‘Our Customers Are Definitely Our Biggest Role Model’

Think ICICI Bank, and what comes to mind is an entity that has reshaped the banking topography in India. For the bank, it has been a remarkable journey — from an old-world term financial institution to a cutting-edge bank. And now, it has embarked on a new path; embracing digital in a big way — from the way it acquires, on-boards and services its customers. Chanda Kochhar, managing director & chief executive officer of ICICI Bank, in conversation with Raghu Mohan on the learnings and the plot ahead.

Excerpts:

To what extent is ICICI Bank a virtual bank now?
We are a virtual bank in every sense. From the origination of business to the way customers transact with us; and internally too, the way we handle businesses and how our employees communicate. Less than 5 per cent or so of transactions are done at branches.

So customers are virtually faceless to you…
What I am saying is that almost 95 per cent of transactions are being done electronically, but customers still have a relationship with the bank. We have relationship managers in the branches whom we call privilege bankers and value bankers. They are in charge of maintaining relationship with customers. They are in touch with customers to understand what they want, how are they getting services and so on. So, the customers’ relationship with the bank is not faceless, but the customer has the ability to make transactions without relying on a person in the bank.

How does this actually work, say on a home-loan request?
Earlier, for a loan, the customer had to give everything — photograph, salary statement and other documents — in physical form. Today, if a person is already our customer and if we have his/her salary account, we already have the person’s KYC details. Based on that, we have a pre-approved loan ready for the customer. One can just click open it and say ‘I want it’. And the loan is granted in seconds.

Assuming you have a past view on customers?
Yes. But even if we don’t have a past view on a customer, one can still upload everything in digital form. The customer doesn’t have to send us physical copies of documents. In case of home loans, we say even if the whole process has to be gone through, we can sanction the loan within eight working hours. And, every time a request for the next round of disbursement has to be made, the customer doesn’t have to submit documents about the progress of the project; we have digitised the whole thing.

In effect, once ICICI Bank has on-boarded a customer, there’s no rigmarole of going back and forth?
Yes, there isn’t that much of a rigmarole as far as a customer’s basic information is concerned. On what’s required specifically — say for a home-loan — we’ll need property documents and so on. But I must point out that there are also certain regulatory requirements regarding re-KYC at certain stages; that has to be done.

You launched I-Mobile back in 2008. Where does this consciousness about the shape of things to come spring from within the bank?
It’s in the DNA of the organisation that we should look at what’s going to happen in the next round of change, and be prepared for it. Rather than be reactive to it. So leaders (within the bank) have always looked at the next rounds of change; and ideated on how to steer the organisation in that direction. The people who deal with customers and those involved in technology changes are encouraged to think what’s customers will expect from us next. They are also encouraged to highlight this to the management and bring about those changes.

Did you seek to emulate a model?
We don’t go by one specific role model, but keep learning from the best in the field. For some, we would have looked at the Internet, for some at mobile. We also look at manufacturing companies and auto players when it comes to maintaining our internal operations; and at airlines for managing customer feedback and communicating with customers. But more than anyone, I think it is our customers who are our biggest role model. The Indian customer has always been so ahead in terms of adoption of technology — they continue to prompt us in terms of what they would expect.

But if I were to seek specifics, for instance, was it how a Delta on-boards customers?
We looked at various auto manufacturers, even the standard ones. We also looked at Ritz Carlton; we looked at some of the US Airlines for their on-time performance.

Does ICICI Bank have a full view on its customers? Most banks are criticised for not having one.
We have a 360 degree view of our customers. When a customer walks into a branch or gets in touch with the call-centre, our executive, assisting the customer at the branch or at the call-centre, opens the screen and immediately gets a full view of the whole set of relationships the customer has with us, including the transactions the customer has made through various channels. For instance, the call-centre executive is able to tell the customer that when he/she went to the branch to enquire what; or where his/her last transaction took place.

So once a customer is on-boarded the context is carried across channels and there’s no break at all?
There’s no break. But sometimes customers open different relationships in either different names or addresses, then it becomes difficult for us to keep a full view. If I open an account as Chanda Kochhar and the other one as Kochhar C, it’s difficult for the bank to know, unless I Inform, that the two persons are the same. Barring exceptions like this, we have a 360-degree view.

Does the younger generation of customers behave distinctly?
Absolutely! It’s because of the new generation that the percentage of non-branch transactions is increasing. When we started retail banking, more than 90 per cent of it (transactions) were done at branches. We have gone through an evolution — branch transactions first came down to 50 per cent, then 20 per cent, and today it’s less than 10 per cent. It happened because of the way our newer customers lead their life and the way they want to do banking.

What would be your cross-sell ratio now?
It’s different across products. It’s very easy for customers to ask for a personal loan and almost complete the whole transaction on their own. But when it is a larger product like a home loan, customers want to meet their bankers and then decide on it. So the ratios are different, but I can give you certain numbers. For example, almost 70 per cent of our personal loans are given to existing customers; and almost 60 per cent of our credit cards.

But can you give me a figure, like Wells Fargo claims it to be a six…
In India, it’s difficult to give that figure because our customer base continues to increase. Every month we add a few lakh customers to our savings account base itself. We immediately don’t start cross-selling to them. We can track the change in the ratio if our denominator remains static. Hence, its difficult to estimate a cross-sell ratio.

I think the more important way in which we look at it is to say that what percentage of some of our businesses comes out of cross-selling. So we’re saying, 70 per cent of our personal loans comes out of cross-selling; and 60 per cent of our credit cards.

Are banks in India sensitised to the benefits of cross-selling? After all, it’s a more efficient way of getting new business than carpet-bombing.
I think they are getting more and more evolved. You are right because even when we talk of cross-selling, I think it has to be mindful, focused. I think all that really comes from data analytics and figuring out which customer is more likely to need what product. And you need to have more sophisticated data analytics for targeted cross-selling rather than trying to sell a home or personal loan or credit cards to all your customers. I think everybody is gradually improving.

Self-service is being spoken of in a big way. But very few banks engage meaningfully with the customer, say even at the ATM. Is that a correct assessment?
It depends how one looks at it. Do banks engage with customers at the ATM as a channel through a physical interaction? They don’t. Because the ATM is not supposed to be a channel where one needs a physical interaction. But do customers have a meaningful interaction at the ATM? I think they do. The ATM today is no longer just a cash-withdrawal machine. The customer can register a change of password or generate a green-password as we call it. He/she can register a request for change in address; start a fixed deposit; pay bills, etc. So I think customers actually has a very meaningful interaction even at the ATM. Our ATM is becoming more and more like a branch than just a cash-withdrawal machine. But yes, the customer does not have a face-to-face or a physical interaction because that’s not what it’s meant to be.

If I were to extrapolate from what you told me, the branch of tomorrow will be entirely different from what we have today?
Absolutely. We are digitising both the channel and physical interaction. We are changing the branch experience too. So either the customer comes and does everything by way of self-service or even when the customer is driving towards the branch, he/ she can pre-create some of the transactions on mobile (like a pay-in slip.)

Look at the fully automated locker we have opened in Delhi. It’s a branch interaction, but it is digitised and is so different. You walk into the branch, do your biometric authentication, press the key and the locker comes up through the robotic arm. You then use the locker and just press a button close it.

So even transactions that happen in the physical format are getting more digitised. That’s how the branch format will continue to evolve. I think branches will have WiFi; and authentication of customers will become very different; virtual.

Three years down the line, how different will ICICI Bank be from what it is today?
We should not have a finite view on what we will be three years later. But we should keep moving on this journey of change. Our business models change almost every month, every quarter and every year. As I said, branches will be WiFi-enabled; customers will be automatically authenticated; things will be interoperable. Some of these things may not even take three years.