Partnerships with leading ecommerce players like Flipkart, Amazon and Snapdeal have not yielded the desired results in terms of increase in volume, said SBI Chairman Rajnish Kumar during a recent media interaction.
To bolster its supply chain finance offerings, the country’s largest lender had earlier teamed up with a number of consumer Internet companies like Amazon, Flipkart and cab aggregator Ola.
Through these alliances, SBI has been trying to offer easy working capital to online vendors. However, the tie-ups have failed to add much value to the public sector bank.
Speaking at an event last week, Kumar stated, “Somethings you invest but you don’t get any immediate outcome. We did tie up with Flipkart, Snapdeal and taxi aggregators, but the outcome is not as per our expectations.”
Despite investing in technology integration and innovation across the bank’s offerings, it has not witnessed very high transaction volumes, since many of these ecommerce companies often provide funds to their vendors themselves.
He explained, “Many times, these companies themselves provide finance to their vendors. So the need for bank finance is not much. It is a constant review process for us and if we have to make our product more attractive we will make it.”
Hoping that the numbers will improve in the near future, the State Bank of India Chairman added, “The fact is having invested in the technology, we have not lost hope. I feel that we have the platform and sooner or later we will be able to make use of these platforms.”
SBI YONO: 2.5 Mn Downloads, Over 1 Mn Registrations
To compete with new-age digital lending startups, SBI has continued to develop innovative, tech-enabled products that can enhance access to banking services across the country. Last November, for instance, it announced plans to launch an omni-digital platform called YONO, which stands for ‘You Only Need One’.
As its name suggests, the platform currently serves as a one-stop solution for all of the customer’s needs related to banking and lifestyle products/services. Through the YONO interface, customers can open an SBI bank account digitally, transfer funds as well as avail pre-approved personal loan, all without the need for any paperwork.
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At the time of the launch, Rajnish Kumar said, “The aim is that a customer should be able to avail all the financial services through this channel except depositing or withdrawing cash.
In addition to banking services, YONO offers customers access to lifestyle products and services across 14 categories such as booking and renting cabs, dining, entertainment, medical needs, travel and stay.
Prior to the launch, SBI had already teamed up with more than 60 ecommerce companies for the YONO platform, including Amazon, Uber, Ola, Myntra, Jabong, Shoppers Stop, Cox & Kings, Thomas Cook, Yatra, Airbnb, Swiggy and Byju’s, among others.
The bank is currently in the process of integrating all financial services offerings from SBI and its subsidiaries into the platform.
Commenting on the traction that the YONO platform has received so far, Kumar said recently, “The response for Yono is tremendous. So far, the downloads have exceeded 2.5 Mn and registration have exceeded 1 Mn. We have added general insurance product also. In a few days, mutual fund products will also be available.”
“We are working on whether there can be a YONO application for corporates but it is much more complicated. It will take another year,” he added.
SBI On A Fast Tracks Towards Digitisation
Headquartered in Mumbai, the State Bank of India officially came into existence in 1955 when the RBI acquired a controlling stake in the Imperial Bank of India, which incidentally was the country’s oldest commercial bank. The same year, it was renamed to SBI.
Following its merger with five of its associate banks – State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore as well as the Bharatiya Mahila Bank – in April 2017, SBI emerged as one of the top 50 global banks with more than 278K employees, 420 Mn customers and $510 Bn (INR 33 Lakh Cr) on its balance sheet.
In the last few years, the bank has shifted more towards digitisation, embracing latest technologies like AI and Blockchain to improve its offering. In a bid to promote innovation in the financial services sector, SBI announced the launch of a $30 Mn (INR 200 Crore) ‘IT Innovation Startup Fund’ in June 2016 to support startups in the fintech space.
Later in November of the same year, it joined hands with Punjab National Bank and homegrown cab aggregator Ola to set up mobile ATMs. The move was aimed to help dispense cash during the demonetisation crisis.
In May 2017, SBI sanctioned credit facilities to the tune of $3.1 Mn (INR 20 Cr) to Gurugram-based NBFC Aye Finance for the purposes of on-lending.
A month later, Gurugram-based Hungry Foal, a for-profit social venture raised an undisclosed amount of debt from SBI under the Stand Up India Scheme.
In July, SBI Cards, a joint venture between the State Bank of India and GE Capital, announced plans to release an updated version of its mobile app. As per reports, the move was geared towards allowing contactless payments at POS (point of sale) terminals.
Later in October, it was reported that Reliance Industries Limited (RIL) and SBI were gearing up to launch Jio Payments Bank by December.
Around the same time, it announced plans to launch blockchain-enabled smart contracts and Know Your Customers (KYC) by the end of this year. These applications are part of BankChain pilot projects, a community of 27 banks exploring and building blockchain solutions for banking needs.
Thanks largely to these initiatives, in the months since demonetisation, SBI has witnessed a major jump in digital transactions, which currently account for more than 36% of the bank’s total transaction volume. Compared to that, last year, digital payments stood at around 26%.
Having partnered with a number of ecommerce companies, SBI is aiming to improve customer engagement digitally through its YONO platform, by offering access to all banking, lifestyle and ecommerce products/services under the same roof.
(The development was reported by ET)