Business Today

I for innovation

Citibank’s Suvidha, which was developed in India, is now being rolled out across the world. Other foreign banks are also taking innovative products developed here to other countries. Is India emerging as the global banking industry’s innovation factory?

By Anand Adhikari | Print Edition: Nov 4, 2007

Citibank’s Suvidha, which was developed in India, is now being rolled out across the world. Other foreign banks are also taking innovative products developed here to other countries. Is India emerging as the global banking industry’s innovation factory?

When CITIBANK launched a pilot version of its “Suvidha” account in Bangalore way back in 1997-98, it had no idea that it was scripting history of sorts.

Shameek Bhargava
Shameek Bhargava/ Director & Head (Credit Cards), Asia Pacific/Deutsche Bank
“Our studies have shown higher usage per card (more than the normal card) and also more add-on requests” 
This scheme, which translates to “convenience”, and designed specially for salaried individuals, offered some unique benefits like utility bill payments, automatic creation of fixed deposits, direct credit of salary reimbursements, etc.

Over the next three years, the success of Suvidha prompted the bank to think of taking this scheme global—a first for a banking product developed in India for the Indian market.

Citibank decided to test launch this scheme, renamed “Bank-at-Work”, in New York. It clicked. So, in early 2001, Citi’s then Chairman Sandy Weill decided to export the product to the UK and later, to Singapore, the Philippines, Russia, Thailand and Poland. Today, Bank-at-Work has over two million customers globally and counting.

Suvidha was a trail blazer. Today, the Indian offices of foreign banks have become breeding grounds for innovative banking products that have the potential of becoming international best sellers.

At Standard Chartered Bank, Citigroup and Deutsche Bank, tens of new innovative retail and corporate schemes are being pilot-tested for eventual national and global rollouts.

It’s easy to call this practice “product outsourcing” and say that the Indian branches of foreign banks have become innovation laboratories for the global market—foreign banks operating in India are no longer only drawing on products from their parents’ global basket; instead, they are leading the charge and thinking out of the box.

Why India is emerging as an innovation centre

Innovative approach towards business

Indians by nature are very innovative in their approach to whatever they do. In fact, that’s also reflected in some unusual demands from corporate clients. Banks are now more receptive to innovation in order to get ahead of the competition. That’s one reason why banks in India are testing and trying out newer ways of servicing both retail as well as corporate customers.


India is a large market for any bank. There are many people who don’t even hold bank accounts, making the potential even greater. These two factors encourage banks to try out innovative strategies to increase their footprint in this market.


India is one of the most complex markets in the world. For instance, Citibank’s biometric initiative offers over half a dozen languages on the same platform. If Bangalore is the place to test a modern product, the interiors of Maharashtra or Karnataka are the best “laboratories” to test a biometric ATM.

IT Savvy

India has a large pool of IT-savvy customers. So, it is cheaper and easier to test out new products here.


There is cut-throat competition in the banking space in India. Foreign banks, which are highly (over)regulated, need newer , innovative products to wean away customers from Indian private and public sector rivals. And, since every successful new product gets copied, there is pressure to launch new, innovative products. 

The success of many of these products in Asia’s fourth-largest economy, where foreign banks face severe restrictions on expansion, has already resulted in many of these being replicated in other emerging markets like China, Hong Kong, the Philippines and Singapore.

Kaushik Shaparia, Head of Global Transaction Banking for India at Deutsche Bank, attributes this to India’s huge market size and the complexity it offers for extensive product testing. “You don’t get this kind of scale in a small country to test a new product for the global market,” he says.

Bankers say products that meet the complex demands of a diverse country like India, are usually very easy to replicate globally. (See Why India is Emerging As An Innovation Centre).

In terms of complexity, the supply chain to corporate India (for example, in the automotive, retail and FMCG industries) offers the widest range in terms of number and types of suppliers, logistics and locations.

Standard Chartered Bank came up with an innovative supply chain finance scheme in 2002 that has become popular with the electronics, chemicals and auto industries—it offers credit facilities to buyers of and suppliers to reputed companies based on the underlying supply chain linkages (a dealer gets money from Stanchart as soon as he ships goods to a customer and a supplier receives his payments when he ships raw material to his principal).

Sameer Sawhney, Managing Director (Transaction Banking), Standard Chartered Bank, says: “We cover over 3,000 dealers and 100 corporations today under the supply chain finance scheme.”

Since its launch in 2002, the product, called Supply Chain Financing, has been replicated in over two dozen countries.

Similarly, the bank’s customised payment processing solution, which allows customers to practically design their own cheques (they can customise cheques by inserting logos, names and other artwork), has also been launched in Singapore, Hong Kong and Malaysia.

Citibank and Deutsche Bank are also very active in introducing innovative solutions. Deutsche Bank pioneered the concept of in-sourcing corporate cheque issuance in early 2000.

Under this facility, Deutsche Bank takes the entire responsibility of printing and issuing cheques (for dividends, payments, etc) on behalf of its corporate client. This has been rolled out in rest of Asia since 2001.

Similarly, Deutsche Bank’s Registrar and Transfer Agent (RTA), which offers a one-stop shop (custody, fund accounting, registrar and cash management) for asset management companies, has found many takers in Taiwan, the Philippines, Dubai and Vietnam.

It was pilot-tested in India in early 2006 and launched commercially in July 2006. So far, no other foreign bank in India has ventured into the RTA segment.

But the biggest success of Deutsche Bank has been in retail banking, where its image credit card—which allows customers to choose from a bank of images like zodiac signs, animals, etc., which they feel express their personal outlook—has become a big hit with customers.

“Our studies have shown higher usage per card (more than the normal card) and also more add-on requests,” says Shameek Bhargava, Director & Head (Credit Cards), Asia Pacific, Deutsche Bank. The bank has got over 300,000 customers within a year of its launch.

In the pipeline...

These are a few innovative products developed in India that may hit the global markets soon:

Standard Chartered Bank

Buyer Finance

The bank offers credit to channel partners (dealers and distributors) on very attractive terms as a reward for their long standing association with the company or take an insurance wrap to cover the risk.

Info Manager

For trade services (exports or imports), you no longer have to call your banker or wait for the data (to be transmitted to your computer) as ‘Info Manager’, which is an internet-based trade reporting and enquiry tool, takes care of the reporting. You just need to log on to the net from any part of the world and upload your trade-related data from the bank.


Webcam banking

You no longer have to go to meet a banker face to face to sort out your queries as Webcam Banking allows you to talk to your banker anytime anywhere. This technology, undergoing pilot testing, is very costly; so, the bank is working on making it economical. This product is ideally suited for Citi’s most mature markets in the West.

Biometric ATM

It’s the simplest and most innovative way to reach out to people in the rural heartland. The biometric ATM allows rural folks to undertake self-service banking by using their fingerprints for identification purposes. This product can find application in countries like China where Citi is aggressively spreading its wings.

Deutsche Bank

Credit card basket

You don’t have to buy different cards to get the best value as the bank studies your spending pattern (travel, dining, etc) and provides a switching facility to half a dozen other schemes on a single card. This not only saves customers money by getting them the best deal but also saves them the trouble of carrying separate co-branded cards for travel, petrol or dining.

Payerid Solution

If you have thousands of dealers and multiple operations across distant locations (like an HUL or an ITC), it becomes a Herculean task to dispatch goods. PayerID enables companies to identify the paying parties without the need to maintain multiple bank accounts (of dealers or suppliers), thus the easy dispatch goods. 

The image credit card, also replicated by domestic banks like ICICI Bank, not only increases customer involvement with the product, which is fast becoming a commodity, but also enables them to personalise their credit cards.

In fact, that’s what prompted Deutsche Bank to replicate the product in Germany, its biggest credit card market.

In the retail space, Citibank pioneered the concept of “EasyPay” cash collection (through kiosks) for utility companies like cellular phone operators in early 2000.

Under EasyPay, any customer (of Vodafone in Citi’s case) can pay his bills through ATMs, thus, avoiding the hassles of standing in queue.

EasyPay is now being replicated in Hong Kong, Singapore, Indonesia and Malaysia.

Sudeep Yadav, Managing Director, India Sales Head, Global Transaction Services (GTS), Citi India, says: “The EasyPay solution is best suited for utility and insurance companies and the mutual funds industry.”

Citibank was also the first to work on a product for small businesses and professionals like lawyers, doctors and chartered accountants.

Called CitiBusiness, it provides a dedicated relationship manager, and also provides customers a comprehensive evaluation of their financial health through Business CitiPro, a custom-developed application that benchmarks small businesses and professionals (SBPs) with their peers.

Targeted specifically at India’s SBPs, a community that numbers over three million, this initiative was tested out in half a dozen markets like Hong Kong, India, Malaysia, Singapore and South Korea in 2006. India was one of the lead countries where this product was extensively tested and it was launched in other markets within few months of India launch.

If Stanchart has an “Info Manager”—Internetbased trade (export or import) reporting and enquiry tool for customers—as its future product, Citibank is working on “Webcam Banking”, a complete banking solution in the works. (See In the Pipeline...).

Deutsche Bank is getting rave reviews from India Inc. for its Payer ID, which enables companies to identify the paying parties (especially dealers) without the need to maintain multiple bank accounts.

This electronic collection facility was developed in India in 2006. The product enables large corporations to identify suppliers (or stockists) who have made electronic payments without the need to keep track of and reconcile multiple bank accounts. This product is now set for a big launch in China.

In fact, GlaxoSmithKline Consumer Healthcare, the bank’s first PayerID customer—it adopted the system in September 2007—has already reported a significant lowering of the turnaround time for dispatching goods and an improvement in efficiencies across its supply chain.

Citibank, which pioneered this trend, has a product for retailers, which it hopes will become another killer application, in the works. It’s a payment solution that will allow large retailers to pay its farmer suppliers for grocery or other agricultural products through mobile phones.

Considering that almost one in every five Indians now owns a cellphone, this application, if successful, will revolutionise the payment market in India.

Clearly then, the Indian subsidiaries or branches of foreign banks are now contributing much more to their headquarters than merely profits.

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