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The real competition is the huge unbanked population: Anil Ramachandran, CMO, IndusInd

The new generation bank says competition becomes relevant when 95 per cent of the population is banked. It is relying on rural banking, credit card and consumer financing for its next phase of growth and is also eyeing millennials through digital and phone apps

Anil Ramachandran

Instead of competing for customers in the already cluttered urban market, IndusInd Bank, one of the new generation private sector banks in the country, is focusing on India's 19 per cent unbanked population for growth.

“With the amount of the unbanked population in India, the real competitor is the unbanked population and there is significant opportunity for growth by bringing formal banking services to them and in converting them into a banked population," Anil Ramachandran, Chief Marketing Officer, IndusInd Bank told BestMediaInfo.com.

According to its three year-planning cycle, the bank wants to double its business in terms of clients, loans and profits by 2020 and aims to get at least 10% of its total profits from rural banking, the area where a huge population is yet to be covered under financial inclusion.

Ramachandran said the headroom for growth for the formal financial institutes is huge. Speaking about competition, he said, "There are not as many players to compete as much is there is headroom for growth. When we have about 95 per cent population as banked population, then competition becomes relevant. Here, everyone can grow without eating into each other’s pie.”

The bank is also relying heavily on the credit card category, consumer financing business and non-vehicle financing segments for growth.

Mentioning the scope of growth in credit card alone, Ramachandran said there are only 28 million people who hold a credit card, among the 1.3 billion Indian population.

He added, “It must be good to say that I have the maximum number of credit/debit cards in the country, but it is irrelevant since many people don’t have access to a formal banking system.”

On March-end 2017, the private sector bank had a client base of over 95 lakh, outstanding loans aggregating ₹1,13,081 crore, and recorded full-year (FY17) net profit of ₹2,868 crore. Even though the bank was established in 1994, it was in 2008 when the bank started its upward journey. From hundred branches in 2008, today it has over 1,200 branches and more than 2,000 ATMs.

“In this journey, we followed a certain route of bringing in new innovations for consumers ,which simplify their lives and make banking easy. We have been at the forefront of digital. For us, digitisation is not restricted to an app or a website, it means making our internal processes digital and removing paper work,” he said.

The bank believes that getting the millennials as consumers is at the heart of its growth plan. However, with competition from payment banks such as Paytm and new age banks such as Kotak Mahindra and Yes Bank, gaining growth in this category isn't going to be easy.

Realising the challenge, IndusInd has increased its spend on digital marketing significantly in the last few years. Ramachandran said, “The role of digital is increasing very significantly for us. We are deeply invested in digital marketing too. It is the most sophisticated way. You are able to measure the outcomes clearly. From the total marketing spends, the share that we spend on digital is increasing significantly, while print, TV and outdoor is stagnant in terms of percentages, but growing at an absolute level. We depend heavily on analytics and most of our campaigns are driven using insights from crunching of such data. This enables to target better and arrive at market outcomes most effectively."

The brand had created a digital game in support of the blind cricket team of India. The highly regulated category of banking has its own set of marketing challenges too. Ramachandran named ‘commoditisation’ of the sector as the major one. “It becomes difficult to find a story to tell and to differentiate.”

IndusInd had recently invested significantly in sponsoring the Paralympics. The bank also has a large initiative in sports internally. About not sponsoring big events such as IPL and Pro Kabaddi League, Ramachandran said, “We are not really looking at these at the moment. There’s a lot of money chasing these events already and as an organisation, we would like to invest in sports where we can make a significant difference to a person's life or to the game itself. That is our strategy and we will support where support is really required.”

It also released a campaign ‘Jeet Ka Halla’ for the para-athletes sponsorships. It also carries out these initiatives for the CSR activity, which was mandated by the government in 2014.

While advertising has always been a part of the brand’s journey, it has amplified in last couple of years, Ramachandran added, “It's not just advertising which creates a brand, it is the service, friendliness of the staff, quick turnaround of transactions and simplification of processes through easier means – all of these is creating an impact.”

The company works with RK Swamy BBDO for its creative campaigns. Specifying the importance of creativity for a banking brand, he added, “Creativity is very important in a campaign for banking. While you can use a lot of science in which media to use, psychographics and other things – but ultimately creative itself is very important in any execution.”

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