Axis Bank’s FY 20-21, Q1: Digital banking numbers soar
The digital retail banking remains to be a major contributor to fee income; Axis Bank registered decent numbers in the areas of digital products and payments inspite of an impending difficult environment
In the FY 20-21, Q1 results announcement, Axis Bank stressed on the importance of the digital prowess of a company to be one of the major determinants to ride the tough times to come. The bank also shared some numbers on the digital banking front. The retail remains to be a major contributor to fee income. The retail digital banking fees is one of the top segments in the fee generating avenues for the bank. Inspite of the tough environment, the retail digital fees income grew on a YoY basis. “Even in this environment, there were certain fee line items which grew on a YoY basis. The top segments are insurance distribution fees, merchant forex income in transaction banking, and Retail Digital Banking fees,” the bank said.
Axis Bank’s digital banking strategy: Staff, products and channels
A significant progress has been made towards enabling the employees digitally. A BYOD program was launched. It is now being rolled out to 36,000 frontline staff. The frontline staff was enabled with access to critical systems such as CRM on mobile devices, enabling the vast majority of the team to be active during the COVID times as well.
Axis Bank has now added 100 employees in their digital team comprising product managers, developers, designers, digital marketing specialists etc. 80% of the digital team comes from non-banking backgrounds such as consumer internet, fintech etc. A significant progress has been made in simplifying core tech architecture, becoming cloud native and moving to an agile mode of development.
Heavy uptake in Digital Products
Digital products now contribute a significant proportion of the Bank’s sales with 78% of SA, 75% of FDs, 65% of PLs, 51% of credit cards, and 48% of new MFs in Q1 sourced digitally. During the quarter more than 2.12 lakh digital savings accounts were opened. “We have launched video KYC based ‘Full Power Digital Savings Account’ that can be opened instantly and provides access to 250 + services online. Onboarding for the full suite of banking products leveraging Video KYC will be launched in a phased manner over the year,” the bank said. This quarter also saw the introducction of a number of digital products offering new investment, loans and insurance options for customers. The Digital Collections infrastructure and capabilities were also ramped up.
Growth in Digital payments
Axis Bank continues to maintain a strong position in the digital payments space. “We are now the second largest remitter & PSP bank in the UPI ecosystem and the second largest remitter bank in the IMPS ecosystem. In credit cards, the monthly spends have reverted to 75% of pre-Covid average spends,” The bank said.
Transaction growth on Digital channels
The digital channels helped to serve customers during the COVID period. After an initial dip, activity and transaction volumes on digital channels is now back to pre-covid levels. In fact in certain areas such as Fixed Deposits and MFs, the bank saw a growth of 20%+ on the digital channels through the covid period.