BCG supports Karnataka Bank with business transformation

12 December 2017 3 min. read

In a bid to tackle market disruption and keep pace with trends in the banking and finance industry, Karnataka Bank has embarked on a transformation journey, with a focus on modernisation. To help with the transaction, the bank has partnered with The Boston Consulting Group.

The banking and finance industry around the world has been in something of a spin in recent years, as rapid digitalisation has transformed the traditional methods of financial transaction. From high-tech data analytics to transactions based on sound-waves, the industry is being subjected to rapid and regular transformational developments.

In most countries, banks are scrambling to keep up. This includes the Indian banking sector, which was already plagued with a number of fundamental problems before the addition of disruption to the mix. Reports emerged earlier this year that banks in India were being operationally hindered by non-performing assets (NPAs) of up to Rs. 10 lakh crore, highlighting the need for reforms.

Given their mandate in dealing with such issues at a global level, one sector that has been particularly involved in solving this problem has been the consulting industry. After the NPA values emerged, creditors in India hired top consulting firms, including Big Four professional services firms DeloitteEYPwC and KPMG, to assist with insolvency proceedings.

BCG supports Karnataka Bank with business transformationKBL Vikaas

One particularly active consultancy in India's baning sector is The Boston Consulting Group (BCG) a global strategy and management consultancy. The firm has already been hired by IDBI bank to bring about an organisational turnaround to tackle poor revenue growth. Now, BCG has been selected by Karnataka Bank to partner with a major structural transformation.

The partnership, dubbed ‘KBL Vikaas’, has identified seven key areas of strategic intervention for optimal results. These include: new growth strategies; digitalisation of service outlets where applicable; strategic tweaking of HR management structures; initiatives to boost stakeholder value; boosting efficiency; strategies for corporate branding and repositioning; and, perhaps most importantly, partnering with FinTech companies.

In terms of measures taken on the ground, the project will focus on improving sales as well as invest in designing attractive products. The project will also focus on cutting costs, primarily through the automation of key processes through digitisation, and also by helping manage NPAs. Other measures will include optimisation of price levels and increased investor engagement.

Commenting on the project, Mahabaleshwara M S, Managing Director and CEO at Karnataka Bank said, “The transformation exercise is a bold & timely initiative towards total transformation of the bank. Our transformation journey in partnership with BCG, who is regarded as a global leader in transformation will add values to all the stakeholders. With this, Karnataka has entered a new era and with the active involvement of 8,000 plus work force of the bank with ‘Bank First Attitude’ and aided by BCG’s proven expertise, we are determined to make it a “model transformation” in the banking sector.”

Meanwhile, Senior Partner and Director at BCG, Saurabh Tripati said that he is "excited" about the partnership, adding that he is equally aware of the transformation responsibilities, "Karnataka Bank is a time tested bank and in their endeavour to reposition the bank as a ‘New KBL’, BCG is committed to make it a successful and rewarding transformation.”

Last month, Chairman Srivatsan Rajan, the Chairman of Bain & Company in India, said in an interview that he believes India's banking reforms are not ambitious enough.