SBI fighting for deposits through 'service quality', says C S Setty

C S Setty, new chairman of State Bank of India (SBI), on Thursday said competition with other banks for deposits would not be on interest rates but the focus would be on leveraging the branch network.

The differentiating factor will be quality of service and this is what the bank is going to reinforce.

The lender will try to understand the pain points of customers such as staff shortage. The bank has a feedback mechanism across channels to understand customer satisfaction, Setty told Business Standard.

He took charge as chairman on Wednesday, succeeding Dinesh Khara, who demitted office after completing an extended term.

Setty said “the shift we are seeing is that banks are not aggressively increasing the rate of interest on long-term deposits. They are working on one- to two-year deposits so that the money is not locked up in long-term buckets at higher rates. Everybody is launching special schemes of 300-400 days. Interest rates are not likely to go up significantly”.

SBI had 22,580 branches at the end of June.

Banks, including SBI, are focusing on retail deposits, preferably low-cost money like current accounts and savings accounts (Casa). But, Casa is difficult to come by and all are pursuing retail term deposits.

SBI saw the share of Casa in its domestic deposits declining from 42.88 per cent in June 2023 to 40.70 per cent in June 2024.

Outstanding domestic deposits stood at Rs 47.03 trillion in June.

Referring to the customer interface, he said the biggest feedback was not just customers’ giving three stars or four stars but somebody complaining about services. This will help to improve processes and sometimes products also. Such feedback is helping to prepare branch-level profiles as to how it is performing and ranking them (into the platinum, gold and silver categories).

Customer expectations keep changing. They are shaped not by the industry but their experience with other e-commerce platforms. Banks will have to constantly re-imagine and the push will be on customer service since after some time products, interest rates and technology will become commoditised, the new chairman said.

Another focus will be on uniform experience across channels -- the omni channel experience. For example, if a customer starts a journey (of transactions) in a branch, can the person continue that on internet banking? This is technology-heavy activity where banks will have to re-imagine coding and journeys. The omni-channel experience is the driving aspect of YONO 2.0 (You Only Need One) 2.0), a revamped version of digital banking. 

The revamped version will be tested in November in a closed user group consisting of 100,000 volunteers sourced from the staff and customers for the beta version, he said.

Meanwhile, Khara, speaking at the Global Fintech Fest (GFF) 2024, said YONO had 80 million registered users today. Almost 10 million users login each day. Initially YONO was envisaged only as a retail solution to replace internet banking. But today it serves all banking and financial needs. Last year YONO generated loans worth Rs 1.7 billion.

SBI is working on YONO 2.0, where it would be made more modular and faster in terms of processing, the former SBI chairman said.