Indian consumers are going digital, social and mobile: Chanda Kochhar

Speaking at the Economic Times CEO roundtable, Chanda Kochhar, MD & CEO, ICICI Bank and Zarin Daruwala, MD & CEO, Standard Chartered Bank, says change is the only constant and Indian business modeks are constantly evolving. Edited excerpts:-

ET Now: How mobile business is transforming banking and how is it making things easier for you and for your customers as well?
Chanda Kochhar: If we look at India and the Indian demographics and the Indian consumer, I think the Indian consumer is going digital, social and mobile. They want everything in a digital format, everything available on the go and we socially connected.

Every business has to re-think their own business model and say does it meet this DSM test and do their products and services meet the test of being digital, social and mobile? I think the banks are doing the same. They are converting each one of their product, each one of their service, each one of their delivery channels to meet this test and requirement of the consumer.

It is not just what is happening in the banks but it is actually what is happening across the payments value chain per se which is digitising and making the entire payment mobile.

If you look at for our bank, more than 60% of the transactions are now done only on mobile and internet. It is no longer electronic channels but it is just these two digital channels that see more than 60% of the transactions. In fact at the branches, it is now less than 5% or 6%. So that is the change that is happening.
Also, it is not just about digitising the customer-facing part but also about digitising your own internal operations. What we see is that we actually have digital channels through which the customers interact but we also take the absolute brick channels which is the branch and convert that experience into a more digitised experience.

One thing I would say about the Indian consumer is that as much change and as much technology, innovation that you offer to the Indian consumer, the Indian consumer is very receptive and actually keep expecting more and we have had that great experience.

ET Now: So the Indian consumer finds it far more easier to do banking on the net now than probably five, six, seven years ago and a lot more technological changes will happen. But tell me as a banker and as a bank what are the things that have changed or yet to change when it comes to regulations? Is there anything that you would wish to tell the RBI governor about or the finance ministry about what things should change?
Chanda Kochhar: As far as the banking industry is concerned, and I am sure it must be true for various industries as well is that the only thing that is constant is change. Your business models are changing, the customer demands are changing and the regulations are changing constantly. But in this evolving world, it is about how do you relook at your business models and keep continuously evolving . Business models that are relevant today are not relevant tomorrow and were not in existence yesterday.


ET Now: Changes are only constant and one bank which probably has been at the cutting edge of probably global change, is Standard Chartered. Mr Birla and Mr Kotak talked about the debt burden on India Inc. What is your experience? Hasit improved in the last say year or so? Do you still think that India Inc is too heavily debt burdened and they just cannot go out and invest?
Zarin Daruwala: So I do not think the debt burden has changed and as actually capacity utilisation is still low. If you see the core sector, it is hovering around 70% to 75%. So clearly till we see capacity utilisation going up and the cash flow coming in, I do not think we will see the burden really coming off and frankly unless the indebtedness comes to an acceptable level, we will not see equity interest also coming in from strategic/private equity. So I think one has to first hope for the capacity utilisation to sort of pickup.

ET Now: Hope for change on the ground, demand going up. ..
Zarin Daruwala: In the core sector because the capacity was put up in anticipation of a certain economic growth rate which for whatever reason sort of slowed down in the last two-three years and clearly the capacity is much higher in the core sector.

Having said that I think in the B2C segment, so for example, as a bank if I see the retail growth, that is continuous. For most banks, it is 17% to 18% but on the corporate side, it is a little slow and clearly capex cycle is slow.

ET Now: Project investment is happening?
Zarin Daruwala: Large project investment is …

ET Now: Is India Inc, especially the debt burden components, are more receptive to radical surgery? We had a surgical strike yesterday but it is a different kind of surgery, radical surgery in terms of getting rid of assets.
Zarin Daruwala: Yes we are seeing that. We have seen some big names. Mr Birla has bought one of those stressed assets. So we are seeing some big ones also happening clearly but having said that clearly more should happen.