Comments
To get customers to use low-cost alternative delivery platforms such as Net banking and mobile banking, banks are planning to offer various incentives.
Mobile transactions, which currently constitute just 0.1 per cent of total transactions, could go up to 20 to 30 per cent by 2020, if banks create awareness about the platforms and assure customers about the security of transactions. It will be the second largest channel after ATM, according to a Boston Consulting Group report.
Banks are looking to leverage these low-cost platforms as they cost them a fraction of ATM or branch transactions.
“The cost of a transaction put through a branch is Rs 40. The transaction cost is much lower for net banking at Rs 6 and mobile banking at Rs 9. As transaction volumes on net and mobile pick up, transaction costs will come down,” said Mr C.V.R. Rajendran, General Manager, Corporation Bank
As Net banking and mobile banking are low-cost platforms, experts from the banking industry feel that banks should offer incentives to customers to switch to them.
“Banks should look at giving financial incentives for promoting usage of Internet banking and mobile banking,” said Dr Ashok Jhunjhunwala, Professor, IIT-Madras, at the recent FICCI-IBA conference.
Rewards programme
“We are planning to offer cash-back incentives to our existing Net banking and mobile banking customers in the next 2 to 3 months. We will also give various incentives on loans to these customers,” said Mr M. Narendra, Chairman and Managing Director, Indian Overseas Bank.
Bank of India is planning to unveil a rewards programme such as frequent flyer points and other incentives to attract its customers to use these platforms, said Mr B.A. Prabhakar, Executive Director, Bank of India.
ICICI Bank is currently offering an e-coupon worth Rs 300 with a shopping site for users who activate its mobile baking platform.
Offering incentives is a good idea to promote these low-cost platforms among customers, said Ms Chanda Kochhar, Managing Director and Chief Executive Officer, ICICI Bank.
She also emphasised that these low-cost delivery platforms would help in making the customer base “sticky”.
Experts feel that one of the main issues for these platforms is that though customers have embraced alternative delivery platforms well, the bank staff are still trying to understand and get used to these platforms.
Mr Rajendran also added that the bank recently started a separate division called ‘alternate channels' which is exclusively looking at leveraging these platforms.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.