In a surprising development, the Reserve Bank of India (RBI) directed Bank of Baroda to stop onboarding new customers through BoB World, the lender’s digital banking application.
Earlier too in a similar move, the RBI has asked HDFC Bank to suspend its new credit card issuances.
So what is BOB World?
In today’s rapidly evolving banking landscape, digital platforms have become instrumental in reshaping the way financial institutions engage with customers. Bank of Baroda (BoB), one of India’s leading state-owned banks, has been at the forefront of this transformation with its innovative digital banking application, BOB World.
The super app launched by BoB serves as a comprehensive digital platform that offers a wide array of banking services, seamlessly integrating various facets of banking into a single application. As of the latest available data, BOB World boasts over 30 million activated users, representing an impressive 41% penetration of the bank’s non-FI (non-financial institution) customer base.
Exponential growth
Over the past two years, Bank of Baroda has witnessed remarkable growth in BOB World’s user base. The bank added an astounding one crore (ten million) new customers to the platform each year, making it one of the fastest-growing digital banking platforms in the Indian banking sector. Activation of BOB World users saw a substantial increase during the fiscal year 2023, reaching 102.72 lakh (1.0272 million) from 101.45 lakh (1.0145 million) in FY 2022, signifying a growth of 1.2% during this period.
Financial and non-financial transactions surge
BOB World has not only attracted a vast user base but has also facilitated a surge in financial transactions. In FY 2023, financial transactions on the platform surged to 1,864.7 lakh (18.647 million), up from 1,483.94 lakh (14.8394 million) in FY 2022, marking an impressive growth rate of 25.66%. Additionally, non-financial transactions also experienced substantial growth, increasing by 26.51% to 27,745 lakh (277.45 million) in FY 2023, compared to 21,931.55 lakh (219.3155 million) in FY 2022.
Platform banking and BoB’s strategy
Platform banking is a paradigm shift driven by the digital transformation of commerce and the rise of e-commerce. The global and Indian banking landscapes have witnessed a profound shift towards digital and customer-centric banking. In response to this trend, Bank of Baroda has restructured its organisation, consolidating all its digital assets, including lending, deposits, payment products, and channels, into a single entity. This strategic move positions the bank to excel in the era of platform banking.
Earlier a Bank of Baroda official had told ETBFSI that the bank was actively gearing up for the platform banking era, confident in its readiness to embrace this transformative shift. It acknowledges the seismic nature of this transition and believes that organizations must either adapt to the platform banking model or risk being left behind. In a country like India with a significant millennial and Gen Z population, customer expectations are evolving rapidly. The official had said the bank was actively responding to these shifting dynamics by focusing on providing an aggregated view of customer relationships within the financial ecosystem.
Security and risk mitigation
Bank of Baroda had said it emphasised the importance of a robust security framework and gives its security team a prominent seat at the decision-making table. While no organisation is immune to breaches, the bank’s focus is on protecting customer data, ensuring financial security, and maintaining operational resilience.
