Global Remittances, Asian Bank to Bank Forum, BAFT

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Global Remittances, Asian Bank to Bank Forum,
BAFT

• March 2007

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The India remittance market operates across
multiple corridors
UK and Europe
5 bn
North America
8 bn
S. E. Asia
3 bn
GCC
7 bn
The total market size through formal channels is
estimated to be over USD 24 bn. ICICI Bank
currently holds over 21 market share.
Source Reserve Bank of India, Market estimates
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The market is clearly dominated by banks
Customers

• Two distinct customer segments originate
  remittances
• White collar remittances originating largely in
  USA UK ( about 50)
• Blue collar remittances originating largely in
  GCC ( about 50)

Key Players

• Generic remittance providers (Most Indian and
  Foreign Banks)

• Online and other innovative service providers
  (ICICI Bank)

• Money transfer operators, Exchange Houses
  (Western Union, UAE Exchange)

Product Characteristics

• Originate through wire transfers/ cheques /
  Drafts
• High cost, Low convenience

• Advanced products such as online debits, Hi tech
  alliance products
• Low cost, High convenience

• Distributed as cash through agents or drafts
• High cost, High convenience

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ICICI Bank offers an extensive suite of products
ranging from the generic to the specialized.

• Issuance of Drafts/Cheques at originating
  destination using network of correspondent banks

Correspondent based products
Traditional

• Remittances using ICICI Banks offshore branch
  network. Option of Internet Banking based
  remittance also available

Branch based products

• Online account debit, cheques, wire, internet
  banking based remittance products

Money2India- Online Product Suite
Innovative Models

• Products in various geographies in alliance with
  key banks, available in both online and offline
  versions

Alliance Products
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Customer feedback was central to defining our
product strategy

• There are very few Indian banks in this country
  to take care of my India banking and money
  transfer needs
• Sometimes it takes more than 3 weeks for the
  money to reach my family
• I need to travel to an agent outlet every time I
  have to send money, its very inconvenient
• I never know where my money is at any point in
  time. Once the money is sent its like a black
  hole
• The transfer fees are too high. A large part of
  my savings actually go into paying transfer fees
  to send the money home

Customer feedback
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We profiled customers and built products around
their needs

Post graduates, mid-high income
category Technology, bio-tech, medicine,
education engineering industry verticals
White collar migrant
Is open to technology initiatives Larger ticket
size relationship value, Urban highly banked

High school, bottom of the pyramid, borrows
locally to meet immigration expenses Maids,
contract labourers, technicians, drivers
Blue collar migrant
Prefers traditional branch banking Small ticket
size relationship value, small towns, under
banked
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Technology played a key role in the product
innovation
Product Innovation
Identified Service Gaps

• Online transfers through ACH with transaction
  tracking
• Free remittances
• Email alerts

• Tedious documentation. Need to visit bank /agent
• High Charges
• Uncertain fulfillment

Internet Transfers

• Inconvenient - cash transfers only. (No account
  transfer option)
• High fulfillment costs

• Launch of Credit to account instant remittances
• Offered through branch and alternate channels

Instant Transfers

• Building products on the hi-tech payment
  applications of ICICI Bank
• Customer convenience at nominal cost
• Focus on alternate channels

Remittance Volumes
Leveraging Technology
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Technology and processing infrastructure help
minimize costs for end users

• Proprietary online technology platform enables a
  high degree of straight through processing

• Highly automated centralized payment processing
  ensuring better customer service

• Dedicated call center to attend to customer
  queries

• Technology costs of ICICI Bank are about 5-10 of
  global majors

Cost savings passed onto the customer. In fact
many of the products are offered free of charge
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Strategy of partnerships

• ICICI Bank
• Strong India distribution
• Technology enabled services
• Large beneficiary customer base in India

• Alliance Partners
• Origination capability
• Enhanced Reach
• Existing NRI customer base

Structured to leverage complementary strengths of
ICICI Bank and partner banks, our alliance
approach brings together the best of both worlds
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Alliances have a strong business rationale
Alliance Partner

• Maximizing the revenue opportunity from the
  existing customer base
• Increase penetration across the NRI segment with
  a unique offering

ICICI Bank

• Twin proposition enhances retention and customer
  value proposition
• Enhanced service levels for NRIs through
  alliance synergies

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Multi channel offerings covering branch, phone,
ATM and internet based origination
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NRIs benefit through such alliances

• Alliance with Wells Fargo Bank
• NRIs can open a Remittance Account at Wells Fargo
  branches. Funds transfer to dedicated ICICI Bank
  account through ATM, Internet and Branch channel.

USA

• Alliance with Bank of Montreal for remittances
• NRIs in Canada have access to over 960 branches
  of BOM to walk in and make remittances

Canada

• Alliance with DBS for remittances
• NRIs having accounts with DBS Bank, Singapore can
  remit money online using Money2India remittance
  platform

Singapore

• Linked accounts with Lloyds Bank
• UK NRIs have an option to link their Lloyds TSB
  a/cs to an ICICI bank A/c for ease of transacting

UK

• Alliance with Emirates Bank and Commercial Bank
  of Qatar
• Account holders of partner banks can fund ICICI
  bank accounts through branch and internet.

Gulf
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We believe we have built strategic capabilities
that can be leveraged to acquire a larger share
in the Global Remittance market..
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Overall Global Remittances Strategy
Leverage Technology Capabilities
Innovative customer centric product suite
Leverage Existing Capabilities Replicating the
India success story
Extend existing partnerships / alliances
Capitalise on operational efficiencies
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Our Vision

• Become a global money transfer player
• with extensive footprint across
• originating locations in N America, Europe and
  GCC
• receiving locations in Latin America, Asia,
  Eastern Europe and Africa.