Technology to direct the hub of Yes Banks to retail banking and SMEs
Yes Bank has developed a technology-driven strategy to grow its personal, small and medium-sized business lending business over the next two years. The bank was traditionally a large lender company a few years ago, but things have changed over the past year after the Reserve Bank of India (RBI) appointed a new board of directors and replaced the bank management.
Yes Bank aims to increase its digital sourcing by 10% through payment platforms and partnerships with large aggregators, intermediaries and neo-banks, it said in its financial results. The bank posted a net loss of Rs 3,788 crore in the fourth quarter of FY21.
“Our medium-term objective is to have a 60% portfolio of loans to individuals and SMEs and 40% of a portfolio of companies. Although the corporate ledger has declined slightly, we are looking to develop it selectively, ”said Prashant Kumar, Managing Director and CEO of Yes Bank.
“Over the past 12 months, the bank has strengthened its data and technology infrastructure. We have strengthened our data center. We process over a million UPI (Unified Payments Interface) transactions every month, and now 80% of current savings accounts are opened digitally, ”he said on a media call on Friday.
Technology strategy over the next 12-24 months
To increase its share of the retail and SME lending market, the bank said it:
- Broaden partnerships and investments in the fintech ecosystem
- Take advantage of artificial intelligence and machine learning
- Create a fully scalable digital infrastructure
- Leverage the UPI base to acquire depository clients and retail assets
- Set up a digital lending platform to automate penalties for SME loans
- Loan in Seconds platform for four loan products: personal loans, business loans, auto loans and securities loans
“Retail will grow through digital channels and our own internal channels will continue to make a significant contribution to this. This part has really paid off over the past year, ”said Rajan Pental, Senior Group President and Global Head of Retail Banking, Yes Bank. “As for SMEs, growth seems moderate because there was a decline in the first quarter of this year and due to the moratorium, their activity has paralyzed. But after that, there was a good growth of 10 to 12% in the SME sector, ”he said.
Pental added that from integration to customer service, everything takes place on a digital platform. “Unlike the market practice of sourcing from SMEs through direct sales agents or accountants, a large part of acquisitions are made through the branch network. From a distribution and platform perspective, we are seeing significant movement of SME assets in line with retail assets, ”he said.
Highlights of digital banking
The bank will do it. Due to the increased adoption of technology, the total cost / income of banks has been reduced by 500 basis points over the past year to stand at 89.7% in March 2021. Bank management has said it has introduced technology into many aspects of its business, which has improved the efficiency of the overall cost structure.
- 45% market share of UPI payments in Q4 FY21 vs. 33% in Q4 FY20
- Mobile banking services: 1.85 million users making over Rs 26,672 crore
- Internet banking: 2.1 million users transacting Rs 94,957 crore
- 11.3% of cards were obtained digitally in Q4 Fy21 versus 2.5% in Q4 FY20
- Over 75% of accounts opened in Q4 FY21 were digital under Oui Aim
- 87% of new personal loan requests are scorecard based
- Net loss: Rs 3,788 crore in Q4 FY21 vs Rs 3,668 crore in Q4 FY20
- Net interest income: Rs 987 crore in Q4 FY21 vs Rs 1,274 crore in Q4 FY20
- Cumulative provisions: Rs 26,558 crore in Q4 FY21
- Advances: Rs 1.66 lakh crore in FY21, down 3% yoy
- Deposits: Rs 1.62 lakh crore in FY21, up 55%
- Gross postcode: 15.41% in Q4 FY21 vs. 16.8% in Q4 FY20
- Net postcode: 5.88% in Q4 FY21 vs 5.03% in Q4 FY20