State Bank of India: Transforming banking with technology
India currently enjoys prudent fiscal conditions, stable inflation, growing trade and steady employment creation to support sustainable GDP growth.
As the largest bank in India, with nearly 25% of the its financial market, the State Bank of India (SBI) is an important contributor to the advancement of the nation’s stature globally.
Today, SBI is highly competitive with a diverse base of customers. The bank’s key focuses include technology, to establish a comprehensive monitoring and control framework; and to build a large pool of talent in its committed workforce.
To support this, SBI has re-engineered its internal processes to improve risk management and encourage growth. Technological advancements are continuously being implemented for back-end processes, and these are helping deliver more efficient customer service.
Transaction banking within the bank uses a technology driven platform that offers comprehensive transaction products and solutions to clients. SBI adopts new technology to handle bulk transaction requirements of clients, along with other value-adds like customised management information systems, integration with enterprise resource planning systems, and a dedicated single point client support cell.
Analysis of transaction patterns enables SBI to assess a client’s needs for other banking requirements such as credit, fund management and cross selling.
Clients using SBI’s transaction products include corporates, government and financial Institutions such as non-banking financial companies (NBFCs), insurance companies, banks, mutual funds and SMEs, to support their fund management requirements with transaction banking solutions.
Recently, SBI expanded its collection related solutions based on virtual account numbers, in order to maintain its leadership in cash management solutions in the Indian market.
Today, SBI’s payment services stand out, not only for their comprehensiveness of end-to-end solutions for users, but also because of the wide variety of users. These solutions are also provided to central and state government-related bodies.
TRANSACTION BANKING GROWTH
In recent years, the bank’s transactional business has accelerated. Fee Income from its Transaction Banking business increased by 33.62% from approximately $88.14 million (INR 616.96 crores) in the financial year 2016-17, to approximate $117.77 million in the financial year 2017-18. This has reached $189.58 million in the 2018-19 financial year.
A 40% growth in fee income has remained consistent over the past three years. The bank’s transaction business also generated float income of approximate $73.85 million in the 2018-19 financial year with an average increase in turnover year-on-year of more than 50% over the past three years.
SBI has grown its client base in the SME sector, increasing its penetration among existing, as well as start-up business.
At SBI, transaction banking related business rests on four pillars – these include large corporate clients, government clients, medium and small business clients and cross border clients.
SBI’s clients include large corporates and institutions. Corporate customers are serviced through customised transaction banking solutions which include a number of teams focused on the clients specific areas of need, in order to facilitate specialisation and customisation of products being offered to clients.
Each client is assigned a dedicated marketing executive, led by a relationship manager, to coordinate the client’s requirements.
SBI also leverages its credit relationships with corporates clients to provide them with customised transaction banking solutions within specialised branches in all major cities in India. Marketing, service and delivery for corporate clients is available through an extensive network of branches, credit cards and electronic payments platforms.
The bank has traditionally been the preferred and accredited banker for central government ministries and departments.
Today, SBI holds more than 80% of government business. The bank is at the forefront in developing e-solutions for government to facilitate the transition of government business to online platforms, while creating greater efficiency and transparency.
Additionally, SBI is developing customised digital solutions for government transaction banking requirements. Solutions provided to government clients include payment to vendors, salary payments of employees, direct benefit transfers under government schemes, recruitment-related solutions and disbursement of scholarships.
SMEs are the life-blood of India’s economy. This important sector is served through a dedicated team in each state capital, as well as a specialist team at the bank’s corporate centre in Mumbai.
These clients consist of traders, small business houses, retail stores, agents and contractors. Transaction banking solutions provided to these enterprises enables them to not only manage their cash flows in the most efficient and effective manner, but also helps them to keep abreast of technological advances in the economy, at a minimal cost.
In addition to its ongoing support for India’s SMEs, SBI is expanding its transaction banking business to cross border clients and tapped clients in Sri Lanka, with plans to also reach clients in Nepal, Bangladesh and other neighbouring countries. The bank’s offices in these countries will make it easier for SBI to realise these growth strategies in the near future.
Major transformational reforms in India, such as the government’s demonetisation measures and tax reforms through the introduction of India's GST, saw the bank emerge as a resilient player on a steady path of quality growth.
SBI ensured that transaction banking solutions were availed by the maximum number of small traders and entrepreneurs immediately after demonetisation.
As a digital bank, SBI’s approach to innovation is to make fintech customer-centric, thereby enabling it to capture and convert data into actionable insights, to create a simple, virtual organisation that is ubiquitous to every customer, offering tailored products to meet the needs of individual clients.
SBI has a multi-channel delivery model, which allows it to offer clients a range of choices to carry out transactions through any channel, at any time and at any place.
The bank’s commitment to the highest standards of risk management, ethics and governance safeguards its clients’ interests, at all times. SBI is known to be a transparent, cost competitive, and innovation driven organisation. It is incumbent upon SBI to ensure that its business operations remain fully compliant with procedures and regulatory requirements.
Over time, SBI has evolved robust transaction banking solutions aligned with regulatory standards and international best practices.
SBI accords highest priority towards creating an environment of increased risk awareness at all levels. The bank aims to constantly safeguard clients with the appropriate security measures, including cyber security measures, to ensure avoidance or mitigation of various risks.
All of the bank’s branches and offices are equipped with a disaster recovery/business continuity plan in order to render uninterrupted services in the event of any possible business disruption.
As the Indian economy undergoes transformation, SBI is also becoming more agile on the path of innovation and knowledge. This ensures that SBI is future-ready for India’s journey of transformation.
A transforming India requires modern and capable institutions to help realise its aspirations. For SBI, this means having strong capabilities and a value-based culture within its people. SBI continues to be focussed on embedding an ethical and value-based culture throughout the organisation, which is at the core of SBI's strategy and processes.
A steady stream of technology driven innovations necessitated by changing customer preferences are transforming the banking landscape, so SBI is continuously training its employees to keep them updated about the latest technology, to enables them to deliver new-age banking for an aspiring and transforming India.
YONO (You Only Need One) is considered as one of the most ambitious, path-breaking, secure digital State Bank of India offerings. Launched in November 2017, YONO will soon be enhanced to serve SBI’s commercial clients so that corporates will experience this concept of ‘Ease of Doing Business’ at its best with SBI.
The bank is committed to contributing to society at large and SBI will continue to serve as a trusted partner to all its clients by responsibly providing financial services that enable growth and economic progress for all income groups.