The Indian Internet Banking Journey

ICICI – Internet Banking Initiatives Contd...

The service was launched to reduce transaction cost and offer convenient banking to customers. This meant enabling the customers to access their bank account and make transactions at any time. ICICI realized that to make Infinity a success, it would have to invest heavily in sound Internet banking e-commerce technology. During 1995-99, ICICI invested Rs 50 million in online banking technology solutions. In 1997, ICICI bought the 'BankAway'⁶ software from Infosys. BankAway was an e-commerce solution that provided the bank a platform to offer an integrated financial services portal to the customers.

It offered access to account information, bill payment, cash management, trade finance and online shopping. Infinity' was initially targeted at the non-resident Indians (NRIs) to enable them to manage their bank accounts in India through the Internet. According to the bank's sources, Infinity helped to increase the business generated from NRI customers from Rs 300 million in 1997 to Rs 1.4 billion in 1998.

The service was also aimed at individuals in the age group of 30 to 50 years working in the corporate sector and proficient in using technology. However, over the next few years, the bank enhanced its services to attract other customers as well. As a result, by early 2000, ICICI had over 110,000 Internet banking customers. In the first half of 2000, ICICI's Internet banking customer base touched 275,000.

On account of the growing competition in the Internet banking sector, ICICI focused on enhancing and extending its business-to-business (B2B) and B2C services through tie-ups and acquisitions. The bank entered into a 50-50 joint venture with Satyam Infoway⁷ in December 1999 to offer retail banking products and services on the Internet.

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6] BankAway was the first Internet banking solution in India and was installed at four out of the six leading banks in the country offering Internet banking services. It was featured in a study, 'Ranking of International Internet Banking Solutions' by Meridien Research, USA. BankAway was the only solution from Asia Pacific to be featured in the report.

7] Satyam Infoway or Sify was a Chennai-based subsidiary of Satyam Computer Services. Sify focused on providing Internet solutions like ISP operations, cybercafes and e-commerce consultancy.

Case Details

Case Code : ITSY003
Themes: EVA Financial concepts
Case Length : 5 Pages
Period : 1997-2001
Organization : L&T
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Construction - Building Materials & Equipment, Financial Services

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