Dear Reader,
Way back in 2007 when I was in the middle of my MBA, I came across a B-School case contest by the magazine Smart Manager. The contest challenged managers to solve a very specific business/managerial problem. In this particular case, it was about outlining a business expansion plan of the retail banking firm of a large bank. While researching more about retail banking itself, one bank's (Royal Bank of Scotland) historical method of bringing banking to communities stood out (see the links below... you should be able to get more links by Googling 'Mobile branch banking').
Although RBS probably had different reasons to provide such a service back then, it seemed like an ideal way to expand banking services to customers and communities as a whole, for the case in question. Back in 2007, I felt this would be a good method for business expansion. However, the contest judges didn't seem to think so.
Nevertheless, years later the service continues to grow in Scotland and has also gone high-tech...
and they even publish a schedule of stops...
So, what could be some of the challenges that existing banks in India may face to launch mobile branch banking?
We've never done anything even remotely close to it...
Actually, you do. Most banks send cash strapped vans to ATMs around the city/town to stock the ATMs with cash. This is pretty much the same thing, just needs to go that extra mile.
We can't send branches to rural communities, what if the van is attacked and all the money is stolen?
Get the van insured, use bullet proof glass, keep the cash balance low, square off the cash balance when it gets high, plaster large blown up posters of your CEO's face on the sides of the van, and show videos of your CEO sashaying down a ramp in the fashion show or giving a भाषण on a news channel debate. Don't forget to put the video in an infinite loop and full volume for maximum affect... that will surely drive away the vandals.
None of my employees want to go on the roadshow...
Put them on a rotating shift with perhaps a once a fortnight roadshow duty. Make sure they also work at the nearest branch and are accompanied by a teller and an IT guy. One of them can also double up as an automobile mechanic and the other can double up as the van driver! Also, can the van be air-conditioned? and maybe have a small refrigerator to store food and even have a porta-porta-potty?
We can't afford iPads in vans... we don't even have them in our branch offices!
Sure... don't use iPads but make sure you have a good reliable network connection to sync up transactions and other data so that you don't lose any of it. Maybe having a Pico base station will do the trick.
We have invested heavily in true mobile banking, and are more-ons to a smartphone app, so why waste resources on mobile branches?
A smartphone app has its place... no doubt about that but not everyone has a smart phone. Also, to install an app, YOUR customer needs to first have Internet access, download a compatible app, and install it. Why not get your IT guy to install a compatible version of the mobile app in YOUR customers' phone when they actually visit the mobile branch. The IT guy could also trouble shoot any issues and help them understand how to use the mobile app even after the mobile branch has left their locality.
We don't have good road access to all rural areas and communities?
Humph...
I don't like the idea....
?
Easier said than done...
Absolutely. I guess that's why mobile branches have not found much traction in India.
All said and done, at the end of the day a commoner may feel that you come in a fancy van, do the dance and just run away with their money! One can never say.
Regards,
Jyothin