ICICI Bank has focussed on being a future-ready organisation and has consistently evolved its capabilities to ensure agility and value creation in its businesses. This focus is integral to the Bank’s strategy and underscores the several pioneering initiatives taken by the Bank
In fiscal 2019, the Bank continued to make progress on its strategic objectives even as the year saw significant challenges. The Bank’s businesses focussed on growing the core operating profits in a risk calibrated and granular manner. The Bank implemented a number of initiatives to expand its customer base and deepen the penetration of products and services, thus further strengthening the franchise. The digital strategy was key to driving the Bank’s reach and unlocking potential in its businesses. ICICI Bank completed 20 years of its digital banking journey in fiscal 2019, and aims to remain at the forefront in re-imagining banking through technology, digitisation and innovation.
The objective of the Bank is to develop products and services that create value for customers. Technology and digitisation play an integral part in meeting this objective. The Bank focuses on providing high levels of functionality and investing in technologies to provide a secure, superior, seamless and uniform service experience to customers across all channels.
The retail business was a key driver of growth for the Bank in fiscal 2019. The retail loan portfolio grew by 21.7% year-on-year at March 31, 2019 to ` 3,528.31 billion. The retail loan portfolio as a proportion of the total loan portfolio increased from 56.6% at March 31, 2018 to 60.1% at March 31, 2019. Including non‑fund based outstanding, the proportion of retail loans was 46.9% at March 31, 2019. Total savings deposits grew by 13.3% to ` 2,276.71 billion at March 31, 2019. The Bank continued to see strong growth in its retail term deposits and maintained a robust funding profile.
The Bank’s strategy is focussed on leveraging its branch network, digital channels, partnerships and presence in various ecosystems to expand its customer base. The Bank seeks to offer a comprehensive suite of products and services to customers. These include savings, investment, credit and protection products based on customer needs, along with convenient payment and transaction banking services. Cross-selling appropriate products to existing customers based on analytics is a key element of the Bank’s strategy. The Bank seeks to adopt a 'Fair to Customer, Fair to Bank' approach across its business.
Digital initiatives have played a key role in driving growth and efficiency in the retail business. These initiatives have improved the efficiency of branches. The Bank is now able to serve more customers at its existing branches and has enabled employees to perform more value-added activities. The Bank periodically reviews branches based on customer footfalls and economic activities to ensure optimal distribution of the branch network. The Bank added 431 insta-banking kiosks during fiscal 2019 taking the total count to 1,167 at March 31, 2019.
* ICICI Merchant Services Pvt. Ltd.
The Bank’s mobile application, iMobile, is a key channel of service. It was revamped in fiscal 2019 to add an array of design-thinking led services along with intuitive widgets. These services include India’s first software robotics algorithm-led investment advisory application on mobile, ‘Money Coach’, which manages the entire investment journey of a customer. The Bank has also introduced a first-of-its-kind paperless KYC and online registration process for mutual funds at a single click and seamless peer-to-peer fund transfer to registered payees using voice commands enabled by Apple’s virtual voice assistant, ‘Siri’. Another feature that was added is an intuitive interface called ‘Discover’ which enables customers to track personal spends and deliverables. Other features on iMobile include setting card limits, checking account balances, getting instant digital credit up to ` 20,000 and saving frequently made transactions as ‘Favourites’. As a security feature, the app allows customers to manage their credit card limits and block/unblock cards as needed. iMobile now offers more than 250 services which are available across all mobile platforms.
The Bank recognises the need to be relevant in its product and service offerings to meet customer expectations. Data analytics, artificial intelligence and machine learning are providing significant opportunities for making this possible. ICICI Bank leverages these technological capabilities to design products that meet specific customer needs. One such need was accessible and affordable credit which the Bank is addressing through its instant lending options. Customers are offered the facility of availing personal loans, business loans, home loans including top-up and auto loans entirely on the digital platform. The Bank has digitised the process end‑to‑end enabling instant disbursement to pre-approved customers. The Bank implemented various initiatives to increase the contribution of digital channels in its offering of unsecured products.
With a focus on convenience and value creation, a number of products and services relevant to customers were launched during the year. FD Xtra is a bouquet of fixed/recurring deposit products offering additional benefits like monthly income, life insurance cover, systematic investments and credit card. The Bank’s Seniors Club Savings Account was enhanced during the year with features like doorstep services and a special facility called Quantum Optima for earning higher returns. In another unique offering, the Bank launched the ‘Advantage Woman Aura Savings Account’, an account exclusively for working women in India and ‘The One’, a premium savings account for salaried and self-employed professionals in the age group of 35-50 years. These products offer a bouquet of benefits to meet the life-stage needs of the customers. Other convenience products include digital issuance and reload of travel cards and a digital e-gift card called 'Expressions'.
The Bank believes there are significant opportunities to grow the personal loans and credit card portfolio by mining the existing customer base for cross‑sell and partnerships with technology companies. Partnerships with platforms with large customer bases and transaction volumes offer unique opportunities for growth and enhancing service delivery and customer experience. The Bank entered into partnerships with Amazon and MakeMyTrip for issuing co-branded credit cards during fiscal 2019.
The Bank believes that a key driver of India’s growth is the rural economy which has distinct financial needs. The Bank’s rural banking operation caters to the complete financial requirements of customers in rural and semi‑urban locations, primarily engaged in agriculture and agro-related value chain activities. The Bank’s reach in rural areas is supported by a network of branches, on-field staff and business correspondents providing last-mile access in remote areas. Of the Bank’s network of 4,874 branches, 50.1% were in rural and semi-urban areas with 556 branches in villages that were previously unbanked. The Bank had over 5,000 customer service points enabled through the business correspondent network at March 31, 2019.
The Bank has adopted a societal approach in meeting the financial needs of its rural customers and offers a bouquet of services and products covering the end-to-end requirements of rural customers.
The segments include farmers, rural salaried customers, commodity traders, seed and farm input dealers and processors. The key focus for the business is to build banking habits and to help in creating wealth for rural customers. Apart from direct lending to customers, the Bank also engages with Micro Finance Institutions (MFIs) as a crucial delivery channel for reaching out to the otherwise under-served population and for enabling financial inclusion. The Bank provides financial assistance in the form of term loans to MFIs. These funds are then further extended to individuals and members of Self Help Groups/Joint Liability Groups.
Digitisation underpins the Bank's efforts in rural banking in a big way and has helped in decongesting processes and empowering teams to increase efficiencies in the delivery of services to rural customers. A unique mobile application called ‘Mera iMobile’ was launched in fiscal 2017. It allows rural customers to avail more than 135 services including non-banking information and agri-related advisory on crop prices, news and weather. The app is available in 11 languages and is used by more than half a million customers. Till March 31, 2019, the app had processed a total of 24.1 million financial and non-financial transactions.
The Bank’s efforts in the rural areas are also meeting the larger goals of women empowerment and development. Some key initiatives in this direction include the support given to Self Help Groups that promote entrepreneurship among women and development of solutions for dairy farmers.
Small and medium enterprises (SMEs) require a comprehensive relationship approach depending on various factors including size, supply chain linkages and leverage capability. The Bank has been providing tailored products and services for enabling wide‑ranging support and has been partnering SMEs for their business growth.
During fiscal 2019, several digital products were launched for SMEs to meet their business and transaction banking requirements and add better operational efficiencies. The current account opening process has been digitised with a seamless account opening experience at the client's premises. Instant digitally processed overdraft facility of up to ` 1.5 million is available to the SMEs. Additionally, the Bank launched business loans based on Goods and Services Tax returns. The transaction banking experience has been digitised with enhancements in the digital trade platform ‘Trade Online’ and ‘Corporate Internet Banking’ enabling general banking transactions and export-import transactions online without visiting the branch. The mobile application, Eazypay, a digital POS for merchants, facilitates business of SMEs. Further, the Bank is focussing on harnessing available digital data and scaling-up digital lending to SMEs.
The Bank follows strong risk management practices in managing its SME portfolio to enhance the portfolio quality by reducing concentration risk and to focus on granular and collateralised-lending based growth. With a view to increasing the risk adjusted operating profit from the portfolio, reliance is also placed on harnessing opportunities across transaction banking, foreign exchange and personal banking solutions with the SMEs.
The Bank endeavours to support the ambitions of SMEs by providing innovative platforms and solutions, that go beyond banking and finance and nurture the SME ecosystem in the country. The ‘Beyond Banking’ platform is a strategic tool that focuses on a slew of initiatives and forums to give the SME community exposure to sectoral insights, global best practices, business expansion opportunities and media recognition. The digital platform 'SME Empower’ is an online Business to Business (B2B) marketplace that enables SMEs to buy and sell products online. ‘SME Toolkit’ is an online knowledge resource centre for SMEs.
Meeting the needs of Indian corporates has been a long-standing business focus for the Bank. This is provided through solutions for credit-related needs like working capital and term loans, transaction banking solutions and market-related solutions like foreign exchange and derivatives.
Following the significant challenges faced by the Bank in its corporate portfolio, the Bank put in place specific measures with a focus on lending to higher‑rated, well‑established corporates, enhancing the quality of the existing corporate portfolio and reducing concentration risk. The Bank made significant progress towards these objectives. The Bank continues to focus on financing opportunities in the corporate sector based on appropriate risk assessment and pricing.
In fiscal 2019, the Wholesale Banking Team underwent a reorganisation with an objective to create flexibility and enable the Bank to capture all opportunities arising from existing customers’ ecosystem. A better focus on the services sector has been enabled through a dedicated team. Further, a new Portfolio Management Group has been set up to assist in construction and management of the wholesale banking portfolio based on a desired matrix of risks and returns.
The Bank is focussing on meeting the transaction banking needs of corporate clients, including foreign exchange and derivatives, trade finance and payments, and collections. In fiscal 2019, the Bank actively engaged with a consortium of 10 banks for harnessing the Blockchain Distributed Ledger Technology platform in a bid to help digitise inland trade within the country. The Bank also made domestic letter of credit issuance and advising modules available to corporates for handling their inland trade requirements. Around 250 corporates have signed up on the blockchain platform for domestic and international trade finance. In fiscal 2019, the Bank launched a digital payment solution, ‘e-DOCS’, on its Trade Online platform. This application leverages information available on Export Data Processing and Monitoring System (EDPMS) portal and aids clients in managing their entire export banking life cycle digitally. In another digital initiative for corporate customers, in fiscal 2019, the Bank provided a digital financial supply chain platform with integrated payment solutions that helps in streamlining delivery systems across the entire value chain of corporates. Further to its initiatives in creating industry ecosystems, the Bank has partnered with Tea Board in implementing an online payment solution for buyers and helping other industry stakeholders including brokers, sellers and warehouses in managing their funds flow through automated settlement processes and customised Management Information System (MIS) reports.
ICICI Bank’s international footprint consists of branches in the United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Dubai International Finance Centre, South Africa, China, Offshore Banking Unit (OBU) and IFSC (International Financial Services Centre) Banking Unit (IBU) and representative offices in the United Arab Emirates, Bangladesh, Malaysia and Indonesia. The Bank also has wholly-owned subsidiaries in the United Kingdom and Canada with branches across both countries. ICICI Bank UK also has an offshore branch in Germany.
The Bank is repositioning its international franchise to focus on deposits and remittances from non-resident Indians. The Bank is also focussed on deepening its relationships with Indian corporates in international markets for maximising the India-linked trade, transaction banking and lending opportunities, as well as select risk-calibrated local opportunities.
The Bank has been playing a pioneering role in promoting digital initiatives in the international banking arena. The Bank has been continuously introducing and innovating products to enhance customer experience. In the remittances space, the Bank introduced various initiatives like loyalty programme for Money2India offered for customers in America, customer-get-customer based referral programme, 'Block-your-rate' functionality on Money2World and 'Request money' option whereby ICICI Bank beneficiaries can request remitters to send money via Money2India. The Bank also enabled blockchainbased processing for outward remittances from India to Canada, a first-of-its-kind in the industry. The Bank aims to replicate the same across other overseas locations.
The Bank’s customers include government institutions, both central and states and local bodies. The Bank aims to facilitate the efforts of these institutions by providing integrated collections and payment solutions, IT solutions, participating in pilot projects and strengthening their efforts in enhancing e-governance. This also results in deposit balances for the Bank.
Enhancing customer service
Customer service is an important pillar of banking and the Bank makes continuous efforts towards improving customer experience and operational efficiency. A rapidly changing economic and technological landscape has created new dimensions in customer expectations from banks. Speed and convenience are two key drivers in meeting these expectations. To keep up with evolving customer expectations, the Bank is increasing its focus on customer delight and advocacy. This is being measured through the Net Promoter Score, Transaction Experience and Customer Satisfaction metrics.
The Bank follows a 4D framework to map the entire customer journey across products, processes and channels.
Some key initiatives taken during fiscal 2019 under the 4D framework include:
The Bank believes and treats its customers fairly and seeks to provide transparency in its product and service offerings. The Bank makes continuous efforts to educate its customers to enable them to make informed choices regarding banking products and services. The Bank also ensures that the products offered are based on an assessment of the customer’s financial needs.
The Bank has a well-defined grievance redressal mechanism with clear turnaround time for providing resolution to customers. All complaints received by the Bank get recorded in a Customer Relationship Management (CRM) system and tracked for end‑to‑end resolution. The Bank also has an escalation matrix built in the CRM system to ensure that customer requirements are appropriately addressed within the stipulated timelines. Further, as recommended by RBI, the Bank has appointed a senior retired banker as the Internal Ombudsman of the Bank. The Customer Service Committee of the Board, the Standing Committee on Customer Service (Customer Service Council) and the Branch Level Customer Service Committees monitor customer service at different levels.
The number of customer complaints of the Bank (excluding cash discrepancy at non-ICICI Bank ATMs) reduced by 27.8% in fiscal 2019 as compared to fiscal 2018.
Technology at the core
The Information Technology (IT) Strategy adopted by the Bank is to provide an integrated, resilient and responsive technology environment that enables it to achieve its business goals of risk calibrated granular growth, cost-effectiveness and a superior customer experience in a secure and compliant manner. In line with this strategy, the Bank has adopted the theme of Run, Transform and Re-Imagine for its digital and technology initiatives to remain at the forefront of transformation in the Indian banking industry.
Run – Focus on running systems in a reliable and secure manner and at the same time making incremental changes to bring in process efficiencies.
Transform – Involve product and process innovation to become ‘Digital to the Core’ and adopt novel ways of business operations leveraging technology.
Re-Imagine – Delivering business services and servicing customer needs in a dramatically different way.
The Bank has a Board-level Information Technology Strategy Committee, which approves the strategy and policies for information technology and ensures that the IT strategy is aligned with the Bank’s business strategy.
The Bank has a well-structured process for innovation which is overseen by the Innovation Steering Committee. Key stakeholders include business heads, product heads and representatives of the human resources function. The Committee meets regularly to provide strategic guidance and direction on new initiatives for effective implementation.
The Bank has a dedicated Business Intelligence and Analytics team that works across business areas on projects relating to business analytics, decision strategies, forecasting models, machine learning, rule engines and performance monitoring. The Bank maintains a comprehensive enterprise-wide data warehouse and employs best-in-class statistical and modelling tools for leading edge analytics.
of industry share making the Bank a leader in Immediate Payment Service (IMPS) transactions
First bank in India to issue more than one million RFID tags (FASTags)
Savings Account transactions are done through digital channels
The Bank's AI-powered chatbot resolved over 13 million customer queries in fiscal 2019. iPal has a smart channelling feature where the customer is redirected to a live chat agent when the bot is unable to resolve the query.
In driving an innovation and start-up mindset, the Bank has set up a start-up investment and partnerships team to collaborate with and invest in fintech startups and co‑develop products aligned with the ICICI Group’s digital roadmap. The engagements with startups are focussed on digital lending, revenue growth, digital platforms and improving process efficiency. The Bank has set aside a corpus for investing in fintech startups. Till March 31, 2019, the Bank had made investments in five start-ups.
While the Bank is focussed on growing its own digital channels, it is also creating an ecosystem through partnerships which cover all broad segments of customer and merchant payments. The Bank is offering a host of APIs (Application Programming Interfaces) and SDKs (software developer kits) which facilitate third party apps to offer payment solutions for their retail customers.
The Bank has pioneered the adoption of software robotics, with more than 1,000 software robotic processes deployed that are handling 20% of the transactions, thus augmenting operational efficiency, higher accuracy and reduction in processing time for customer services.
Rapid digitisation of business, increasing transaction intensity and connectivity to networks and ecosystems have made cyber security increasingly important. The Bank needs to be prepared for cyber risk as we become more digital and maintain open and flexible platforms to encourage partnerships and innovation. At ICICI Bank, the triad of Confidentiality, Integrity and Availability (CIA) are at the heart of its comprehensive information security framework. With a 360-degree approach to cyber security, the Bank believes that this is a continuous journey in line with rapidly evolving digital technologies and developments in the external risk landscape. The approach covers all aspects of prevention, detection and response. The Bank also lays emphasis on customer elements like protection from phishing, adaptive authentication, awareness initiatives and protection and risk configuration ability in the hands of the customers. In fiscal 2019, a unique feature introduced in the Bank’s mobile application, iMobile, wherein a customer can view card-related parameters and modify them based on one's requirements. These parameters include changing the card limit, temporarily blocking the card or selectively blocking the card for ATM or internet transactions. The Bank also ran an intensive campaign across different channels of the media to create customer awareness on these features. The Bank views cyber threats as a very important risk and they form part of the enterprise risk management framework. The Board level IT Strategy Committee oversees the information and cyber security related threat landscape and the Bank’s preparedness to address these from a prevention and response perspective. Clear policies have also been put in place with regard to cyber security and information security which are reviewed by the senior management on a periodic basis.
The Bank also conducts and participates in cyber security drills to continuously fine tune its response mechanisms. The Bank also runs multiple awareness and internal simulation exercises to ensure high levels of employee awareness on information security.
Risk calibrated growth
The Bank is committed to ensuring long-term risk calibrated growth based on its strategic objectives. The Bank’s performance in fiscal 2019 was aligned to its focus on pursuing this strategy based on opportunities and its risk appetite. The Bank’s core operating profits (i.e. operating profits excluding treasury income) grew by 16.5% in fiscal 2019, led by broad-based growth in domestic businesses. The growth was supported by strong risk management practices leading to further reduction in concentration and improvement in the rating composition of the portfolio. The Bank’s rating mix of disbursements has changed significantly. Over 90% of the disbursements in fiscal 2019 in the domestic and international portfolio were to corporates rated A- and above.
CONCENTRATION RISK MANAGEMENT
PORTFOLIO RATING MIX
|RATING CATEGORY1,2||MARCH 31,
|AA- and above||37.2%||42.4%||45.1%|
|A+, A, A-||19.0%||20.1%||22.0%|
|A- and above||56.2%||62.5%||67.1%|
|BBB+, BBB, BBB-||28.7%||27.5%||28.2%|
|BB and below3||14.6%||9.4%||4.5%|
|Total net advances (` billion)||4,642.32||5,123.95||5,866.47|
Key product launches during fiscal 2019
In fiscal 2019, ICICI Bank extended its range of instant products by introducing a slew of offerings across segments. They are:
Insta Home Loan
This facility enables lakhs of pre-approved salaried customers of the Bank to avail final sanction letter digitally and instantly for loans up to ₹ 10 million for a tenure of up to 30 years using the Bank’s internet banking facility.
This instant digital credit facility enables pre-approved customers to buy small ticket items immediately in a completely digital and paperless manner through their mobile phones. An invite-only facility, PayLater also allows eligible customers to avail instant credit up to ` 20,000.
Insta Top Up on Home Loan
Through this first-of-its-kind initiative, the Bank helps its existing home loan customers to get instant top-up of up to ` 2 million for a tenure of up to 10 years.
Insta Top Up on Travel Cards
Through this facility, customers can reload foreign currency to ‘ICICI Bank Travel Card’ instantly. They can also reload the travel cards of their close relatives including their parents, children or spouse after linking them to his/ her savings account.
Insta Auto Loan
The Bank provides its pre-approved customers with a facility to avail the final sanction letter of a car loan instantly and digitally upto ` 2 million for a tenure of up to seven years. This facility offers loan for 100% of the on‑road price of the vehicle.
Expressions Gift Card
This card allows customers of the Bank to create their own e-gift card and send it on WhatsApp, SMS or email to anyone including non-ICICI Bank customers in an instant and seamless manner. Customers can load any amount ranging from ` 500 - ` 9,500 onto their ‘Expressions Gift Card’ through iMobile, the Bank’s mobile banking application, and internet banking.
Insta Two-Wheeler Loan
The Bank offers a facility to millions of its pre-approved customers to avail instant sanctions of loans up to ` 0.2 million for a tenure of up to three years for buying a two wheeler. Like the Insta Auto Loan, this loan also covers 100% of the on-road price of the two-wheeler.
Advantage Woman Aura Savings Account
This is the first ever account exclusively for working women in India that offers a host of benefits across categories like banking, lifestyle, convenience, investment & tax planning, child education and protection.
This is a premium savings account for upwardly-mobile salaried and self-employed professionals. This account offers a slew of benefits for meeting the long-term financial needs of the customers and their families, namely asset creation, wealth management, life-protection and investment.
First-of-its-kind digital application to open
ICICI Bank launched a first-of-its-kind digital application facility on smartphones and tablets enabling bank officials to open current accounts of self-employed individuals and businesses in just a few hours.
In fiscal 2019, ICICI Bank introduced a range of credit cards that offer best-in-the-industry rewards and benefits for customers. They are:
Emeralde Credit Card
This card for our premium customers has been curated with experiences and features across travel, wellness and lifestyle for senior professionals and self-employed entrepreneurs.
Amazon Pay ICICI Bank Credit Card
Launched in partnership with ‘Amazon Pay’, the online payment platform of the global e-commerce company Amazon, this is the first card in the country to enable Amazon Prime members to earn 5% reward points on shopping on www.amazon.in. Each reward point is equivalent to a rupee which customers can redeem on www.amazon.in from a catalogue of more than 160 million items available on the website or by paying merchants who accept Amazon Pay. The reward points are uncapped and do not expire.
Manchester United Credit Card
ICICI Bank entered into a multi-year partnership with Manchester United, the iconic English Premier League football club, to introduce a range of competitive co‑branded credit cards. The Bank also launched co-branded debit cards in association with Manchester United.
MakeMyTrip ICICI Bank Credit Card
In partnership with MakeMyTrip, an online travel company, the Bank launched two co‑branded credit cards that are tailor made to suit the aspirations of travel enthusiasts in the country. Through these cards, customers can accumulate unlimited reward points and redeem them across their travel bookings and various partner merchants on the travel portal.
Trade Online Platform
ICICI Bank revamped its Trade Online platform by introducing an array of new digital services which enable large, medium and small sized corporates, as well as MSMEs, to undertake almost all their export-import transactions online. Additionally, ‘Trade Online’ is the first digital banking platform to offer quick and convenient credit of inward remittances within minutes.
GST Business Loan
ICICI Bank launched ‘GST Business Loan’, a new working capital facility that enables MSMEs to get overdraft based on the turnover reported in their Goods and Services Tax (GST) returns. The facility is available to any MSME including non‑customers of ICICI Bank for loans upto ` 10 million.
ICICI Bank added an array of industry-first features to ‘Eazypay’, the country’s first digital Point-of-Sale (PoS) application. The all new Eazypay offers a host of services with many industry-first features including instant and paperless application for card-swipe machine and bar code scanning for instant invoicing.
Digital Financial Supply Chain for
Digital Financial Supply Chain (DFSC) platform is a real-time digital platform that extends functionalities of ERP across dealers and suppliers and provides integrated payments and channel financing to corporates.
First Bank in India to go live on Swift gpi
ICICI Bank became the first bank in India to go live on SWIFT global payments innovation (SWIFT gpi) platform to facilitate faster cross-border payments by significantly improving transparency and efficiency for all category of remitters. The service enables real-time payments tracking across correspondent banks.
Online payment solution for Indian
students studying in Australia
ICICI Bank partnered with ‘Westpac Banking Corporation’ (Westpac), one of the top banks in Australia, to offer Indian students a completely online payment solution through its ‘Money2World’ platform for outward remittances. With this, Indian residents, who are customers of any bank in India, can initiate an online remittance to make fee payments to an Australian university at a fixed exchange rate from the comfort of their homes anytime.
Better money transfer options for NRIs
ICICI Bank became the first Bank in the country to allow NRIs to remit money to India through social media, including WhatsApp and by email, through Money2India.
The Bank launched FD Xtra, an innovative range of fixed and recurring deposits, specially designed to meet life-stage needs and goals of customers such as term-insurance, saving for down-payment of home and car, retirement planning, child education and fulfilling travel aspirations among others.