SBI is planning a dedicated digital bank, updating the app to ‘Only Yono’ | Rare Techy

SBI is looking to implement the upgrade in 12-18 months, including migrating existing Yono customers to Yono only.

“Only Yono is envisioned as the next generation of Yono that will prepare SBI to launch a complete digital bank with a more flexible and modular architecture, more streamlined journeys, sleek and personalized customer-centric design and capturing value from ecosystems.” The bank is looking for consultants for this initiative.

Around the world, banks are experimenting with the idea of ​​opening up different digital entities to cater to a specific customer segment, providing a more targeted approach than before. In India, a Niti Aayog discussion paper published in November last year proposed a new category of regulatory institutions – full-stack digital banks. Of course, there is no separate regulatory framework for such banks by the Reserve Bank of India (RBI), but lenders want to be prepared if and when the regulator follows through on such a proposal.

While the concept of digital banking in India is not standardized and is defined by individual banks, SBI believes that the Niti Aayog’s discussion paper on digital banking licensing may lead to formal guidelines by the regulator.

Launched in 2017, Yono crossed 70.5 million downloads as of March 31, 2021 and had a user base of 37.09 million. Earlier, the bank was actively looking to spin off Yono into a separate company with then-Chairman Rajnish Kumar saying that by September 2020 the point was that it could fetch more than $40 billion. However, the bank has yet to go ahead with this plan. Additionally, Mint reported last December that Jio Payments Bank, the 70:30 joint venture between Reliance Industries Ltd (RIL) and SBI, may have its official launch delayed further as the company is still working on its business model. works himself.

“Although Yono has been adopted by customers very quickly, in order to consolidate its leadership position, it was decided by the bank that Yono is the only Yono not only in terms of features and functionality, but also also reinvent ease of use and customer experience,” the bank said.

Experts have shown how the lessons of making digital banks lead to cost savings. McKinsey said in its Annual Global Banking Report in December 2020 that over the past decade, some banks have dramatically optimized both revenue and costs for a small part of their business and become a digital-only bank within the bank. They create a separate, essentially building their own bank. blocker

“A digital-only bank can operate at a very low cost, up to 70% less than traditional services in the steady state. The creation of such a dedicated entity usually allows it to be launched faster, with fewer obstacles associated with legacy technology, and it allows banks to test concepts with lower risk before attempting to convert their entire business,” the report said, adding that over time, the bank could transfer parts of its legacy business to the new system.