Less than two months ago, Karur Vysya Bank (KVB) was awarded Best Retail Bank of The Year by India Banking Summit. How did they beat the competition to get there? What gave them that competitive advantage? Most importantly, can other banks pull off such a feat too?
Founded in 1916, KVB is a veteran private sector player in the Indian banking industry. Through its extensive network of 788 branches and 1803 ATMs, KVB has deposits of 56 thousand crores, and a total business of 1 lakh crores. With a capital ratio of 11.79%, KVB is a stable and reliable bank conforming to RBI’s standards. However, KVB had a thorn in its side — legacy systems.
Problems faced by KVB
KVB was started to address the need for SME loans and agricultural loans. It has since diversified its portfolio, but lending is one thing KVB has lots of experience in — all the more puzzling since KVB was being plagued by issues caused by not going digital. The loan application process was a lengthy offline process, and many customers were dropping off as a result. With dwindling customer engagement, KVB also began to witness its market attention declining proportionately. The solution to these issues was to digitalise — in fact, go paperless entirely. But how would a bank — a financial entity — do something so technically different from its core competencies? That is where Market Simplified came in.
Challenges for Market Simplified
Digitalisation is not just a matter of designing a mobile app and/or a web app, and connecting these apps to the banking system. When a client wishes to go paperless, we work closely with them to create a strategy that bakes a digital and paperless approach into the very DNA of the client organisation. The mobile/web app is mostly a supplement to a larger solution, and not a complete solution in and of itself.
In KVB’s case, the mobility solution provided by KVB’s core banking vendor was very barebones and devoid of features. This would be a concern as the mobile app would have to be designed to account for a simpler backend, which could not be altered. The journey from offline to online would need some significant changes inside KVB as well, since personnel would have to be retrained on how to deal with the new, more efficient processes. Smartphone penetration was another challenge – unless KVB had enough customers banking through their smartphones, it would not be cost effective. A closely related challenge was to drive smartphone-using KVB customers to install the app in larger numbers, by getting it good visibility on the concerned app stores. Ultimately, all this would only be applicable if customers continued to use the app — in other terms, customer engagement was a critical factor. To allay these concerns, we first analysed why KVB wanted to go paperless.
Why KVB wanted a digitalised loan module
India is one of the most complex, vast, and competitive markets for pretty much any large company to operate in. Given that the average Indian makes spending decisions by an eclectic mix of price consciousness and brand trust, the banking industry was a battlefield. KVB needed to entrench its market presence firmly, especially in the face of the upstart NBFCs which posed a threat. KVB also needed a solution to reach more customers quickly, as time was running out. A larger, more engaged customer base, KVB concluded, would help them stave off the competition and stay ahead of the curve.
Market Simplified’s solution
Any front-end solution we develop is meant to be simple to use and easy to understand, thanks to our carefully thought-out UI and UX approach. Our mobile app for KVB is based on an assisted model, which means it is not for the use of end customers, but for bank staff. The mobile app can be used for vehicle/retail/home/personal loan applications. The web app is for SME loans for small and medium scale industries. It is a self-service application.
Ultimately, we created the following modules for KVB and helped them go paperless:
Loan against property
Our solution reduced turnaround time by >50% for SME loans and ~33% for retail loans. The customer experience improved, owing to paperless processes, and without the need to run around filling forms. Time to market dropped significantly, and overall loan processing time also reduced. The improved strategy and its effective implementation, helped by our solutions, made it possible for KVB to win the Best Retail Bank of The Year award at the India Banking Summit in 2019.
About The Author: Khushboo Lahoti is currently working as a Business Development Executive in Market Simplified India Ltd. She is a humble renaissance person. Inventive and creative ideas are her thrust.