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Mr K.V. Kamath, Managing Director and CEO, ICICI Bank, flanked by Mr K. Anji Reddy (right), Chairman, Dr Reddy's Laboratories, and Mr Sunil Alagh, President, AIMA, at the the 32nd National Management Convention in Hyderabad on Friday. - P.V. Sivakumar

Hyderabad , Sept. 23

ICICI Bank Ltd plans to embark on a two-pronged strategy of rapid penetration into the rural market, unlocking the power of technology, while laying special thrust on overseas expansion.

The Managing Director of ICICI Bank, Mr K.V. Kamath, said that the bank had restructured its operations about four times in the last 10 years and continues to innovate to stay ahead in a rapidly eroding competitive advantage.

Speaking at the All India Management Association (AIMA) Convention, Mr Kamath said in 2000 while 94 per cent of all transactions were made from the bank, the number has come down to 25 per cent.

While about 3 per cent of the total customers of the bank used ATMs in 2000, this number has swelled to 38 per cent.

While about 2 per cent of the customers actually used the Internet banking in 2000, this has gone up to 27 per cent.

So is the case with call centres, whose access has gone up from 1 per cent in 2000 to 10 per cent, although ICICI expected this to be much more.

Speaking on `Innovation for the future' and how bank took to innovation, Mr Kamath said in the current environment of volatility there is a need for constant innovation.

The annual technology operation expense per customer works out to barely 5-10 per cent of global banks, thanks to open systems.

"The bank's in-house eLabs is behind these technology innovations," Mr Kamath said.

Referring to the likes of Nokia and Motorola, Mr Kamath said, "If the conventional approach to decision-making was adopted in this fast-paced telecom industry, where board of directors decide before a decision is taken about the next product, they would simply be out of business.

Therefore, such companies depend on their marketing and sales force to decide on what their next product could be, based on customer feedback to researchers."

"ICICI went through a restructure process a decade ago and decided on a new paradigm to leverage technology for service delivery and this has paid off significantly. Now, we believe the same can be done in the rural parts of the country. Therefore, rural banking is the new area of focus through micro finance, rural Internet kiosks and low cost ATMs. We see the rural market as the next big opportunity," he said.

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