Public sector banks losing market share to new private banks
18/08/2016 15:10
Primary banks have further increased their share of wallet by 10 per cent, implying that corporates are consolidating towards a two-bank model. Better alignment on pricing leads to nearly 13 per cent more share of wallet for banks is also seen, highlighted the report.
The survey report reveals that corporates are well aware of banks’ digital offerings and are willing to adopt them, but it needs persistence from their relationship managers. A three-fold increase in corporate banking activities on mobile devices over the next five years is projected by some 475 respondents. In terms of corporate banking business, the survey notes that banks with high advocacy had 15 per cent more share of wallet than those with low advocacy.
Further, large public sector banks seem to be setting the pace for financial inclusion. They clearly outperform new private banks in this regards with almost twice the number of business correspondent outlets per bank. The proportion of zero balance Pradhan Mantri Jan Dhan Yojana accounts has significantly reduced with the impact of direct benefits transfer coming through.
The survey reveals that digital transactions have increased by 70 per cent over last year while bank branches have decreased. Moreover, installation of self-service machines has also increased by 70 per cent. However, despite the much talked about digital wave. Banks are still ramping up branch presence aggressively in anticipation of a bionic future. New private banks have actually increased their branch presence by 20 per cent over the last year.
