Reaching Global Markets through Technology
Amar KJR Nayak1
The story of ICICI Bank indeed is quite exciting as we look into how the company has internationalized its business vis-a-vis the other banks from India. With the least number of international bank branches as compared to many of the other Indian banks, it stands tall in terms of its share of international business, especially in the foreign remittance business. In a short period of time, it has grown to be the largest bank in the private sector with a global foot print. Its share of international remittance business among the banks in India has risen from 4% in 2003-04 to about 30% today while retaining over 75% of the total online international remittance business in India. How did it grow so fast? Did it face any challenges at home or outside to achieve these successes? What have been its strategies in the internationalization process of its business? In other words, what have been the secrets of its success?
Several pertinent questions come to mind when we look at the pace of growth of this company in a highly turbulent and competitive world of international banking that has been guarded for years by the well established, highly networked, international banks and remittance business houses. Let us explore some of the following issues to understand the company’s approach towards internationalization and how it broke through the old guards of international banks and remittance business houses. • Why did ICICI Bank want to internationalize its business? • Why did ICICI Bank choose to get into remittance business? • What are the various sources of foreign remittance?
• How did the company reach the customers without physical presence? • What are the various products on remittance business?
• What have been the challenges working with international partners and markets etc?
• What were the basic strategies of ICICI Bank to succeed in its international operation?
1 Amar KJR Nayak, PhD., Strategic Management, Xavier Institute of Management, Bhubaneswar, India Journal of Case Research Vol. 1 Issue ii
• How critical was technology in the global remittance business? • What are its problems of delivery in India?
• What are the technological challenges that the company faces? Not only was the company faced with the challenge of competition from other established players in the industry but also from potential customers for international banking and remittance business. A few quotes below highlight this point. My family lives in Ernakulam. Who other than SBI will get money to my parents? --US respondent
Why should I choose a different bank when my family has been using SCB since 1990? --US respondent
World Banking & Remittance Business:
The history of banking started with the transaction between goldsmith and people. As a token of receiving gold the goldsmith used to issue a receipt. In this process the goldsmith started issuing receipts for specific values of gold, and it became the first banknotes. With the start of the industrial era goldsmiths turned into full-fledged bankers. Indeed they have played a major role in the initial phase of industrialization. To further increase their power and influence, these banking groups started influencing governments or monarchies and strategically utilized the service of these governments or monarchies for their self interest. And as a result only those politicians came to power who have played according to the will of banking groups. In the twentieth century these banking groups were able to discover a new way of money transformation, which identifies that by periodically restricting the money supply, crashes within the emergent stock exchanges of the world could easily be engineered, and one can examine this statement from the example of famous Wall Street Crash of 1929. In economic terms it will be categorized as transfer of wealth rather than destruction of wealth. In the later stage these...