fintech companies to leverage and build apps, and has gone on an overdrive with respect to using mobile and cloud platforms. The focus has been on taking customer experience to a different level.

SBI’s CTO, Shiv Kumar Bhasin, sums up the ambition, when he says, “The State Bank of India wants to be one of the top ten digital banks in the world in the next two years.” Given this context, every initiative that the bank has taken, has its roots in a digital strategy.

Take for example, the bank’s focus on simplifying the digital experience. For a significant percentage of branch processes, the bank analyzed that customers can be serviced with lesser number of screens to click. Today, the bank’s basic principle is to ensure that a customer need not click more than four times for any service request to get completed.

The huge focus on customer satisfaction can also be seen from initiatives such as the ‘No Queue’ app on mobile, which enables customers to book a Virtual Queue Ticket (e-Token) for select services at select SBI branches. What’s unique is that customers can generate e-tokens before reaching the branch, thus avoiding waiting in the queue at the branch and saving valuable time. The app also conveys the estimated waiting time, number of customers ahead and a map showing the direction to reach the branch. Customers are also updated about their position in the queue through instant alerts.

Understanding the uniqueness of India
Few banks understand India as a country, as well as SBI does. For example, missed calls are a unique phenomenon to India, and the bank has capitalized on this fact, by developing an offering around this trend called ‘Missed Call Banking’. Users only need to give a missed call to pre-defined mobile numbers and avail of services such as balance enquiry and mini statement.
Understanding that local language is extremely important for quick adoption, the State Bank of India has ensured that its mobile wallet application is available in 13 Indian languages. It is the first bank in India to do so. In parts of India, where network connectivity is extremely poor, the bank has innovated by creating an offline OTP app, where an OTP can be generated in the absence of mobile networks
or Wi-Fi.

Transforming branches digitally
Despite high usage rates for Internet and mobile channels, it has been found that customers still derive value from branches. Representing and protecting the brand of an organization, providing a physical presence and serving the full range of customer needs, the branch network has always been the heart of a bank’s franchise and revenue generating potential.

Explains Shiv Kumar Bhasin, “Optimizing the channel mix as part of a multi-channel strategy to service and sell to customers is the new reality. On the other hand, customers seek certainty, variety and significance. Therefore, having a ‘connected brand’ becomes an important aspect of maintaining your customer’s attention.”

Keeping the above facts in mind in State Bank of India, the bank led by its CTO carried out a few disruptive transformations of the branches by optimizing the business processes, digitizing the paper based processes and ensuring digital presence in their day to day usage of paper.

Shiv Kumar Bhasin gives the example of the branch teller application transformation, where the application has been transformed by re-imagining the user interface of branch teller application to provide next generation customer experience. It has cut down the time to serve the customers at the branches by the teller from 30% to 75%. Another initiative called the SBI Digi Voucher has been undertaken with the intention of cutting down paper-based transactions. For most of the transactions, customer needs to fill-up paper forms or vouchers for cash withdrawals or for cheque or cash deposits.

“To digitize this process and re-imagine the customer experience, we created a SBI Digi Voucher mobile application so that customers could fill up virtual vouchers on the mobile app before coming to branch in the comfort of their home or office. Alternatively, if customers donot have a smartphone, they can use the kiosk in the branch to fill up virtual vouchers electronically,” states Shiv Kumar Bhasin.

The bank has also embarked upon an initiative called SBI Scribe, which facilitates digitization of customer acquisition and the account opening process. A customer needs to only fill-up paper forms on the digital pad, which has customer handwriting recognition capability. This data is then transmitted on a real-time basis to the core banking system. KYC documents are photographed and scanned by the branch staff, and uploaded real-time. This has enhanced the customer experience by a significant percentage, as the customer can walk out of the branch with a fully operational account immediately.

Building the foundation for acceleration

SBI understands that speed to roll out new services is critical in the digital age, and has accordingly adopted cloud and network virtualization services in a big way. The bank has built its own private cloud called ‘Meghdoot’. This private cloud now powers multiple business services.

Bhasin explains the significance of cloud to SBI, when he says, “One of the key concerns was the agility because whenever there was a new business launch, the first roadblock used to occur that we did not have the required hardware. The procurement cycle for buying the new hardware was long, which in turn affected the launch of the business service. To address this, we decided build our own internal private cloud. We believed that by building our own cloud, we will be able to bring in a lot of agility and it will bring down the go-live time for a huge number of business services and the applications.”

Today, thanks to the cloud, SBI has cut down 7-8 months of the procurement time. The bank is now able to provision infrastructure quickly with a faster time to market. Also, the cloud has helped us in addressing some of its peak business requirements. For example, the bank can now do performance testing during peak periods without impacting its production environment. “Today, we are running live applications on the cloud. We have our Kiosk Banking running on the cloud which has more than 60,000 registered users and out of them 20,000 concurrent users log in daily. And we have our Digital Wallet and SBI Buddy deployed on the cloud which has got now more than 2.5 million registered users. Similarly the wealth business which we have launched 9 months back is also running on the private cloud. All these developments we have done in the last 12 to 14 months.” As one can see, the cloud has really brought in a lot of agility for serving the end customers.

The bank also undertook one of the largest network transformations in the world, when it transformed its point to point network to a MPLS cloud-based network, and upgraded its 64 Kbps branch network Internet connection to a 2 Mbps one.

SBI is also one of the first enterprises in India to go in for network virtualization for multiple purposes, by using technology from VMware. Bhasin explains the rationale for going in for network virtualization. Says he, “We want to use the network in the most optimistic manner. Virtual LANs can be setup for various applications and the available bandwidth can be further most optimized and utilized across the applications by sharing the same LAN network. We are getting our digital wallet certified for PCI DSS compliance and that’s where we are finding the NSX implementation coming handy to us because this is deployed on a shared cloud which is a massive cloud and since it is the NSX technology ring-fencing the wallet application, so the PCI DSS compliance scope becomes this virtual boundary across this application. NSX is helping us to go for in a very large cloud. For example, SBI has more than 1,500 VM’s while my wallet is consuming only say 25 VMs out of 1,500. So, we are able to certify our application on this small subset of this infrastructure as well.”

The bank’s private cloud has been enhanced and grown further to host resilient, stable and virtualized branch applications, which will make it one of the largest hosted private clouds deployed by any bank.

Planning for the future
The bank is preparing for the future by taking a series of initiatives. For starters, it has started inviting startups to pitch their solutions or products to the bank on specific days of a month. The bank believes that the engagement with startups will help it ride the wave of digital disruption in a faster manner. SBI has also decided to publish some of its APIs for fintech companies. “We have exposed some of our APIs in a sandbox, and we encourage startups and fintech firms to build applications or create services leveraging our APIs,” says Shiv Kumar Bhasin.

Another innovation is a P2P funds transfer application that allows customers to quickly transfer funds to a third party without beneficiary registration, either through mobile number or email-ID of the beneficiary.

The bank has setup a private cloud for digital channels (for customer facing Internet and Mobile Banking applications), so that it can serve at least 50% of its more than 29 crore debit card customers by 2020 using digital channels. The bank is also considering deployment of the public cloud for hosting utility, communication and productivity enhancement services for its staff

The bank is also dipping its feet into cognitive computing, and is evaluating a number of vendors. The objective is to enhance branch services using artificial intelligence. Bhasin believes that the top ten enquiries about certain products or services can be handled by chatbots, which can only improve over a period of time.

An important part of the strategy is to be present in mediums where its millennial GenY customers are present. SBI’s Facebook app, called SBI Mingle, allows customers to do a balance enquiry, download mini statements or initiate a funds transfer.

Understanding the potential of rural India, the bank has also announced a new initiative called ‘SBI Digital Villages’. This initiative aims to help villages to transition into a cashless economy, by adopting them. In the first phase, 21 digital villages have already been adopted, and the bank plans to have 100 villages under this initiative by the end of FY 2017.

For a bank of SBI’s size (over 25,000 branches serving over 350 million customers) – even a small percentage of efficiency enabled by technology can have massive implications. The analysis of SBI’s digital transformation is also important, as it shows India’s public sector giants how they can adopt similar strategies and leverage their size and scale, while being as nimble as a startup.

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