As a recent entrant to the world of universal banking, IDFC Bank is trying to change the vocabulary that one associates with the physical reach of the banking industry.Given the advantages that incumbent players have in terms of branch network, it knows that replicating that will take time and cost money. So, if it has to reach the top, IDFC Bank cannot get there by doing more of the same but has to find a new way to drive its costs lower while expanding its distribution and acquiring more customers.
Rajiv Lall, the bank’s founder MD and CEO, says that the bank’s customer acquisition and servicing strategy has to be branch agnostic. He says it is not the number of branches that matter but the points of presence that matter, and these can be anything — a kirana store with a micro-ATM, a business correspondent outlet or a branch.
Eventually, of course, these points of presence may not be necessary as customers become more sophisticated and connect digitally — through internet or an app on the smartphone. IDFC Bank knows that in rural areas, that would take a little longer. For now, the emphasis is on getting rural customers to come on board.