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The increase in online transactions had prompted banks to give customers more options to transact via online platforms such as social media. Now, lenders are taking the digital route a step further and are focusing on digital branches to cater to the more technologically advanced customers.
These digital branches not only convenient for the consumers but are also helpful for the banks.
"We think "smart branches" are the way to go in the future. Smart branches provide tremendous advantages in terms of costs, productivity and efficiency. We are also looking at converting more of our existing branches into the smart branch format and looking at opening new smart branches," explains Pramit Jhaveri, CEO, Citi India.
The saving for the banks are not only in terms of real estate because of the smaller branches but also in terms of manpower, explains A Krishna Kumar, MD & Group Executive-International Banking, State Bank of India.
He added that the referrals from the digital branches can also help in boosting the overall loan growth for the bank.
SBI, which recently opened six digital branches, plans to extend it to 50 in the next one year. "These digital branches will help the bank in improving the overall productivity as the manpower requirement comes down with technology and the staff can be deployed elsewhere thus enhancing productivity," Kumar added.
Banks have been positioning these branches generally in high footfall areas such as malls. Both State Bank of India and Citibank have opened such digital banks in malls.
These branches enable customers to carry on banking transactions via the digital medium-such as interactive walls and table displays-with less human interactions. However, the branches at the moment are not un-manned and have employees to help customers in case the need arises.
ICICI Bank, the country's largest private sector bank, has already taken the number of its branches to 101 in the last one year. The bank says that they have witnessed huge surge in transactions via such branches.
"Transactions at Touch Banking branches have doubled in the last few months to over 2 million. Around a lakh new customers transact at these branches every month and 20% of them use the services after regular banking hours and on Sundays and public holidays," said a ICICI Bank spokesperson.
In fact, ICICI bank plans to take these digital branches even to the smaller towns and cities.
"Customers' aspirations are similar everywhere across the country and we are seeing fast adoption of technology in small cities. In addition to big metro cities, the bank has already opened Touch Banking branches in cities like Rajkot, Vadodara, Vizag, Lucknow, Raipur, Surat, Siliguri and Guwahati, among others," added the bank spokesperson.
