Session. I would like to take this opportunity to thank once again our partners, our agenda partner Pine Labs, banking infrastructure partner Zika, we have financial inclusion partner Matut Finino, we have Gourmet partner Payton and VIP launch partner Navi Technologies Limited. I would request all the delegates to settle down immediately, take their seats because our next set of speakers are ready. In fact, we dive into another fireside chat which is all about the next horizon where we are building a global ready inclusive bank for the future. So the stage is set and so are we. All right, let's quickly have all of you settle down and let's move forward with that. Ladies and gentlemen, GFF 2025 is also a stage for innovation and celebration. Be sure to catch the live investment pictures and the product showcases that are shaping the future of finance. We are also unveiling exclusive industry reports right here at GFF, setting the tone for what's next in fintech. And of course, one of the biggest highlights, the global fintech awards happening tomorrow at 6:00 p.m. Adjustment 3. An evening dedicated to honoring excellence and innovation in our industry. So do mark your calendars and be there at 6 p.m. adjustment 3 for the global fintech awards.
And thank you sir for being here. You know the banking system is really in the throes of a transformation and especially with what RBI has recently done with the spate of reforms and the structural upgrades, the reforms, the governance capital strengthening measures that have been put in place over the course of the few years. But really how a legacy institution like yourself is transforming while at the same time ensuring that you're taking on global competition, that is something we're hoping to cover here in this session. So Mr. Chan, thank you so much again and welcome to this session. Let me start by you.
Thank you. And let me start by one of the agenda that you've set for your bank and that is to double the size of the bank in 5 years and you said that two years back now. So in 3 years we'll see double the size of the bank. That is quite something. Tell us what will drive this kind of fast growth and the role digital will play in it given that we're here at the fintech festival.
Thanks Rio. When we talked about doubling the balance sheet in July 2023, it was a rolling plan. With a CAGR of 12% in the past five years, if we achieve 13% in the next five, we'll double. We have significant international presence, retail growing over 20% for 13-14 quarters, focus on retail and mid-corporate. We opened over 250 branches in the last year, expanding in micro markets. Digital is a key enabler, and we hope to add 1-1.5% extra growth. It's a rolling goalpost.
But carrying the weight and the legacy of the institution that you are over a century old now. Just tell us what kind of changes you're pushing into the bank whether that is cultural or governance to be able to move at the speed of a startup today because that's what you have to do if you to realize some of these ambitions.
Absolutely you're right on that. Any organization particularly legacy like us, 118 years. One key theme is trust and safety as a government-owned bank. At the same time, Bank of Baroda is one bank culturally and digitally more agile. We have built capacity in HR to adapt, with lateral hires and internal talent. On digital architecture, we are agile, not waterfall. We encourage open banking and agility. For example, we are bringing internet banking and mobile banking in-house to design as per our requirements. We have a shared service company BGSS supporting manpower. The bank is as young as any new entity, adapting to changes. Our operating model needs to be relevant for business, structure, and market, while maintaining our 6% market share.
But to stay young, to stay relevant, to become agile, what are you doing to adopt some of these newer technologies that are coming into the fore? Every hall here we're having one or the other conversation about artificial intelligence. What is the real use case beyond just chatbots? What is a bank like you doing with AI to strengthen your systems and even on cyber security?
AI is critical. We use AI in risk modeling, fraud risk management, underwriting scoring. We treat AI to augment, not supplement. In the last two years, we deployed a bot called Aditi for live customer service, and a virtual branch in a physical branch where customers can interact with a robotic interface for 18 transactional services. We aim for a hybrid structure catering to both digital and physical customers. We always aim to be on the curve. Currently, we are spending almost 10% of our operating profit on technology, and as a policy, we can go up to 15%. Tech investment should improve customer experience and ease of banking, as well as the quality of life for our bankers.
Well that's an interesting concept, a physical branch so to speak for customers that want both the physical experience sometimes only the digital experience. But we also have to talk about this global push for banks because you're balancing a lot of things on your plate. On one hand you're talking about digital, cyber security, doubling your balance sheet, your AI adoption, but then you also have to look outward because Indian corporates here are also growing, they're making acquisitions overseas, FDI coming into the country. What are you doing to pivot to serve this global diaspora and how do some of the recent reforms from RBI particularly when it comes to M&A financing for instance going to aid this transformation?
Our tagline is India's international bank. International book is 16-17% of global book, up from 12% three years ago, aiming for 20%. We have 85 branches outside India, optimized from 95, now looking to expand and consider inorganic buys. We are the right platform for India's internationalization. Recent policy on M&A financing is a good move; we participate in global syndication. We also aim to increase trade book to support Indian corporates overseas. We have a large presence in Africa and are working to convert aid to investment. M&A finance will boost this.
But in three simple points if you could put it, what would a large scale globally competitive Bank of Baroda look like say 10 years down the line, and the three things that would be needed right now to make that ambition get realized?
We aim to increase market share in India and double balance sheet from 27 lakh crore to 54 lakh crore organically. We are the second bank with significant international business. We intend to increase international book from 16% to 20-25% in 3-5 years. We are looking at overseas expansion and inorganic opportunities. The policy change allowing M&A financing is a big help. As India's international bank, we must be the first mover.
Well we've spoken about the global trends but you can't really be a bank of the future unless you cater to these future generations, the younger generations. What are the changing patterns you're seeing with Gen Z and beyond? And how are you adapting at Bob World for instance? What are the changes, innovations you're bringing about in your own app to cater to the changing needs?
You're right. Footfalls in metro branches have decreased post-COVID as people prefer digital. We experimented with hybrid branches where a digital space within a physical branch offers multiple services, enticing customers to also do physical transactions. Bob World is our super app with significant customer base. We are launching a new version in a month with better customer experience, safety, and e-commerce integration so customers can do everything in the app without leaving.
Has your view on collaboration or partnership with fintechs evolved over time? You've set up your own subsidiary at Bank of Baroda to experiment and bring in adopt new technology. Do you still feel the same need you did five years back to partner with fintechs, or do you think you want to build those capabilities in-house, or perhaps look at some acquisitions rather than collaborations? How is the view changed?
Fintech is a beautiful thing for India. We have 25+ fintech partnerships and 100+ digital integrations. We believe in collaboration. At the same time, we activated BSTL (Bordasan Technology) to behave as a fintech company. We have two super apps: Bob World for customers and Bob EPA for non-customers, to acquire non-customers. BSTL will invest in emerging technologies and create solutions, so our IT bandwidth is not compromised. We are both a bank and a fintech, capturing both worlds.
