Axis Bank now goes live with 25+ new tech or digital capabilities every quarter:
Axis Bank continues to remain among the top players in the retail digital banking space. Here are some figures that highlight its progress. The bank’s y/y growth in total UPI transaction value in Q3FY22 is 133%. Its market share in UPI transactions is at 15%. Share of digital transactions in the bank’s total financial transactions by individual customers is 92%in Q3FY22. Y/y growth in mobile banking transaction volumes is 75% in Q3FY22, with market share of 15%. Saving accounts opened through tab banking stands at 71%. Retail term deposits (by volume) opened digitally in 9MFY22 stand at 68%. New mutual fund SIPs sourced through digital channels is 46% in 9MFY22.
On business parameters, Axis Bank’s advances grew by 17% y/y and 7% q/q. The growth was strong across all 3 segments of retail, corporate and commercial bank. Amitabh Chaudhry, MD & CEO, expands: “In consumer loans, digital lending grew 33% q/q. It contributes upwards of 52% to key product lines such as Personal loans.”
Axis Bank was among the first banks to go live on the account aggregator framework. The first products to go live are auto loans and personal loans. Amitabh shares: “The impact of digitization and streamlined customer journeys is bearing results and we find greater customer engagement and conversion.”
Savings Accounts
Axis Bank’s focus remains on reimagining end-to-end journeys, transforming the core and becoming a partner of choice for ecosystems. Amitabh points out: “We launched a new digital savings account aimed at millennials that offers digital rich features and 10-15% cashback for purchases on the leading ecommerce platforms. Our D2C savings account acquisition saw a growth of 50% in this quarter as a direct result.”
Highly Rated Banking App
Axis Bank’s mobile banking app is among the highest rated banking app on Apple Store (rating of 4.6) and Google Play Store (4.6). Amitabh informs: “On WhatsApp banking, the bank now has over 3 million customers on board within a year of launch. We also witnessed best ever MAU (monthly active users) on our mobile app this quarter.”
Open Banking
Integrated ‘One Axis’ approach has supported many corporates, some of which have also figured in the ‘2021 Burgundy Private Hurun India 500 List’ launched recently. Amitabh elaborates: “As part of our digital strategy, we continue to focus on open banking initiatives to enhance user experience through constant innovation in our offerings to both retail and corporate banking customers. In retail, we continue our growth focus, with the economy turning around and limited impact of the virus. We are optimistic about the future and plan to leverage every sustainable growth opportunity that is available to us.”
Strong Tech Team
Axis Bank has been recently awarded the ‘Finacle Innovation Award’ and ‘IDC Industry Innovation Award’ for Customer Journey Re-imagination and Innovation in Data Intelligence respectively. Speaking about the transformation of the bank’s technology stack, Amitabh says: “Our 1500+ tech and digital colleagues are working on 30+ initiatives that are transforming the core and building future ready capabilities. We now go-live with 25+ new tech or digital capabilities every quarter on the back of this initiative.”
Cloud & API
On cloud, Axis Bank’s leadership continues. Amitabh informs: “We have established the largest virtual desktop infrastructure (VDI) setup in Indian banking with 2300+ virtual machines. We already have 55+ of our critical applications on cloud and the migration is getting quicker every quarter.” Axis Bank is committed to its open ecosystem proposition to build dedicated partnerships using its market leading API strategy. It has deployed more than 300 APIs across retail and corporate channels.
Partnering MinkasuPay
Customer convenience through faster and seamless processes has been a key theme for the Axis Bank this year. The bank announced partnership with MinkasuPay to offer a biometric authentication solution for NetBanking transactions, providing a smoother and more secure banking experience without username, passwords or OTPs that go through in a matter of seconds. Amitabh adds: “Reinforcing the bank’s commitment to lead digitization in the transaction banking space and build a digital wholesale bank, we executed the industry-first blockchain enabled domestic trade transaction on Secured Logistics Document Exchange (SLDE) – a GOI-backed platform, ensuring greater transparency, visibility, and sustainability for all stakeholders in the process. our bank also concluded industry-leading structured derivative transactions with large Indian corporates. We are also one of the first private banks to have gone live on the national portal of Indian Customs to collect custom duty payments.”
Fee Income By Digi Channel
Axis Banks’ fee income stood at Rs33.44 billion, growing 15% y/y and 3% q/q. 65% of its fees come from our retail business and balance from our wholesale franchise. Puneet Sharma, Chief Financial Officer, updates: “Fee from cards grew 21% y/y and 8% q/q. Fees from third party distribution grew 33% y/y and 13% q/q. Fees from our digital channels grew 20% y/y and 3% q/q.”
Credit Card Growth
At 0.77 million, Axis Bank achieved its highest ever credit cards acquisitions in this quarter and up 174% y/y and 40% q/q. With international travel reviving a bit in Q3, its digital forex cards issuance saw a good growth. In Q3, digital contributed 40% to overall FX card sales. 40% of credit cards were acquired through Known to Bank partnerships across Flipkart, Google Pay, Freecharge and others, up from 21% in FY21 and 6% in FY20. Amitabh adds: “We have 1.72 million Flipkart Axis Bank Credit Cards in force, making it one of the fastest growing co-branded portfolios since its launch in July 2019.”
Advanced Rule Engines
Organic growth at Axis Bank has been strong on the back of new liabilities account growth that it has seen. Amitabh describes: “A significant portion of this growth is driven by the advanced rule engines built by the analytic team. There are more strategic partnerships that we are entering into, and we see better risk and spend performance in this portfolio. Also, our organic growth has been strong on the back of new liability account growth that we have seen.”
Customer Touchpoints
Axis Bank is now the second-largest merchant-acquiring bank in the country with an installed capacity of 8.42 lakh terminals. The bank has gained an incremental market share of 42% during the 8MFY22 period, i.e. April-November 2021. The merchant business is another example of the ‘One Axis’ approach with innovative offerings to grow the business across deposits, lending and fees. Amitabh claims: “We are the 1st bank to lead with a feature rich and pocket version Android terminal for retailers. We are building a network of partners to grow this business.”
As on 31st December 2021 (31st December 2020), Axis Bank had a network of 4700 (4586) domestic branches and extension counters situated in 2665 (2586) centers. As on 31st December 2021, the bank had 11,060 ATMs and 5943 cash recyclers spread across the country. Amitabh informs: “Our Axis Virtual Centre channel had 6 centers with over 1500 virtual relationship managers.”
ROI on Tech
The bank continues to make significant investments in building digital and tech capabilities, invest in new age talent and work on transformation projects across businesses. Amitabh says: “Our near-term costs remain slightly inflated because of this. We are at the back end of this investment cycle now. We are seeing the returns on these investments flowing through gradually but surely. We have made significant investments in technology, digital and multiple business transformation initiatives. This has meant a near term rise in costs but has set us on the right trajectory to deliver on our GPS strategy. We are optimistic and confident about our future.”
