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SBI gearing up for next phase in banking - digital banks through Only Yono

ICICI Securities 22 Mar 2022

What’s Buzzing:

India's largest lender State Bank of India is planning to foray into digital banking with a revamp of its existing mobile app and rebranding it as "Only Yono".

Context:

In a step towards getting future ready with digital banking, SBI is planning to launch a separate entity with a leaner and modular architecture with the aim of providing more targeted need based products at the fingertips of the customer. The digital banking app is designed to be a one-stop solution for banking (account opening, money transfer, bill payment, etc), lifestyle, insurance, investment, and shopping needs in a single app. This offering is focused on a streamlined journey and experience with personalised customer centric design capturing value from the overall eco-system.

Our Perspective:

Globally, banks have experimented with the concept of digital banks with the goal of catering to new age customers. In the Indian context, Niti Aayog has recommended a new segment of regulated entity i.e. digital banks. RBI is expected to formulate guidelines for licensing of this new form of banking. For SBI, Yono has witnessed healthy adoption with ~3.7 crore user base. Further, with the revamping of Yono as "Only Yono" with improved features and experience, SBI is setting the stage to consolidate its leadership in the new age banking space. In the long run, early entry into digital banking will enable SBI to attract a higher proportion of new age customers and achieve cost saving on the operational front, driving both business growth as well as profitability.

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