Business Segment

Message from Management

"We have already seen the results of the transformation efforts that have been underway in the Bank in the past couple of years. A strong balance sheet, normalised credit cost and a revamped operating model that we have in place sets us up well for the coming years."

Subrat Mohanty

Group Executive - Banking Operations and Transformation

Dear Shareholders,

A core objective of the transformation underway at our Bank is to make it ‘future ready’. For us this translates to three work streams – a) strengthen our core systems and processes so that they can take changes in our business environment in their stride, b) understand and anticipate the trends in technology and consumer behaviour and continue to invest in new ways of banking and c) lead the way in being a responsible corporate citizen. We made significant progress in each of these areas during the past year. We accelerated on growth in our focus segments, created strong digital business platforms for Retail and Small & Medium Businesses (SMB) customers and launched two bankwide distinctiveness programmes. We did these in a year where the impact of the pandemic was ongoing and the everyday lives of our customers and colleagues were disrupted. We have already seen the results of the transformation efforts that have been underway in the Bank in the past couple of years. A strong balance sheet, normalised credit cost and a revamped operating model that we have in place sets us up well for the coming years.

There are two key stakeholders in our transformation efforts – our customers and our colleagues. We are focused on creating journeys for our customers that are intuitive, that reduce their effort to bank with us and that engage with them uniquely. We should be simple and easy to deal with for our customers – that’s the guiding principle for the future ready operating models we are building. In a similar vein, we are enabling our colleagues with customer insights, product knowledge and servicing tools that help them offer the most relevant financial solutions to their customers. This isn’t restricted to helping them with the ‘hardware’ alone. We are also building a culture of customer obsession with a defined set of behaviours that will guide our interactions with our customers. Of course, these things are easier said than done. We have a series of initiatives to cover these areas with identified leaders who are leading them from the front.

I will share with you a few examples of what we are doing to make these efforts come alive for you. These are by no means exhaustive but I expect it will give you a flavour of our Bank in transformation.

Reimagining customer and employee journeys

We have institutionalised an agile, cross-functional approach to create end-to-end digitised customer journeys. Over 30 critical journeys across Retail Lending, Cards and Payments, Retail Liabilities and Wholesale Bank have been taken up in the past year. We are working backwards from understanding customer needs, benchmarking journeys with global best-in-class companies and investing in technology to reimagine these processes. We expect to complete the work on these 30 journeys by March, 2023. We have seen encouraging results over the past year in our onboarding journeys for deposits, FDs, personal loans, credit cards and merchant acquisition. For example, the reimagined merchant onboarding process has led to reduction in time taken for the merchant by over 50% and increased sales force productivity by 33%. A more detailed set of metrics is outlined in our Digital Business update presentation that is available on our website. We will continue with our investment in this area.

We accelerated on growth in our focus segments, created strong digital business platforms for retail and SMB customers and launched two bankwide distinctiveness programmes.

As I mentioned earlier, we are also working to empower our colleagues with the right technology enablers to improve their effectiveness and deliver customer delight. A comprehensive employee platform, 'Siddhi', that provides real-time access to key information and insights, nudges on pending tasks, and tools to service customers instantly, has been built to help our employees enhance the quality of their interactions with customers. 300+ staff journeys across Bank and its subsidiaries are in the ambit, and we expect this tool to significantly improve workforce productivity and reduce costs. The first phase of 'Siddhi' has been rolled out and we expect the remaining three phases to completed by March, 2023. This is a powerful employee ‘super app’ and we expect this to change the way we work and engage with the customer in the field.

It is important for us to keep score on the tangible benefit we are seeing in our business because of the investments in these initiatives. We must keep things real. If something isn’t delivering to our expectations, we either rework the premise or we terminate that initiative. I am happy to share that we are seeing strong indicators of success already and we have a visible scorecard to track the real benefits of the work we are doing. For example, we have seen 20-35% reduction in unit costs by moving from physical assistance to digital assistance in journeys like savings account opening. The raft of automation initiatives we have launched has already yielded around ` 30 crores of saving this year and we expect more in the coming years. The ‘Branch of the Future’ initiative that is meant to transform the way our staff engage with and serve our customers is bearing early results. Over the past 2 years, we have worked on re-engineering key service requests to release frontline capacity from servicing, and move them towards relationship building. Around 90% of digital requests are processed via straight-through processing thereby saving time for tellers and BROs (Branch Relationship Officers). With increasing adoption of initiatives, we will have branch staff devote over 40% of their time on customer engagement. Our digital enablers for Wholesale banking RMs have resulted in a marked increase in time spent on client engagement, with 17% capacity released by automation of administrative activities and over 10% of time reduced through digitisation and simplification of activities.

We will continue to share the real business impact through the year as we go-live with newer journeys.

A resilient, predictable and adaptable technology stack

You will recall that we had launched a large scale technology transformation programme in October 2020. We have taken a twin-engine approach to (a) upgrade our legacy IT stack to make it digital ready, and (b) build a bestin-class end-to-end digital stack. Our vision for 2025 is to transform our engineering practices, achieving 30% faster time to market, adopt Agile/ DevSecOps in nearly 80% of projects across the Bank, and enable 70% of back office processes with automation for higher efficiency

In line with our OPEN banking philosophy, we launched a wide range of API banking solutions this year for our retail and corporate customers/ partners to use our banking services integrated on their platforms. The Corporate API product suite offers a digitised corporate onboarding journey, with quicker self-registration, digitised UAT access requests and other features for our large corporate and SMB customers. Our API suite now has over 250 Retail APIs and about 60 Corporate APIs. We have a strong pipeline of more APIs as we add further journeys as part of this programme.

One of the key initiatives launched last year was Subzero design - a collection of guidelines and components to create a unified experience for all Axis Bank customers. Subzero will help reduce design and development time by 20%, and provide consistency across customer journeys.

Our commitment to the transformation is also visible in the people investments made in the past couple of years. We have significantly added core engineering, architecture and product talent to the team. The technology team has grown by over 75% in the last 2 years.

Our commitment to the transformation is also visible in the people investments made in the past couple of years. We have significantly added core engineering, architecture and product talent to the team. The technology team has grown by over 75% in the last 2 years.

Personalisation at scale

We have built a dedicated team consisting of data scientists, data engineers and business analysts to deliver personalised attention to our customers. Over the years we have used our strong data analytics capabilities across the business functions for improving cross-sell, anticipating customer needs, helping collections, spotting frauds and operational optimisation. We are now reworking our data architecture model and using alternative data sources to shift our game to the next level. We have created a personalisation platform that can help customers with more self-service capabilities and help them with real-time nudges to improve their experience. We are also using our superior analytical models to help a large number of our partners extend our products to their customers. For example, we used alternate data and analytics-driven insights to scale up “Known to Bank” (KTB) lending and added 4.2 lakh partnership cards and 1.5 lakh BNPL accounts during the year. Big Data Lake is now an integral part of our data analytics landscape and we have made significant progress towards further enhancing our Data Stack with ability to analyse and serve on Cloud. We are aiming to make customer journeys more impactful and personalised, by building a comprehensive DNA mapping of customers and a rich nudge library.

Sparsh –Customer Obsession programme to drive distinctiveness

Our work on re-engineering customer journeys is only one part of the broader agenda of Sparsh, our customer experience transformation programme. We are also empowering and training our 85k+ strong staff to become delight advocates. We are building institutional capabilities to capture the voice of the customer and strengthening our ability to measure and act on customer feedback. In order to ensure that customer obsession is embedded in the culture, we have made several ground level interventions over the course of the past year. These include initiation of deep work in select channels, ‘Inspire’ sessions with customer service leaders from the best global customer-centric organisations, workshops to cascade the message of Sparsh to the top 250 leaders, and thereon to the 4,500+ branches. We have been working to engage our frontline staff in the ideation process, helping cement their sense of ownership, and have given public recognition for employees who live the Sparsh behaviours. With all of these initiatives, we believe we have set in motion the process of embedding customer obsession in our Bank.

ESG and our role in the society

We have scaled up our Environmental, Social and Governance (ESG) capabilities and performance by integrating ESG topics into the agenda of the key Board Committees. We have an ESG Steering Committee comprising heads of key departments who act as ESG champions and help drive significant mandates across the Bank. We have also seen an improvement in our ratings across leading external ESG assessment platforms like S&P Dow Jones, MSCI and CDP during the year, and we continued to feature in the prestigious FTSE4Good Emerging Index for the fifth consecutive year in 2021. I am happy to report that we also emerged as a national winner in the ESG India leadership awards of 2021.

We continue to place high importance on managing compliance risks. The Board and top management are leading by example in driving a robust risk and compliance culture. We are working on bringing technology and data science driven working model in assurance functions during the coming year. We plan for control functions to be forward-looking, providing oversight as well as insights on future risks, including those related to our strategic focus areas. We have a comprehensive framework to strengthen the risk and compliance culture within the organisation.

To conclude, we are on a strong upward curve on our transformation journey. We are eager to do more as we see the success of the initiatives changing the way we work. There’s hunger and desire to create a future ready Bank that is seen as distinctive. We are on our way

Warm Regards,

Subrat Mohanty

Group Executive - Banking Operations and Transformation