How Yes Bank plans to increase its mobile user base

Last year, Yes Bank Ltd realized that managing one million customers across India wasn’t an easy task, especially when pursuing a goal of increasing its mobile banking user base to five million in five years.

Moreover, India’s fifth-largest private sector bank, with 630 branches across 375 cities, couldn’t ignore the customer shift to mobile banking while planning its strategies to enhance customer experience across branches. Hence, as part of its “DIGICAL-Digital + Physical” strategy—the blending of both offline and online channels leveraging innovation and technology—it began looking for a digital partner to build a scalable platform to host multiple applications.

One of its demands, though, was that the solution shouldn’t be driven by a single vendor, but offer it the flexibility to use the services of multiple partners.

Yes Bank eventually chose International Business Machines Corp.’s (IBM’s) MobileFirst Platform to offer secure apps to enable seamless migration from high-cost touchpoints, such as transactions conducted in the bank branch, to a more personalized digital banking service.

“As the bank is young and innovative, it wanted to do things differently. It had done an analysis of customer behaviour and was looking for a unique design for the new-age app,” explained Naveen Gupta, executive (Asia-Pacific MobileFirst Business Unit) at IBM. He added that it took over 10-12 months from initial discussions to implementation of the tailor-made solution, which was divided into two parts—design and IT.

This year, Yes Bank implemented the IBM MobileFirst Platform that provided technology support to secure, personalize and integrate data from multiple sources for a better user experience. It also supported the bank’s move into retail banking and the digital payments sector.

With that, Yes Bank has been able to reduce time-to-market for its apps by 60%, which is especially important as it plans to scale the number of banking apps being offered across its retail and commercial banking segments.

“In this highly competitive industry, banks are moving towards more sophisticated mobile strategies, supported by apps that are context sensitive and provide superior levels of customer experience. IBM has deep experience in this space, helping organizations like Yes Bank map out mobile-driven customer journeys and build long-time loyalty,” said Hitesh Shah, director (Software Segment) at IBM India.

Going forward, Yes Bank will not only focus on the mobile banking experience for retail and HNI (high networth) customers, but will also use the IBM platform to launch a digital wallet for its young social media and smartphone users. It plans to introduce apps to support small and medium enterprises, and businesses with a focus on user experience and strong security features.

Research firm Forrester, in association with IBM, recently assessed the Total Economic Impact of IBM’s MobileFirst Platform and found that the latter delivered a 107% return on investment with an eight-month payback period. The key areas of savings included reduced integration effort, lowered application maintenance and upgrade effort, and a 39% decrease in total app deployment cycle times.

The IBM MobileFirst Platform typically can be used to build and deploy mobile apps, or integrate apps built with the help of third-party tools. It is optimized for native, HTML5 (hypertext markup language) and hybrid development, or any combination of these approaches.

Ritesh Pai, senior president and country head (Digital Banking) at Yes Bank, said the partnership with IBM “is a pivotal development in designing Intelligent Middleware, CRM (customer relationship management) and mobile enterprise applications to boost customer experience, provide deeper engagement, and significantly reduce the time and cost of service”. He said his company is targeting “a 500% increase in our mobile banking user base in the next 18 months using the mobility platform”.

Some financial institutions that have adopted the IBM MobileFirst Platform include HDFC Securities Ltd, RBL Bank Ltd (formerly Ratnakar Bank Ltd) and ING Vysya Bank (now part of Kotak Mahindra Bank Ltd). HDFC Securities is using the platform to help clients securely trade stocks, track and manage portfolios and market movements, as well as analyse industry research and trends. RBL Bank is catering to millennials’ mobile and social lifestyles with new apps to support financial planning, expense calculation, and financial portfolio management.

To be sure, ICICI Bank Ltd topped the bank-wise mobile banking transactions for July 2015 with 5.3 million transactions valued at Rs.6,885.37 crore, while HDFC Bank Ltd came second with 2.1 million transactions valued at Rs.6,461.24 crore.

Gartner Inc.’s research director Sandy Shen expects “to see strong adoption of mobile platforms by BFSI (banking, financial services and insurance) players in the next five years due to the strong demand for mobile apps for both B2C (business to consumer) and B2B (business to business) employee apps”.

“Not sure if we can claim IBM’s MobileFirst Platform is cost- and time-efficient. It depends on your existing application platform, back-end systems and in-house development skills. Due to the comprehensiveness of the tool, it usually requires quite some training and learning of the development team to master the toolset. Also, custom integration is often required,” she added

According to Shen, the prime considerations for a bank before adopting a mobile platform should be: In-house IT skills—whether the team can use the tool to develop the mobile app, and how much effort is needed; ease of integration with the back-end system; and the ability to manage and control the apps to ensure security.