Why cloud was vital in Axis Bank's transformation agenda

Axis Bank is on track to take 70 percent of its applications and infrastructure on the cloud in the next two years, said Amitabh Chaudhry, CEO and Managing Director of Axis Bank. Last year, its management decided that all new customer-facing apps will be cloud-native.

"Today, 15% of the bank’s apps are on the cloud," said Chaudhry at the AWS Summit Online India on Tuesday. Axis Bank has 240 million customers and processes around 50 million transactions a day. The process of upgrading its technology infrastructure and applications for the cloud is necessary for Axis Bank's transformation to be future-relevant, he added.

When the pandemic led to lockdowns in India last year, Chaudhry said the bank anticipated hyper-growth. It created a dedicated cloud-ready infrastructure to handle the volume of UPI (Unified Payments Interface) transactions.

Unsurprisingly, Axis Bank had a 20 percent share of the monthly UPI transactions which clocked 2 billion transactions in October 2020. It has also improved the quality of deployment and security in the past year, Chaudhary added.

In effect, while customer satisfaction rose by 35 percent, costs were lower by 24 percent, he said. “Already 15% of our new accounts are completely digitally-opened,” Chaudhry added. Axis Bank ended financial year (FY) 2021 with Rs 80,848 crore in revenue. It's net profit (Rs 7,252.4 crore) was 286 percent higher than in FY2020 (Rs 1,878.75 crore).

Elements of Axis' technology-led transformation

Axis Bank’s focus has been on three key elements. One, reimagining customer journeys, which is about giving them distinctive experiences. In this context, Chaudhry (who was appointed Axis Bank CEO in January 2019) said he is proud that its app is the highest-rated amongst peer banks and financial institutions in India.

The second element is upgrading the bank’s core technology infrastructure to make it relevant for the new age, where cloud has been a vital factor. And the third element is about delightful employee-experience. “The technology led simplification of operations should enable our employees to become more efficient and effective both internally, as well as externally for our customers,” Chaudhry pointed.  

The future of banking, he said, is about becoming invisible, embedded and unbundled. Customers want to buy a house, a car, the latest phone, but do not want a loan. “In the future, financial services will be embedded in the customer purchase journey,” he said. “Partnerships will be critical to success.”

While software is eating the world, the banking industry is dining with it, he added. “We are learning to live with each other,” Chaudhry stressed. “And we have no choice but to live with each other.”

Chaudhry, a B.Tech from BITS Pilani and an alumnus of IIM Ahmedabad, has diverse experiences in banks and technology-services companies like Bank of America, CALYON Bank, and Infosys. “Successful banks will evolve into something which looks like a good tech company,” Chaudhry said.

A bank won't decide its offerings to customers, but will create the platform for customers to choose what each of them wants. “With hyper-personalisation, sachet-isation of financial products, we are rapidly moving to this particular normal,” he asserted.

Axis Bank’s digital scoreboard

Axis Bank has been undergoing a silent digital revolution in the past 18 months. On the products front, a significant proportion of Axis Bank’s sales is digital.

With 73 percent of the customers being digitally active, Chaudhry said that more than 70 percent of the bank’s deposits and 50 percent of personal loans and credit cards are sold fully-digitally. These are end-to-end digital fulfillments, where customers come to the bank’s digital properties and platform to fulfil their needs. The bank offers 250-plus services on its digital channels, and almost 90 percent of the transactions are digital.

Axis Bank has close to 800 people focusing on digital only. It has built an in-house team of 125 people running petabyte-scale analytical models.

Chaudhry reiterated that executive sponsorship is necessary. “Tech transformations need a leap of faith, and that commitment has to come from the top,” he said. Building a strong in-house and new-age talent base is also important, alongside people who understand the context and get things done.

“There is a need for people who push the existing system and make lives uncomfortable for the management team,” Chaudhry said. Building proprietary in-house capabilities is vital. “We believe distinctiveness and differentiation will come from having something proprietary to us,” he added.