Banking · Strategic Management & Digital Transformation
A leading private sector bank shuts down 30% of its physical retail branches to shift to a 'Digital-Only' interface ('Neo-Retail'). Onboarding of new customers increases by 40%, but the 'Churn Rate' among senior citizens spikes to 25%. While Customer Acquisition Cost (CAC) drops from ₹2,000 to ₹800, cyber-fraud attempts rise by 15%. What is the most strategically sound approach for the bank to balance growth, inclusivity, and security?
- 1The bank should disable the mobile app for any customer above the age of 60 to protect them from phishing, effectively forcing them to use the few remaining physical branches.
- 2The bank should increase the interest rates on savings accounts for all customers to 10% to compensate for the lack of physical branches and the risk of cyber-attacks.
- 3The bank should implement a 'Phygital' model, maintaining 'Digital-Experience Centers' for senior citizens, enhancing AI-driven fraud detection, and utilizing the CAC savings to fund advanced cybersecurity infrastructure.✓
- 4The bank should immediately reopen all physical branches and discard the 'Neo-Retail' platform to prevent further churn among senior citizens and stop all cyber-fraud.
Correct answer
The bank should implement a 'Phygital' model, maintaining 'Digital-Experience Centers' for senior citizens, enhancing AI-driven fraud detection, and utilizing the CAC savings to fund advanced cybersecurity infrastructure.
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