Axis Bank Ltd, which embarked on its digital journey about six years ago, is now implementing a series of measures that include self-service kiosks, Aadhaar-based customer services, and automation—all aimed at increasing the momentum of its digital transformation journey. The bank has installed digital self-service kiosks, which it has christened “speed banking” services, at over 1,000 branches (out of a total of around 3,400 branches), in addition to deployment of 25,000 biometric readers across its network to adhere to eKYC (electronic know your customer) norms in new account sign-ups and other Aadhaar-based services.
The idea, insisted Rajiv Anand, executive director of the bank, in a recent interview, is to “drive digital at scale”. “While a lot of conversations in digital are around mobile apps or the front end, we are focused on what goes on behind the scenes. Unless you fix the back-end, it is like putting lipstick on a pig,” he added.
Axis Bank, for instance, has provided 16,000 tablets to its customer officers in its branches. This, according to Anand, will help customer requests and updates to be done digitally rather than first asking users to fill up a form, and then sending it to a central team, which is a “time-consuming routine”.
According to Anand, 85% of household current and savings accounts are now opened through tablets—out of which 50% are done using eKYC. “Nearly 75% of all our transactions are in an instant gratification mode, wherein they can be done at the branches either using biometrics (through Aadhaar linkage) or via the one-time password received on the mobile,” he added.
Axis Bank started its digital journey five-six years ago, according to Anand. “In the first phase, we took a 90,000-feet view of process redesign—what to centralize, what to keep in the branches and getting the organization realignment done,” he explained. The second phase was about “lean and business process re-engineering”, including robotic process automation (RPA). The focus was on getting it right the first time. The third and fourth phases, currently under way, involve “digitization at scale” and the use of new-age tools like RPA, machine learning (ML) and artificial intelligence (AI).
One of the key initiatives of the bank is a project called Pratham, in which it took a relook at 125 “customer journeys” (such as opening a bank account, getting a credit card or taking a loan) in an attempt to realign the processes to match customer expectations. Another project, Saksham, saw Axis Bank put a “new software layer” at its branches, using the Finacle software from Infosys Ltd as the foundation and integrating multiple business applications into it.
The genesis of the project goes back four years to a visit to Australia by Anand and his senior colleagues. There, they studied how the Commonwealth Bank of Australia used a similar approach and got a “big competitive advantage” at branches “by the kind of software used”, recalled Anand. “After studying their approach to speedy customer management, cross-sell opportunities and ease of transactions—all of which were better through their customized software—we came back and built our own software layer.”
According to Anand, “50 lakh financial transactions” are being done on Saksham on a monthly basis. “What we have done essentially is hidden the complexity of multiple software in the back-end and brought simplicity and ease-of-use at the front end,” he said.
Having “reimagined” its processes and put in place the necessary “digital infrastructure”, the next big step for Axis Bank, according to Anand, involved automating certain processes using robotic and AI tools. For that, it did “a strategic tie-up” with WorkFusion Inc., a US-based provider of automation solutions. “We looked at three key things from an RPA perspective: internal efficiency, customer satisfaction and risk containment,” he said. Initially, a core team from WorkFusion’s New York office along with some data scientists from Russia visited Axis Bank and stayed on for three-four months to help with the implementation process.
This is how the RPA solution works. Not all customer documents received by Axis Bank are digital. Data entry and checking of about 50% of customer documents are done manually in the back office—a time-consuming, error-prone process. With the RPA solution, the data is captured from the support documents—such as passport, driving licence or other KYC papers—with the optical character recognition engine embedded in the RPA solution and then this data is matched with the information in the customer form. The output of this automated matching is presented in the form of a simplified report to the bank analysts whose job now becomes much easier: rather than painstakingly match every single piece of data, they only need to look out for mismatches and take corrective action if need be.
“Our view is that rather than eliminate the human touch from this process, we wanted to reduce the time taken to do the matching. After RPA, what used to take 15 minutes now takes only 2-3 minutes,” explained Anand. Further, in order to optimize the training of the ML algorithm of RPA, the bank takes process data of its top 50 analysts and feeds the same into the solution. “We have a 300-member team that looks at these forms, but taking the learning of the top 50 or 60 guys will ensure that when we are building the algorithm for future use, it will give us optimal results.” It is well-known in ML that the quality of the desired output for a process is directly proportional to the quality of the data set used to train the algorithm.
Thus far, Axis Bank has identified 90 such processes where RPA is being applied, with 10 processes already using the solution and the remaining being tested. For instance, account modification in retail banking and checking of the documentation for letter of credit in corporate banking have been automated using RPA. The bank plans to automate all the 90 processes in about nine months. Using RPA, Axis Bank has been able to reduce “the turnaround time on savings account opening by about 90%; on current accounts by 92%; and on various other processes by 50-80%”, according to Anand.
Most banks in India, especially large private sector lenders such as HDFC Bank Ltd and ICICI Bank Ltd are at different stages of digital readiness—all in a bid to meet customer needs in an era when banking is moving to online and mobile clicks rather than physical footfalls.
“As India moves towards a less-cash economy and the adoption of the internet, and mobile continues to grow, the efforts of banks at digitization will have a more pronounced impact, especially in financial inclusion in rural areas. More process automation will certainly result in faster processes and better customer service,” said Arjun Bhuwalka, senior manager at Aranca, a global research and advisory firm. He added that as more banks advance in their digital journeys, the competition will only get intense, especially among large private sector lenders that are seen to be ahead in digital compared to their public sector peers.
Axis Bank’s Anand believes that the differentiator is “execution” and “being able to understand what all technology can do for you”. To sustain its tech efforts and keep the learning in-house, the bank has created a Centre of Excellence comprising members from its technology team, transformation team and solution partners such as Infosys and WorkFusion. Next on the cards for Axis Bank is a chatbot, which is in beta and would soon be rolled out (in partnership with a company called Active.ai). The bank is also “pivoting” its innovation lab in Bengaluru, called Thought Factory, into an AI-focused initiative. “We believe AI has a big future,” said Anand.