Axis Bank Digital: OPEN
December 2020
1 Digital Banking – Axis Bank’s “silent revolution”
73% 73% 72% 58% 52% 48% 4.6 Digitally active Fixed deposits New SA PL disbursed** Credit cards New MF Mobile App customers opened** acquisition* issued** sales** ratings D2C products
250 20% 17% 87% 60,000 250 300+ Services on Market share in Market share in Digital Staff on RPA bots in Employee tool UPI (Q2FY21) ~ Transformation digital channels mobile (Q2FY21^) transactions^^ BYOD action Journeys 800 110 75% PB 120% 100+ Agile People In-house New hires from Scale big data Lift of bank AI use cases Enabled teams dedicated to development non-banking Hadoop credit model deployed at with CI/CD, micro- Capabilities digital agenda team backgrounds clusters GINI scores scale services based over bureau architecture
*Digital tablet based account opening process for H1FY21 ^RBI data for Q2FY21 ~ BYOD : Bring your own device Top 3 ^^Based on all financial transactions by individual customers in Q2FY21 ** digitally in H1FY21 Trends shaping the bank of the future
Bank of the future will be invisible and embedded into the customers journey – ecosystems and partnerships will become critical
Data, digital and technology will converge to provide personalized banking
Public data and Digital infrastructure will enable dramatically different and fully digital business models; sachetization of financial services and emergence of small business ecosystem are two immediate opportunities
Technology and data will enable significant release in capacity and productivity boost by reimagination of end- Future trends end journeys
Product differentiation will become as important as distribution power
Fundamentally different people and capability model will be key to success
3 Our aspirations
Delivering a distinctive customer experience • Through distinctive frictionless experience/ journeys
Enhance the bank’s growth profile by expanding market share • Deliver at-scale digital propositions addressing customer needs Deliver sustainable value through digital
Release efficiencies and deliver better cost income profile for the bank • Transform the bank leveraging digital
Introduce new Products / Segments / models as value creating engines • Build a “full-stack” digital foundation across different banking segments
4 Our Digital Bank strategy
Partner of choice Reimagine top 1 2 Transform the core 3 for select end-end journeys ecosystems
4 Data and analytics
5 People, processes, technology
5 Our Digital Bank strategy
Reimagine top Embed into 1 2 Transform the core 3 end-end journeys ecosystems
4 Data and analytics
5 People, processes, technology
6 1 Reimagining customer journeys
Build integrated Introduce new products/ propositions Reimagine end-end segments journeys
• ~100 journeys identified; basis size, • 4 new areas (products, segments • Customer centric cross-product digital profitability and franchise relevance identified) propositions • Phase wise launches starting Q4 • 5 areas identified; early stages of Details • 30% delivered, phased plan to take and extending over next 12-15 design coverage to 90% in 18 months months
• Better topline growth • New revenue streams • Customer lifecycle value Impact • Improved cost metrics • New customer acquisition • New customer acquisition markers • Better quality
7 1 OPEN: Axis Bank principles for reimagined customer journeys
0-based redesign; customer centric, design led and 0-operations
Proprietary in-house capabilities
Ecosystems capable; built for all Axis and partner channels
Numbers, Numbers, Numbers: Impact led and metrics driven
8 1 Leap: Digital Savings Account onboarding
Key steps in the journey
0 operations; min to no data entry and all checks done by machines; 15% cash back; free Times Prime membership
Built fully in-house
Product Listing Page Step1:EKYC Step2:Profile Information
Built as micro-services; extended to partners
Emphasis on quality acquisition, activation and value creation
Step3:Funding Step4:VKYC Account creation 9 1 Leap: Impact metrics
Customer impact Operational impact Financial impact
All the figures are Indexed • Account opening TAT ^ • Physical documents required (in #) • Cost of acquisition
100 100 100 74 26% 75% 100% 25 0 Physical Digital
Physical Digital Physical Digital • True rate 125 100 25% • Customer Satisfaction (top 2 box) • NFTR **
136 Physical Digital 100 36% 100 100% • Digital activation 0 150 100 50% Physical Digital Physical Digital
• 3 months post national launch, digital accounts for Physical Digital ~10% of originations*; growing rapidly MOM 10 * retail SA (excludes government, trusts, salary) ^ TAT - Turn around time ** NFTR – Not First Time Right 1 Maximus (Digital PL): Impact metrics
Customer impact Operational impact Financial impact
All the figures are Indexed • End-end disbursal TAT ^ • Physical documents required (in #) • Cost of acquisition
100 100 100 99% 100% 85% 15 0 0
Physical Digital Physical Digital Physical Digital
• Fields to be entered (in #) • NFTR ** • Contribution to overall PL sourcing (%)
80 100 58% 98% 37% 21 pp 100%
2 0
Physical Digital Physical Digital H1 FY20 H1 FY21
• Digital accounts for 58% of new sourcing for H1 FY 21 11 ^ TAT - Turn around time ** NFTR – Not First Time Right 1 Mutual Funds: Impact metrics
Customer impact Operational impact Financial impact
• Purchase TAT ^ • Physical documents required (in #) • Digital contribution to fresh SIPs
100 100 48% 99% 100%
0 0 41 pp
Physical Digital Physical Digital 7%
H1 FY 20 H1 FY 21
• Physical fields to be entered (in #) • NFTR **
100 100
100% 100% 0 0
Physical Digital Physical Digital
• Non KRA KYC customers enabled for MF transactions 12 ^ TAT - Turn around time ** NFTR – Not First Time Right 1 Digital Business loan (GST example)
Key steps in the journey
5-8 min to disbursal; integrations for data; automated real time underwriting
Proprietary underwriting model
Generic Page Step1: Business Details Step2: GST Details
Built as micro-services; extended to partners
Delivering clear bottomline impact from better cost of acquisition
Disbursement & Account Step3:Personal Details Offer Page creation 13 1 Maximus (Digital BL): Impact metrics
Customer impact Operational impact Financial impact
• End-end disbursal TAT^ • # Physical documents required • Cost of acquisition*
100 100 100 99% 100% 71% 29 0 0
Physical Digital Physical Digital Physical Digital
• # Fields to be entered • Non STP ** • Contribution to overall BL sourcing (%)
53% 100 100 95% 71% 25% 28 pp 29 5
Physical Digital Physical Digital NSTP H1 FY20 H1 FY21
• Digital accounts for 64% of ETB sourcing for H1 FY 21 14 *sales sourcing cost ^ TAT - Turn around time ** STP – Straight through processing 1 Holistic digitization solutions for the Kirana ecosystem
The Indian retail industry is expected to reach $2.2 trillion by 2025; ~90% of FMCG retailing is in the form of unorganized kiranas All the major players like Jio, Walmart, Amazon are eyeing the local kiranas to unlock opportunities
Axis Bank aims to be the bank of choice for kiranas as The opportunities they make significant decisions around their ecosystem Millions of small retail stores ready to embrace technology - Demand for plug and play Omni channel retail technology - Adoption of retail best practices Continued Growth in non-cash payments - Demand for contactless & other digital payment solutions - Demand for Hyperlocal ecommerce
Exponential increase in transactional data - New consumers getting in the electronic mainstream - Terabytes of data available for mining and analysis The Axis Android EDC/POS terminal is designed to be a one-stop solution for kiranas Following our success in a limited pilot in Lucknow, expanded pilots are planned across the country
Two-phase implementation Metrics: Agra, Indore, Bhopal, 15,000 merchants • Throughput • Open market : Pilot with local distributor partners (Live) Vizag, Warangal, over a 6 month period • Activity rate • Pilot with an exclusive inventory fulfilment partner* - in Lucknow advanced stages (Expected go-live: Q4‘2021) • Months on board
*One of the largest digital super aggregators 15 1 Digital initiatives in Corporate banking are focused across 3 primary vectors
Bespoke • Focus on sector specific solutions and solutioning for bespoke needs of large corporates customers 02 • Commercialization at scale provides access to significant revenue pools
• Drive towards 100% registration across digital properties by digitalizing more processes • Reimagine journeys to make them • Upgrade to an ecosystem play more usable • Integrations with customers, partners and platforms for an integrated approach
16 1 We have put into place a comprehensive Internet Banking solution with a wide array of features
Key Features
• A/c Management • Vendor Payments • Salary Payments Complete overview of finances • Utility Bill Payments • Statutory Payments • Trade & Forex • Supply Chain • Shopping Mall End to end Visibility across authorization transactions Alerts and Notification Transact across products • Credit Connect • Commercial Cards • Investments
17 1 At the same time, we have also focused on specialised areas like Trade
• Remittance credited • Online platform • within an hour • Anywhere 24 X 7 • Online rate booking • Authorization on the move with • A1 / A2 remittances Mobile App • Bene addition
• Templated trxns • Paperless Digital • Bulk Upload • Digital LC • Bulk Approval • Digital BG Trade • Reports • Dynamic MIS Dashboard
• e-Softex • 1 stop solution for Software Exports • Paperless Imports • Export credit • Paperless Exports* • Import solutions
Large and Mid Corporates SMEs MNCs Start-ups
*Coming soon 18 1 We are building a strong and ever expanding API backbone
Vendor Salary Accounts & GST Recon Payee Balance Registration Mini Statement Payee Account Validation Receivable Statement Payments s
eCollections Tag Activation Eazypay Enquiry API NACH
Bill IFSC Check Fastag Payments CC/OD limits Biller GST invoices Registration Stop Cheque Bill Payments Others
19 Our Digital Bank strategy
Reimagine top Embed into 1 2 Transform the core 3 end-end journeys ecosystems
4 Data and analytics
5 People, processes, technology
20 2 Branch of the future: Frontline productivity enhancement
Objective Initiatives
• Frontline time spent on servicing and operations 1• Reimagine branch processes leveraging digital
100 2• Redefine frontline roles to focus on relationship management 36% 64
• Institutionalise Axis way; build data and tech enabled 3 From To operating rhythm
• Dil Se Open Branch model – new branch layout to focus on 4 customer experience • More time for relationship management • Better customer experience • Productivity boost 50+ Initiatives identified and underway
21 2 Operations transformation: Back office productivity enhancement
Process Capability Building & Automation Analytics Transformation competency development
Providing uniform & seamless Automation of processes Leveraging data analytics to Building quality culture and journey to customers by leveraging technology improve operational competency across bank efficiency
. Process transformation . RPA / AI for backend . Leveraging Big data to . Competency Customer Experience for CX enhancement processing build controls development
. System Validations / . Enhanced Early . Training & Up Skilling Mistake Proofing at front Warning Signals (EWS) end Model
30 large scale Operations Transformation projects have been identified across the customer life-cycle and internal controls (69% completion)
Customer Experience: Expansion of measurement across Retail Bank, Framework for Wholesale Bank being worked out, Measurement for subsidiaries being planned
Intelligent Automation Centre of Excellence (COE) being set-up to manage pan-Bank scale up of RPA and AI
22 2 Empower employee, release costs and enhance effectiveness
Details Benefits
• Intelligent, comprehensive, proactive and hyper- • Enable meaningful customer conversations via personalized employee tool analytics
• Covering 300 journeys across bank and subsidiaries • Empower managers to have control and meaningful Siddhi coaching conversations • Reduce opex and capex for the bank while delivering better frontline productivity
• Bring Your Own Device program, enabling staff to • Enhance staff mobility and enable work from use bank apps on their devices anywhere
BYOD • 60,000 personnel onboarded; average 3.5 lakh • Reduce infrastructure costs significantly leads delivered per month through 1.4 lakh activities/interactions • Higher productivity
• Flexible working arrangements • Structural reduction in costs
Future of • Giga program launched • Better employee satisfaction work 2.0 • Work from home and work from anywhere • Ability to attract new talent pools
23 3 Sankalp (SME): Reimagined journeys to deliver better frontline and back office productivity – Credit journey example
Key steps in the journey What makes the journey distinctive/ best-in class
• Single click pre-screening against knock-off factors in CCP like CIBIL, BQS • Instant rating for exposures up to `5 Cr. • Auto generation of sanction letter • One single application for Business/Credit/CBO team
Auto generated CIBIL System generated Digital rating tool reports Deviation Key capabilities built
• APIs with CIBIL, Hunter, MCA for pre-screening • Integration with Vendor Platform • Integration with E-forms • Real time covenant tracking by CBO
Auto generated Sanction Auto tagging of Red flag identification letter Authorities 24 3 CBG: Impact metrics
Customer impact Operational impact
• 50% reduction in end-end TAT • Due diligence TAT reduced by 75%
• Exposure based documentation reduces • 40% reduction in effort in creating credit appraisal document requirement for Small ticket loans memo
• Capability to upload documents directly on • Integrated systems – significantly lower manual customer portal which will reflect automatically operational effort required against the proposal
• No need to share bank statements; required • Significant reduction in audit observations given data can be shared in a secure manner using automation and system driven tagging net banking credentials
25 Our Digital Bank strategy
Reimagine top Embed into 1 2 Transform the core 3 end-end journeys ecosystems
4 Data and analytics
5 People, processes, technology
26 3 We aspire to deeply ingrain into select ecosystems and transform them
Ecosystems 2.0 Ecosystem 1.0 Partnerships
• Build organizational capability for • Fully integrated products • Jointly develop end-end ecosystem working with partners • Lifecycle services solutions • Product specific partnerships • Typically multiproduct • Typically bank + 2 partners Details • Focus on acquisitions • Deep integration with partners • Typically involve multiple products • Minimal integrations/typically and new product development redirections
• Aggregators • Flipkart, Google credit card • Merchant ecosystem – simplify • Payments partnerships Illustra- merchant procurement lifecycle tion • Healthcare: Make healthcare affordable and frictionless
27 3 Our API developer portal is live and hosts a full range of APIs
• Integrate with any ERP, App, processing engine Adaptability • Adapters for SAP PI/PO
Scalability • Ability to handle large volumes
APIs • Digital: RTGS, NEFT, IMPS, Fund Transfer for all modes • Paper-Based: Cash, Cheque & Demand Draft
Latest Integration • JSON Technology • SOAP Based
Flexibility • Seamless Straight through processing (STP & NSTP) • Provision to stage at bank portal for approval
Implementation • Dedicated implementation team for on-boarding Support • Dedicated tech support during development
24x7 • Round the clock tech support Tech Support Sandbox Seamless End point Free sign up environment production integrations • Compatible with advanced encryption methodology for UAT access Secured • Customized encryption logics and MLS supported
28 3 We have build multiple products partnerships across multiple partners
Neo Banking FD Credit cards
Small ticket loan Auto loan Merchant loans
Coming Coming Soon Soon
Representative partners
29 3 We have enabled full lifecycle of products (acquisition and management) on partner platforms – FD example
End-to-end FD acquisition journey, native on partner platform FD maintenance and servicing on partner platform
Email FD Advice Amount and PAN & Bank tenure detail selection validation
View FD balance Partial/ Full withdrawal
Aadhaar FD creation based e- success KYC View FD details – tenure, ROI etc
30 3 We are moving from ecosystems 1.0 to ecosystems 2.0
Ecosystem 1.0 Ecosystem 2.0
1• Typically product specific 1• Focus on customer lifecycle
2• 1-2 products 2• Multiproduct
3• Origination journey integration 3• Creation of new journeys – involving financial ………………… product and core product
4• Acquisition orientation 4• Integrated customer solution
5• Typically Axis + 1 5• Typically Axis + 2 or more
6• Economics driven by financial services 6• Economics driven by customer lifecycle product profitability; many times acquisition value oriented
31 4 We are working with partners to build out a merchant ecosystem
The ecosystem will deliver value to each entity Axis bank aims to offer a suite of products delivered through
• Improved retailer coverage • Improved working capital cycle and shelf space • Increased sales to retailers • Higher sales to distributors • Up front payments from merchants Current Account Payments Financing
• Custom integrated offerings for all entities Corporate Distributor • Seamless Digital on-boarding with unified KYC
Ecosystem • Instant funding with enhancements linked to business growth
• Fostering synergies between ecosystem entities enabling Retailer Axis Bank credit access and flexible payment terms
• Ease of access to funding • Low cost funds • Longer payment tenures • Enhanced underwriting • Ease of payment collection • Improved risk management with from customers transaction monitoring
32 Our Digital Bank strategy
Reimagine top Embed into 1 2 Transform the core 3 end-end journeys ecosystems
4 Data and analytics
5 People, processes, technology
33 4 Today, Bank leverages analytics at a large scale
Bank covers wide spectrum of analytics … … covering most of the organization
Driving business growth through budget Credit Cards & Payments Business Analytics planning, pricing strategy & product engineering Rural Lending Retail Lending Retail Banking Branch Banking Enhance customer engagement through omni SBB Lending Marketing Analytics channel marketing campaigns Retail Liabilities & IPG
Deliver personalization experience for customer Commercial Banking Treasury Digital Analytics service and cross sell via analytical frameworks Wholesale Banking Coverage Group Corporate Banking Help detect and reduce fraud cases across Wholesale Banking Product Financial Crime Analytics different products by robust real time rules Digital Banking
Increase operational efficiency via better Operations Analytics resource allocation & process re-engineering Risk Underwriting & Policy
Building dashboards to help teams track Financial Crime HR Business Intelligence business across different segments Corporate Center Operations Audit
34 Business aligned teams Centre of Excellence 4 We are fairly advanced in our analytics maturity curve
Analytics Sophistication
Data Descriptive Prescriptive Predictive Optimizations Artificial Management Analytics Analytics Analytics Intelligence
Built capabilities to 1.5+ petabyte data 9k dashboards to 100+ use cases 12 models live Pricing monetize bank’s spread across 250+ 48k users helping business for decisioning optimization unstructured data – analytical marts decisions to tab credit risk driven for forex text, speech & images 14 propensity 5000+ data pipeline Self service Route 1000+ man hours score cards for jobs enriching data dashboards and optimization for saved by deploying business layer everyday new age tools cash vans AI pipelines leveraged revenue growth 2nd gen data lake 30 data base up and running, 1st programs launched gen data architecture leveraging the Oracle serving core behavioral & use cases marketing scorecard
400+ strong techno functional team with comprehensive skill sets Roles Tools Talent
Average employee age of 2000+ man hours of instructor led training Business Analyst Data Scientist 28.5 years Structured campus hiring programs from 50% have Masters and IIT, NIT Business Intelligence Data Engineer Post Graduate degrees 35 4 Significant business impact been created through data driven decisioning
72% of retails loans are 71% of credit card sourcing is `4.5k Cr of Home Loan BT decisioned via proprietary done via our database stopped in this FY till machine learning models programs September end
9000 reports published across `890 Cr increase in credit limit `43 Cr YTD savings 80 verticals and consumed by for 1.8 lakh cards via our limit in fraud via robust alerts 48k employees management program framework
36 4 Setting up the right data infrastructure
Superior Machine Learning Models Hadoop Cluster with scale of Petabyte
• Ensemble Machine learning model • Real time big data capability with petabyte scale • More than 2000 attributes considered • Live with 100’s of big data use cases • 120% better GINI than generic bureau score • Live with cloud decisioning platform
Proprietary Application Score – Lift Chart Blaze on cloud live – Decision Management Scaleup 100%
80%
60%
No Model 40%
Cum Bad % BadCum App HIT Cibil Score 20%
0% 0% 20% 40% 60% 80% 100% Cum Good %
37 Our Digital Bank strategy
Reimagine top Embed into 1 2 Transform the core 3 end-end journeys ecosystems
4 Data and analytics
5 People, processes, technology
38 5 Building the right team with right talent
110 + 75%
.. member strong in-house …new hires from non-banking background tech team • Fintech’s • Consulting • E-commerce • Campus • Design • IT • Others 800 + • Developers – Front-end, back-end, full stack .. across roles forming full service teams
• Dev-ops • Product • Partnerships …people dedicated to digital agenda • Engineering • Governance • Design • Channels • Digital marketing • Others
39 5 Enabling the team through right technology and process
Agile product development lifecycle Continuous deployment Micro-services based architecture
Plan Plan Operate
Maintain Analyse
Code Deploy
Test and Continuous integration Continuous delivery integrate Design Build Release
Implement Test
• Cross-functional teams with end-end ownership • Operating rhythms across daily huddles, development sprints • Automated user testing setup
40 Thank you