Bank of Baroda builds new age offerings across the length and breadth of India, says Head of Wealth Management, Virendra Somwanshi
Virendra Somwanshi, the Head of Wealth Management at Bank of Baroda group, spearheaded the Baroda Radiance premium banking offering, leveraging his more than 17 years of experience at Citibank. He achieved great success boosting the retail banking and wealth management franchise of the foreign lender in India. Mr. Somwanshi spent much of his career at Citibank in India. He then moved to Bank of Baroda after a stint as CEO of Motilal Oswal Private Wealth Management. In a virtual interaction with Hubbis, Mr. Somwanshi talked about his missions at Bank of Baroda and the evolution of wealth management in India where it has a network of upwards of 8000 branches, along with 140 million customers. Aware of the fact that it will be a challenge to create a new age wealth management offering within a traditional banking behemoth, he says that vision and the drive to do so comes from his seniors at the very top of the bank. Further, as an accomplished mid-life marathon runner, Mr. Somwanshi says he also has the patience and endurance to see it through.
Mr. Somwanshi starts the conversation by highlighting that today just 5% roughly of the potential individual investible funds in India are invested more ‘formally’ in financial instruments, with the vast bulk of money sitting literally under the mattresses or in low yielding deposits. He points to the gigantic demographic advantage India has with a vast, rapidly expanding population which is the youngest in the entire world.
He says, “unlike some of our western counterparts where there's a smaller younger population taking care of a far larger older population, here there is a far larger young population that is becoming increasingly well-to-do due to rapid GDP growth and accelerating private wealth accumulation.”
A vibrant scene in India
Mr. Somwanshi highlights India’s dynamic corporate scenario, where there is an increased awareness amongst foreign portfolio investors and financial investors across the globe. The opportunities in debt and equity instruments in new economy sectors, like e-commerce and other technology-driven sectors are increasing, many of which are coming to the market with public offerings. He cites, for example, listings of Zomato, a food delivery business and Nykaa, which closed recently as the second largest IPO investment ever in India. “Onshore and offshore, there is a huge and growing awareness of the absolutely remarkable opportunities in the expanding investible space in India,” he reports, enthusiastically.
Leveraging the vast client base
As the Head of the wealth management business at Bank of Baroda, Mr. Somwanshi’s mission is to leverage the opportunity of scaled-up distribution the bank offers. “As a public sector bank with more than 8000 branches, we have 140 million customers, we want to bring the best-in-class wealth proposition to them,” he explains. “We are the second largest bank in India in terms of the asset base .and on the investments side, We distribute cutting edge products including Mutual funds, Portfolio Management Services, Alternate Investment Funds, Structured products etc. and in terms of protection, we have a tie-up with six insurance partners covering the entire protection product spectrum. My mission at Bank of Baroda is to completely revamp the offering, to grow revenue by five-fold in the next two years and to offer customers an excellent array of services.”
“In a nutshell, we are trying to shift a large public sector bank with an illustrious legacy to a completely new age, nimble , aligned value proposition bank.” he said.
“Segmentation is the key to drive growth. Our premium banking ‘Baroda Radiance’, the core offering for the emerging affluent and HNW (High Net Worth) segments is already operational. Radiance Private Clients offering is expected to follow in coming months for the UHNWI segment with investible funds with us above USD2 million.”
Transitioning to the new age of wealth
“We've followed the course of pure client segmentation to customise and tailor make banking as well as wealth management value proposition for all target customer segments taking into account nuances associated with each segment” he reports. “Actually, we began this approach when I came to the bank in 2017 and we created Radiance version 1.0. Now that I am here again and, in this role, we can move this fully forward.”
With an estimate of 250,000 captive Radiance customers, the bank aims to hire up to 500 relationship managers (RM), with 160 already on board. The RMs will be first placed in the country’s top 30 cities, whereas, for the branches across the tier two and three cities, the Bank is creating a centralised digital hub which will house the virtual RMs and a robust technology framework to deliver the banking and wealth management services to its customers.
“This hub is to be based in Mumbai and it will be completely digitalised, paperless, managing both their banking and wealth management needs,” he adds. “It will allow complete coverage of our potential client universe from a single hub, supplemented with our RMs who can reach out virtually.”
Best models, best examples
Mr. Somwanshi reveals one of the benchmarks he is following is a very successful Citi’s international personal bank model based in Singapore, which takes care of all the offshore clients in Asia.
“We are incorporating best practices and best models from around the world,” he says, “and trying to learn from those successes, and build something that is relevant specifically for India. The last 18 months have resulted in very rapidly accelerating adoption of digital technologies by our clients, and we are confident of our virtual model to handle our customers outside the top 30 cities as well.”
He adds that Radiance 2.0 is already being rolled out and explains that there is a wide variety of new products and services they are adding to the offering, such as the ‘Eterna’ card, which is available for every Radiance client and has a host of benefits. Moreover, there are other services as well like,, estate planning and Will execution services, global residence and citizenship advice for customers who want to migrate outside of India, and so forth.
We are also targeting the extensive NRI population across more than 20 other countries, offering enhanced forex remittances at attractive rates, and a variety of services such as complimentary airport collections when they arrive here, and so forth,” Mr. Somwanshi adds. He estimates this NRI population that might be potential Radiance clients to around 36,000.”
A loyal client base
Bank of Baroda’s client base is loyal to the brand, carefully nurtured over the last many years. “Our business stands on two pillars i.e., trust and knowledge,” he says. “In building our team of RMs, we emphasise these two qualities, which we believe are utterly essential to the success of our offering. The RMs will have rich knowledge and access to the array of products and services while we build to provide a holistic solutions suite for our customers.”
In our branch banking model, we intend to increase the coverage of mapped wealth executive branches from the 2000+ to 5000+. The bank has a robust training and education programme to ensure that their talent is up to the tasks ahead. This way we get the best of the internal talent within the bank who is hungry and ambitious and also groom them for bigger roles in wealth management for the future.
“The Bank has a state-of-the-art “Apex Academy” besides number of academies spread across Zones / Cities imparting training courses across the bank for various functions and businesses through full-time and experienced faculty based out there. We further plan to partner with a professional training institute and have identified a few key areas for improvement.”
Building a strong team
Mr Somwanshi says, Bank of Baroda has a very unique approach and we intend to quickly become the number one wealth management player in the PSU space. I am confident that our efforts of building a strong talented team both in the central office and at the ground for both branch banking and Radiance will pay rich dividends. We are benchmarking with the best players in the wealth management industry including private sector players and quickly learning from experience. We are a progressive bank, for example we were one of the first state run banks to have our own FinTech department, and have tie-ups with more than 40 FinTech companies already. We have a Centre of Excellence, which is run by Accenture, which has created the entire data lake of the 140 million customers providing the analytics to guide us to the right products, services and relevance. IBM also runs the Centre of Excellence for IT for the bank. We have multiple awards for being one of the most digitally active banks, right from digital onboarding to our state-of-the-art apps we are rolling out,” he adds.
Driving to (hyper)personalisation
He zooms in further on this line of thought, that the bank wants to take major strides. “In a somewhat futuristic sense, we want to bring in the analytics piece, the whole hyper personalisation through data analytics and AI and ML,” he reveals.
“We are currently in a work in progress mode for thethe whole intelligent portfolio planning solutions using ‘what-if analysis’ for backend, for clients wanting to engage through our digital marketing tools, and the digital training and upskilling platform using gamification. We are moving ahead from our history to evolve into a new age bank for the future.”
Virendra crystallises his three core priorities for the 12 to 18 months ahead. “We have talked about a variety of missions,” he says, “but perhaps number one for the key tasks ahead is getting the digital sales hub completely operational and scaled up, as that hub will manage about 125,000 clients who are spread across the country. Having the capability to handle these customers right from digital onboarding is essential and offers us great potential.
The second key mission is to onboard the new relationship managers and ensure that they reach out to the entire set of clients, making a major impact as far as their banking and wealth management needs are concerned. And the third key goal is to unravel the opportunity of digital sales and digital marketing.
Mr. Somwanshi closes the discussion by reiterating the massive opportunities and also challenges facing him and his teams as they strive to develop a fully fit-for-purpose wealth management offering within the vast portals of Bank of Baroda. “We have a clear vision, a clear strategy, and we have a clear mandate from the banks board members. It will take time, but we are confident we will achieve the type of growth we have targeted and deliver a genuinely high-quality wealth management offering across the country.”
Virendra Somwanshi comes from Aurangabad in the state of Maharashtra, and that is where he completed all his studies through to an engineering degree and then moved to Pune for his MBA at the Symbiosis Institute of Business Management.
“I started my working life as a Mechanical engineer in SKF Bearings Ltd,” he recalls, “but the MBA had opened doors for me and changed my horizons, and it was not long before I joined Citibank; I then stayed with them for 18 years, l most of it in India except a short stint in Singapore.
He then joined Bank of Baroda Capital Markets in 2017 at the outset of a major transformation, where he was instrumental in conceptualising, designing and launching the wealth management and equities platform by creating various segments in the Affluent, emerging affluent segments across the domestic and NRI clients to leverage Bank of Baroda's extensive network of branches.
“Coming from Citi into such a major state bank, it felt almost like doing national service for the country,” Virendra quips. “But it was a great experience and opportunity to make a real difference on the ground. That was when we launched Radiance version 1.0. we created the first version of our segmentation approach to wealth management. I then moved for a year or so to become the MD and CEO of Motilal Oswal Private Wealth Management, but was drawn back to Bank of Baroda to finish what we had started, namely the unfinished agenda of scaling up the wealth management business and unravelling the huge opportunity here,” he adds.
Happily married, Mr. Somwanshi has two children aged 13 and 16 years old. In his Spare time, he loves reading, watches Bollywood movies, plays cricket and other sports. For the past five-plus years, he has been a running enthusiast, completing several marathons, including the New York Full Marathon in November 2019. “The fitness bug has bit me, but it has not come without a price as I have broken various bones, and damaged so many muscles and ligaments. In fact, I joke that I am a part orthopaedic surgeon as a result.”
He lists some of the injuries he has suffered, including a shoulder tear, both legs & both hands fractured – twice and others . “I have been patched up and reassembled after multiple surgeries and I still keep going,” he says. “I have realised that if the mind agrees, then the body has to follow. I think running the full marathon is a great leveller, keeps one grounded, one magically discovers that you are more capable than you know, and you are a student for life. It has been a great learning journey for me as well.”
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