A few days back,The Reserve Bank of India removed the ceiling of Rs. 50,000 per customer per day mandated in 2009 under the guidelines on mobile banking. Banks are now free to place per transaction limits based on their own risk perception with the approval of its Board.
India has 700 million+ mobile subscribers, just 240 million individuals with bank accounts, 20 million credit cards, 88,000 bank branches, and 70,000 ATMs. Of the households without a bank account, 42 percent have at least one mobile phone. Mobile banking could be a game changer. Today, India already has 149 million mobile data users, approximately 60 million 3G handsets and a broadband penetration of only one percent. According to Informate Mobile Intelligence, three out of four current GPRS users in the country would like to use 3G services in the future and close to 63 percent of mobile users in the 25-30 age group are “very likely” to use it in near future.
However, just five percent of mobile phone subscribers are registered for the service and of them, a tiny 0.5 percent use it regularly, according to the Business Standard financial daily, quoting industry estimates. It is estimated that 680,000 transactions worth Rs 61 Crore rupees (US$13.55 million) are conducted every month.
In 2010-11, the number of transactions through mobile channels grew 300% to 9.6 million from 2.32 million in 2009-10. The value grew to Rs780 crore in 2010-11 as against Rs190 crore in the previous year.
A study by IMRB and IAMAI suggests that there are only about 2 million users accessing Internet through their mobile phones and other mobile devices on an active basis, which means they use Internet on their Mobile at least once a month. As per the study, 27% mobile phones are Internet ready (127 million mobile subscribers out of 471 million total subscribers) and out of these 127 million subscribers, only 12 million have used Mobile Internet. And this number further reduces down to 2 million or 17% when it comes to active users
Some points to consider:
- Should banks be considering mobile banking as an independent product strategy? Isn’t it far more important to have a digital leg for every Retail product? In fact banks must look at the mobile device as an extension of a bank’s multichannel delivery strategy. The idea is to look at Mobile & Internet in a context far larger than pure Cost reductions, rather see these digital channels as game changers!
- How can banks utilize the value of mobility to reach new customer segments? Given the compelling younger consumer demographic in India, can the Mobile be a significant route to get traction amongst younger consumers.
- Analytics can play an interesting role here to find technology savvy consumers amongst the bank’s consumer franchise! Customers leave behind footprints of data that potentially can be mined to be able to slot customers into distinct segments. Segmenting the bank’s customer base to identify “digital consumers” is important & then bank’s must follow through with a whole range of initiatives that allow these customers to engage differently with the bank.
FMCG companies can use the data produced by Retailers very effectively. Organized Retail is still small in terms of sales contribution for most FMCG’s companies in India. But this will change over time & it would be interesting to see how Retailers & FMCG companies develop their relationships! Western countries have adopted these partnerships, calling them Efficient Consumer Response initiatives (ECR).
It’s amazing; P&G was always the bully till the early 1980’s. It used the enormous consumer data that it obtained through market research to bully retailers! Then retailer’s developed sophisticated Point of sale systems & began to bully P&G right back. Wall mart was of course the gorilla of the pack.
And yet surprisingly, in the mid 1980’s, this adversarial relationship between the two gorillas began to change! Cut to the present & Robert McDonald is the P&G CEO & a man on a mission: to make Procter & Gamble the most technologically enabled business in the world. To get there, the 31-year company veteran and former US Army captain is overseeing the large-scale application of digital technology and advanced analytics across every aspect of P&G’s operations and activities.
Here is what he says: “It would be heretical in this company to say that data are more valuable than a brand, but it’s the data sources that help create the brand and keep it dynamic. So those data sources are incredibly important. Therefore, we go to the extreme to protect whatever consumer data we get. It’s a board-level enterprise risk-management issue for us”
Hearing this from P&G is truly heretical-can data rival Brand equity in the P&G world!I wrote about this earlier. How companies store, transform & use their data will become as potent a marketing tool as Brand equity itself! Companies have huge amounts of data now and there is technology & skill sets available to decode it. If used powerfully enough, data about a customer can transform the customer experience!
Here is another comment from Robert McDonald about P&G’s data partnerships: “For companies like ours that rely on external data partners, getting the data becomes part of the currency for the relationship. When we do joint business planning with retailers, for example, we have a scorecard, and the algorithm is all about value creation. Getting data becomes a big part of the value for us, and it’s a big part of how we work together. We have analytic capabilities that many retailers don’t have, so often we can use the data to help them decide how to merchandise or market their business in a positive way”.
P&G’s Gillette unit, for example, claims to have mined Wal-Mart data to develop promotions that increased sales as much as 19 percent. More than seventeen thousand suppliers are given access to their products’ Wal-Mart performance across metrics that include daily sales, shipments, returns, purchase orders, invoices, claims and forecasts. And these suppliers collectively interrogate Wal-Mart data warehouses to the tune of twenty-one million queries a year.
In India, the first meeting on ECR took place on 10 December, 1999. The attendees included representatives from J&J, Nestle and erstwhile FoodWorld & PwC. But I wonder how this initiative has developed or are we in the stage where FMCG companies are the bullies in the neighbourhood !!
I would love to hear your views about this!