Technology as a Backbone for Successfor Success

ICICI Bank’s Strategy for technology-enabled innovation

November, 2009

An Introduction

2

ICICI Bank today

• India’s second largest bank

• Investment grade international rating

• Global presence - in 18 countries

• Market leader in retail finance

3

• Market leader in retail finance

• Technology leadership in chosen markets

• Strong human capital

• Strong corporate relationships

Our franchise

Life Insurance*

General Insurance*

Asset Management*

Second largest bank in India

4

Private Equity

Investment Banking & Broking

Strong diversified financial services franchise in India

* JV with Prudential and Lombard

Our international franchise

Canada

UAE

Singapore

ChinaUSA

UK

India OBUBahrain

Russia

BangladeshHong Kong

Sri Lanka

Antwerp 1

Indonesia

MalaysiaThailand

5

Branch

Subsidiary

Representative Office

South Africa

� Total assets USD 19 billion; international operatio ns account for 20% of consolidated banking assets

1. Branch of ICICI Bank UK

Indonesia

Increase in no of customers

- 100 200 300 400

FY04

FY06

FY08

Customers (M n)

Exceeding expectations

6

**Only financial transactions*2.2 bn transactions annuallyincluding non financial

And transactions*

-50 100 250 400 550 700 850 1000 1150

FY05

FY07

FY09

Annual transaction volume(mn)

The network

No of ATMS

1,5002,0002,5003,0003,5004,0004,5005,000

Number of branches

0

500

1000

1500

7

5001,000

FY06 FY07 FY08 FY09

0

FY06 FY07 FY08 FY09

Customer touch points have doubled since FY 06

The talent pool

05-06

06-07

07-08

33754

40840

25628

08-09

36335

8

03-04

04-05

13786

18280

25628

The Journey

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� High quality talent pool

The ICICI story: Looking back 15 years

Strengths

What we were

� Risk of NPLs as industry came under stress� Relatively small size and capital base

� Single product project finance company� Nascent technology

Threats

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� High quality talent poolStrengths

� Untapped retail credit market� Mobilising funds from the retail segment

Opportunities

…we identified retail banking as the key growth opportunity

The Beginnings…………

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The Beginnings…………

The building blocks of success

� Spot the opportunity early

� Create the platform to capitalise on it� Capital� People and organisation� Brand� Technology

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� Technology� Speed of execution

� Identify your strengths and leverage them

� Define your weaknesses and fill the gap

The building blocks of success� Plan for scale

� Opportunity should drive capability-building; capabilities should not limit ambitions

� Be a relevant player in your business� Use scale for competitive advantage� Control your business environment

� Continually innovate

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� Continually innovate� No steady state� Shorter business cycles – three years to

obsolescence� Successful organizations don’t respond to change

– they make it happen

The

tran

sfor

mat

iona

l driv

ers

Speed capital

� Strategic agility� Anticipate next business horizon, ahead of

competition� Ability to make calls with insufficient

information� Grab half chances and convert them into

business propositions

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The

tran

sfor

mat

iona

l driv

ers

business propositions

� Institutionalize speed of response� The ‘90 day rule’

� All projects including technology projects with90-day cut off for implementation

� Develop innovative products and services inshrinking time frames

Internal business drivers

Increased competition and compressedBusiness cycles

Increased competition and compressedBusiness cycles

Customer expectationsCustomer expectations Cost challengesCost challenges

The

tran

sfor

mat

iona

l driv

ers

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Need to serve existing customers efficiently

Need to serve existing customers efficiently

Need to acquire new customers at low costNeed to acquire new customers at low cost

…need for a new paradigm

Increased applicationavailability

Increased applicationavailability

Use information as an advantage point

Use information as an advantage pointT

he tr

ansf

orm

atio

nal d

river

s

ICICI’ s innovation network modelTr

ansf

orm

atio

nal d

river

s

16

Tran

sfor

mat

iona

l driv

ers

Our core belief: Tech and business are deeply intertwined

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….And a facilitative org structure

� Designed for change , interoperability and agility

� Technology teams are embedded into business

� Co-creator of business opportunities

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opportunities

� Allow for flexibility and growth in infrastructure

� Allows opportunistic changes in applications

Technology enabling changeExternal drivers compel organizations to leverage the developments in IT and continuously innovate

Regulatory change & consolidation

Competitive

External Drivers Agent Outcome

Product & Service Innovation

Tran

sfor

mat

iona

l driv

ers

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Competitive forces

Changing Consumer

Technological developments

Technology led

Innovation

Service Innovation

Organizational & process Innovation

Tran

sfor

mat

iona

l driv

ers

Innovations to meet cost challenges� One of the largest ATM networks

in India - conceptualized way ahead of competitors

� Improved operational scale while retaining cost efficiencies

� Novel idea to manage risk, scale

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Low-Cost ATM: Mass replication of successful ATM channel across unbanked geographies Low-Cost ATM: Mass replication of successful ATM channel across unbanked geographies

� Novel idea to manage risk, scale and cost of change

� “maximum return” philosophy has made the low cost ATMs ideally suited to our environments

Serving customers efficiently

Mov

ing

tow

ards

sel

f ser

vice

The

ele

ctro

nic

lobb

y

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Mov

ing

tow

ards

sel

f ser

vice

Automating transactions

The

ele

ctro

nic

lobb

y

Game changers – Cheque deposit machine

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• Self-serviced cheque deposit• Acknowledgement to customer with scanned cheque image

• Automated MIS of cheques to processing centre for upload into core solution

The game changers – Deposit ATM

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• Real-time online cash deposit• Credit card cash payments• Cheque deposit• Account related queries

Channel innovation – Information Kiosk

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• Information on product offerings

• Service Requests for :•Fund transfer•Investments •Insurance•…

• Lead capturing

The game changers: Dynamic Queue The game changers: Dynamic Queue Manager (DQM)Manager (DQM)

Man

age

cust

omer

que

ue a

t bra

nch.

Map

se

rvic

es to

ski

ll to

enh

ance

ser

vice

effi

cien

cy

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Man

age

cust

omer

que

ue a

t bra

nch.

Map

se

rvic

es to

ski

ll to

enh

ance

ser

vice

effi

cien

cy

� Queue Manager with mapped services

� Central monitoring tool for live branch footfall da ta

� Segmentation for priority to privilege customers

�Innovation

Deposits

Loans

Credit cards

Channels Product Suite

ATMs

Physicaloutlets

Integrated offerings across multiple channels-A one stop shop

Mee

ting

Cus

tom

er E

xpec

tatio

ns

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Life insurance

Private banking

Bill payments

Agents

CallCenters

InternetBanking

Share trading & demat

m-Banking

Customer-CentricApproach

Mee

ting

Cus

tom

er E

xpec

tatio

ns

Tapping the market opportunity - the first mover advantage

� ICICI Bank’s client application for its banking customers

� Enables secure mobile banking transactions on SMS and GPRS

•Lowest cost channel

•Fastest service delivery time

Channel migration onto a low-cost

alternative

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SMS and GPRS� Entire suite of net

banking functionality is available on the handset

delivery time•Adds to customer convenience

•Funds transfer•Bill Payments• Information•Mobile Recharge•Promo/Offers•Lead Generation

ICICI Bank’s mobile offering (contd.)List of Services

1) Banking�Balance Enquiry�Last 5 transactions

�Funds transfer�Cheque Book Request

2) Credit Card

� SMS n Cash

� Remittance product that allows a beneficiary not banking with ICICI Bank to receive cash.

� Leverages the SMS channel to convey a unique code to the

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2) Credit Card3) Demat Account4) Loan Account5) Bill Pay6) SMS n Cash7) I Services

�Apply Now�ATM Locator

unique code to the beneficiary's mobile that is used at the ATM to withdraw the remitted funds

� Available in all online channels

� Aims to increase the Bank's remittance coverage & generate substantial fee income

Using Information as an Advantage Point Data

ManagementData

Stewardship

MIS & Business DashboardsProcess

Consulting

Portfolio Management

Prospect Management

BI @

ICIC

I Ban

k

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Portfolio Management

Alternate Channels

Risk Tracking & Reporting

Channel Innovation

Decision Management

Credit ScoringCross-Sell

& Up-sell

BI @

ICIC

I Ban

k

Common Data Warehouse: Unlock cross-sell & up-sell potential across Group companiesCommon Data Warehouse: Unlock cross-sell & up-sell potential across Group companies

A 360-degree view – the Holy GrailV

iew

cus

tom

er r

elat

ions

hips

, res

olve

qu

erie

s &

mak

e in

telli

gent

sal

es p

itche

s

Cal

l cen

tres

can

tap

into

cro

ss-s

ell

oppo

rtun

ities

dur

ing

a ca

ll.

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Vie

w c

usto

mer

rel

atio

nshi

ps, r

esol

ve

quer

ies

& m

ake

inte

llige

nt s

ales

pitc

hes

Cal

l cen

tres

can

tap

into

cro

ssop

port

uniti

es d

urin

g a

call

.

Continued focus on business availability

ACHIEVE

� Continuous availability monitoring

� Systems and processes in place for assessing the business impact of application downtime

� Proactive prevention of

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VEMENTS

� Proactive prevention of outage

� Achieved 99.67 % uptime against the base lined 99.5%

� 67% improvement in uptime (no of hrs)

Tracking KPIsOLTP , OLAP

Text files

Spreadsheets

Automated

Processing

SeniorRefresh of Data as per agreed frequency like

Operational,Tactical information pertaining to Sales, Operations, Credit

and Risk management

A Control system A Control system designed to monitor designed to monitor various functions in various functions in organizationorganization

Provides status Provides status snapshots using snapshots using dashboards & dashboards & highlights highlights exceptions/deviationexceptions/deviation

��A Control system A Control system designed to monitor designed to monitor various functions in various functions in organizationorganization

��Provides status Provides status snapshots using snapshots using dashboards & dashboards & highlights highlights exceptions/deviationexceptions/deviation

BRIDGE RoomBRIDGE Room

Senior

Mgmt

Key Performance Indicators

Back end processingBack end processing

agreed frequency like Daily,monthly

Multiple Data sources

exceptions/deviationexceptions/deviationss

Helps in identifying Helps in identifying the exact problems the exact problems and take corrective and take corrective measuresmeasures

exceptions/deviationexceptions/deviationss

��Helps in identifying Helps in identifying the exact problems the exact problems and take corrective and take corrective measuresmeasures

Creativity + Discipline + transparent metrics = Val ue creation

Innovations along the way

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Innovations along the way

Some strategic Initiatives

Centralization of transaction banking Centralization of transaction banking

Virtualization: Infrastructure optimization driven by reduced server sprawl, real estate, power & cooling

Virtualization: Infrastructure optimization driven by reduced server sprawl, real estate, power & cooling

Massive Consolidation : servers, storage, appsMassive Consolidation : servers, storage, apps

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Centralization of transaction banking processes to generate efficienciesCentralization of transaction banking processes to generate efficiencies

Dramatic savings realized by implementing Open Office productivity suiteDramatic savings realized by implementing Open Office productivity suite

Initiation of six sigma across delivery channelsInitiation of six sigma across delivery channels

Defining moments

Centralization of IT Systems (and associated retail banking operations, processes & call centres)

Buy vs Build : shorten time to market: 90 day rule

Set industry benchmarks on cost efficiency of IT

Enterprise Application Integration investments

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Set up research and test lab for new technologies

Avoidance of technology backwaters by investing in systems that can pay for themselves

Maintain the fine balance between homogeneity and multiple technology islands

The strategy today

�Build an open, robust, scaleable architecture

�Align with Business objectives

Design Excellence

�Maximise uptimes and availability�Ensure business continuity

Service Fulfillment

�Ensure compliance with security standards�Cope with increasing regulatory pressures

Focus on Compliance

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�Cope with increasing regulatory pressures

�Explore cutting edge technologies�Enhance group-level synergies

Future Thinking

ITLowering the Cost base

Delivering on Internal SLAs

Maintaining the Tech-edge

On defined design precepts� Protects technology investments� Payback is in enhanced flexibility and

increased interoperability

Open Standards

� Look beyond the obvious silos� Architect for less dissonance

EnterpriseWide

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� Architect for less dissonance� Get long-lasting bang for buck

Wide

� Architect for scale� Crystal gazing is necessary to stay ahead

of the obsolescence curve

FutureFocus

Technologies for tomorrowMobile Payments: Low-cost, secure alternative to drive merchant acquisition and card issuanceEnterprise Mobility: Process efficiency multiplier and enabler for doorstep deliveryState of the Art Infrastructure affording high availability and lowest cost per unit – Clouds?Forms Automation: Eliminate physical

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Forms Automation: Eliminate physical handoffs and data entry through Imaging solutions & ICRConsolidation: Server, networking equipment, services & storage subsystemsGreening of IT: Reduce waste, save on power & space and cut expense

Innovation- Risks

Concentration risks from centralization of business operations & processes

Additional risks associated with novelty

High level of complexity

Compliance, availability, security and data

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Compliance, availability, security and data integrity risks

Biases in implementation and research

Unrecognized dilemmas

International recognition

ICICI Bank won the Best Transaction Banking award d ue to its� Strong Corporate Franchisees� Ability to take large exposures� A strong technology platform� Ability to customize on a per client basis� Large international presence helps close deals end to end� Customers benefit from streamlined processes based on a sound

technological backbone designed to provide ‘best in class’ service.

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technological backbone designed to provide ‘best in class’ service. � Effective & customized product delivery via a dedic ated transaction

banking sales and products team� Other Awards won

� Best Trade Finance Bank in India � Best Cash Management Bank in India� Best Domestic Custodian in India

Some accolades

� Asian Banker IT Awards 2009 � IBA- TFCI Banking Technology Awards 2008 � IDRBT Technology Awards 2008 � PC Quest IT Implementation Awards 2009

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� Indian Express Security Strategist Awards 2009 � CIO Ingenious 100 awards 2009� RSA Special Award for Security 2009� Information Week – Global CIO 50 2009

Thank you

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Thank you