How AU Small Finance Bank is serving customers with an innovative tech strategy

With increasing dependence on technology innovation, it’s no surprise that financial services and transactions have moved onto digital platforms to keep up with changing times.

For AU Small Finance Bank, an entity building on aspirations to be the most customer-centric tech-led digital bank, technology is not simply an option, says Ankur Tripathi, CIO. He believes that the reliance on technology has increased because of the pandemic, with increase in UPI payments and involvement of the millennial population.

“Customer-centric acquisition, product designs, in-house optimisation, and efficiency needed at scale are practically impossible without some tech initiatives. That has further propelled the initiatives we have taken in the bank,” he says.

Innovative tech strategy

AU Bank’s tech strategy is not standalone, Ankur says. “We are working in line with our business strategy to build a low-cost, stable, and long-term deposit franchisee and build the lending capability to lend with lots of ecosystem data.” The bank’s technology roadmap is centred around how to roll out solutions digitally, he adds.

“We are the first small finance bank to launch a credit card this early in their journey,” Ankur says, adding that the reason is that owning a credit card has become a necessity today. Understanding the penetration level of digital payments in urban, semi-urban, and rural markets led them to launch their QR and onboard merchants on their QR platform.

Optimising tech to serve underserved communities

AU Small Finance Bank’s 0101 application is a retail digital bank with both banking and lifestyle features. Non-customers can perform transactions, open a bank account or a fixed deposit account, and even obtain a credit card.

AU Bank’s video banking option, which arose from the need to serve customers remotely, has proven to be revolutionary. “We take pride in probably being the first in the industry to launch this,” says Ankur. Their video banking platform also mirrors the interactions that occur inside the bank, proving to be very useful during the pandemic. Several services that require a customer to walk into a branch, such as in-person verification, updating nominees or mobile phone number, can be offered via their video banking option, he adds.

Additionally, Ankur says, the bank is enabling merchants to get onto a digital payment ecosystem via their UPI QR. This replaces the need for traditional transaction recording methods as the QR allows them to understand their transactions. “This is how we plan to serve the unserved in the financial ecosystem,” he adds.

Adopting the digital route

The 0101 application meets the customers’ need to have a digital interface, Ankur says, adding that “the interface is so easy to use that it is getting organically adopted”.

He says that 90 percent of their savings accounts have been opened digitally because it is a hassle-free paperless process that is approved and verified within three-four hours. This is, in his opinion, adding to customer satisfaction as it provides instant gratification. Similar use cases exist in their lending and loan origination processes as well, he says, adding that digital verification cuts down on the usual wait time and enhances the productivity and efficiency of the on-ground workforce.

This also contributes to automatic adoption of the digital route as all their banking processes have been getting digitised, he adds.

“Since the launch of 0101, the bank has acquired more than one lakh customers through our video banking platform. About 50 percent of them are salaried and from urban geographies, and almost 60 percent are millennials,” says Ankur, adding that they have been able to acquire more than Rs 400 crore in deposits.

Although they have a good talent pool of in-house developers now, Ankur says that technology talent and resource acquisition had been two initial challenges they faced. He notes that ramping up resources is still a challenge in the industry today.

Future initiatives

Ankur says they are looking to add some incremental features to their 0101 offerings and are looking to launch a digital bank similar to 0101 for merchants and MSME customers. They are also participating in an open framework to lend to merchants in real-time.

On the core technology side, Ankur says, “Our thought process is that all our customer-facing applications that can move to Cloud should have proper DevSecOps processes so that the agility and scalability needed to address transactions and user adoption should be there.”

One cannot imagine the banking process without adopting a tech strategy, says Ankur, adding that it is “a real necessity to stay relevant in the future”.