BrandZ Analysis – C-suite Interviews
Managing Director and CEO
How has the current moment caused Axis bank to transform (or accelerate existing transformations) -- both in its consumer-facing services and also in its internal approach to doing business?
The words “unprecedented” or “difficult times” have often been used to describe the situation we are in, even six months into the lockdown. In recorded human history no single event would have caused so much disruption that has affected every single country on the planet.
However, the character of any individual or institution is best manifested during a crisis. And I am happy to state that in these crucial times, Axis Bank stood not just with its customers, but with all its stakeholders, including employees, partners, and the community at large.
Our Brand philosophy “Dil Se Open” and the various campaigns we launched during this phase truly encapsulate the spirit of hundreds of our branch employees who were physically present for our customers during the lockdown. More than 99 percent of our branches and 96 percent of our ATMs, our back offices, and call centers remained functional during the lockdown phase, providing all essential services to our customers. In this phase, our Customer Service Managers and Relationship Managers have been constantly in touch with more than 3 lakh customers on a daily basis to assist them in every way possible.
While it is true that the pandemic did fast-forward many critical processes, as an institution, “customer-centricity” has always been at the center of our ethos. Consequently, at Axis Bank, we were agile and quick in responding to this rapidly evolving and uncertain situation. We activated the Central Emergency Response Team (CERT) more than a month before the lockdown, seamlessly moved to a “Work from Home” environment for a majority of our people, enabled IT and infrastructure to address all critical activities, and ensured that customer services go unhindered. The Bank’s digital channels - our award-winning mobile app, internet banking portal, Axis Pay (our UPI app), corporate internet banking, and our website – helped people access more than 250 products and banking services digitally, with a few clicks.
We also supported the government and citizens in this tough phase. As part of our government services, for example, we extended help in Odisha and other states to service all citizens. Similarly, we were associated with the Directorate of Municipal Administration Goa for door-step house tax collection, as enabled by our POS machines.
Internally, we reinforced our long-term GPS (Growth, Profitability and Sustainability) strategy with near and medium-term imperatives to address COVID related challenges and mitigate the adverse impact of the associated economic slowdown. These imperatives have helped the Bank in addressing the requirements of different customer segments, identify and draw action plans to double-down in select businesses and sectors, while strengthening our focus on portfolio management, capital conservation and profitability. The medium-term imperatives impart greater focus on accelerating progress in the digital space, reshaping our HR practices in line with future of work, and rethinking risk management practices. These imperatives have accelerated the digital enablement of our frontline resources through bring your own device (BYOD), launch of a revamped Digital Savings account and leveraging digital and phone banking channels to engage and serve our customers.
You joined Axis Bank in early 2019. You couldn’t have known then that you’d be steering the bank through a global pandemic. But were there any experiences or initiatives from your first year at Axis Bank that have proved crucial to how the bank has met the challenges of this current year?
Last year, we had laid down our Vision and Strategy, which has stood the test of time and is guiding us even in these difficult times. We had committed ourselves to the strategic mantra of Growth, Profitability and Sustainability (GPS), which is as relevant today as it was when we conceptualized it. The GPS strategy, along with our values and the “One Axis’ framework, form a strong foundation that has truly helped us navigate the last few months of turmoil and guide us as we move forward. Our emphasis on S (Sustainability) has served us well through these troubled times.
The Bank’s operating performance has been tracking well to the GPS objectives that we had laid out for ourselves and am happy to state that we are all set to leverage every opportunity that comes our way as the economy opens up. Further, we bolstered our strategy with several near- and medium-term imperatives to help the Bank navigate the COVID crisis and emerge stronger from it.
One of the things that stood out during this phase was the kind of fabulous talent that the organization housed, at all levels. I am referring to all our employees across functions and branches. We have the best employees one can think of who exhibit compassion and empathy, both internally and while dealing with our customers and partners, and have gone beyond the call of the duty on many occasions. In fact, our customers have acknowledged this through their appreciation time and again. I take this opportunity to call out our employees, who have been the strongest pillar of support during these times.
How has Axis risen to the challenge of growing more with less – creating demand, and offering new value propositions, in times of economic headwinds?
We are on a journey to transform the bank into a prudent and conservative franchise. Having said all this, we will pursue growth wherever we see an opportunity. We will use the time to ensure we capture the right opportunities that present themselves. We believe that we will grow our market share over the short- to medium-term.
Another element that has truly stood out in this period, is our strength in the digital space. We were the first to have a separate digital team in place and we will continue to invest in this area. 80 percent of our digital team comes from non-banking backgrounds such as consumer internet and fintech. Our focus has been on scaling direct to customer (D2C) products and digital channels as well as enabling our staff digitally. We have also made significant progress in simplifying our core tech architecture, becoming cloud-native and moving to an agile mode of development. All these investments are starting to show tangible results across the Bank.
Over 70 percent of our fixed deposits, 53 percent of mutual funds, and 50 percent of business loans are sourced digitally, and 40-45 percent of PL and credit cards are digitally sourced. We are digitizing at every level. For our staff, we have recently rolled out “bring your own device,” which has now been rolled out to 36,000 frontline staff.
Recently, with Mastercard and Worldline today, we launched “Soft POS” to become the first financial payments service in India to transform everyday smartphones into merchant Point of Sale terminals. We are the first Bank to on-board a school on BBPS, an innovative digital solution that brings convenience, efficiency, and security to businesses for recurring payments. We have launched the “Full Power Digital Savings Account” that can be opened instantly with Video KYC. Keeping in mind the need of the hour, the product proposition provides access to more than 250 services online and a virtual debit card through which customers can start transacting immediately after opening the account.
We are building digital capabilities on the SME and corporate side as well, where we are building an omnichannel solution for corporate customers. The last few months have greatly accelerated our transition into the digital.
How do you see the changing banking landscape with now that small finance banks and fintech have entered the fray? Will the levers of growth change, and is there a need to lay a fresh roadmap for growth?
All of us have been talking for many years about fintech, small finance banks, and the general role that technology will play in banking and financial services. I have always believed that so long as an entity has a value proposition which connects with the customer, it will grow and gain market share. Banks are not going anywhere – they are here to stay, though there is room for other entities as well.
With regards to growth, the global growth environment was challenging even before the pandemic hit us. The contagion has affected both lives and livelihoods, which has resulted in a huge shock for the economy. The authorities are relentlessly working to address the challenges that have emanated in the banking and non-banking financial space. Both fiscal and monetary levers have been put into action to give confidence to market participants. The Monetary Policy Committee has responded with large cuts in the repo rate, has kept system liquidity in surplus, and shown readiness for further rate cuts.
The key lies in firing all cylinders of growth: consumption, investment, and exports. But first things first; we need the pandemic to be behind us for substantial dialogues on growth and recovery to happen.
Brand Purpose connects the consumer at an emotional level and strives to achieve business goals and benefit society. How do you think Axis bank has been able to build Purpose over a period of time?
Every business must serve a social purpose. At Axis Bank, we believe that having an authentic sense of purpose – a reason “why” we exist beyond the desire to make profit – drives commercial value in a hyper-competitive world. And we pursue it as a passion and not a job. Our employees proudly share that sense of purpose and derive dignity – and not just a salary – from their daily work. They feel like they matter and what they do matters. With our inspiring Purpose – “To nurture the spirit of Openness – every customer, every employee, every interaction, everywhere, every day” – we have truly put what we care for at the heart of what we do.
The key always lies in making the purpose evident in actions on a sustained basis. That’s when Purpose comes to bear, making it tangible. At every phase of our journey, we are conscious and conscientious in the manner we deliver banking experiences creating holistic value for our customers, communicating with them consistently and innovating to be the institution that we want to be.
Banking is a relationship-based business. How does Axis Bank approach its brand communications and value proposition from this perspective?
Branding too is based on relationships. For us, branding is a verb, not a noun. What sets Axis Bank apart from the rest is the “human touch” that balances the “tech-touch,” evident in all our dealings with those who walk in through our doors. Our customers play back those moments.
Our brand is centered on the belief that “Openness advances relationships.” It is all about what we believe in the heart, before it manifests in our actions. This is very aptly captured through the expression – “Dil Se Open.” This philosophy of ours transcends just communications/messages and fuses seamlessly into our organizational design and operations – everyday customer and employee experience through genuine actions and behaviors.
What are the kinds of products or services you think will gain new relevance for consumers over the next several years? Conversely – are there any elements of “the old way of doing things” that you think won’t come back?
Technology and innovation-led journeys in the financial services segment have thrown up lots of opportunities for multiple entities and this will benefit all stakeholders - the customer, the organization, and the employees. Today, enabled by technology, service-providers are addressing customer needs faster than ever before. Going forward, the instances of entities offering products to customers based on their specific preferences will go up exponentially, and this would be the one category of products that shall gain the maximum relevance – personalized experience. Embedding oneself in the customer's journey is a way to ensure mindshare.
The trends that will continue to influence this space are: digitization, big data and analytics, and artificial intelligence. It is imperative to reach out to customers who have so far not been serviced, by leveraging technology. Conversely, if customers are not happy with a product, it’s best that one identifies this quickly and redesigns the product with better features. This new culture is built on responsiveness and quick turnarounds. The mind-set required today is that you are only as good as your last performance.
I firmly believe that there is no “old way of doing things” – like I have mentioned earlier also, the emphasis should be on delivering value-proposition, even if it means adopting something that is otherwise considered old-school. For instance, I hear a lot of talk about branch-banking becoming obsolete, but I do believe that while the emphasis on technology will continue to rise, bank branches will continue to have an important role to play.
Nowadays consumers value brands not just for what they can do for individuals, but also for what they can contribute to society. What are the roles you see for a brand like Axis Bank in the realms of sustainability and corporate social responsibility?
Society has always been integral to who we are as an institution. In fact, it is the very basis of why we are here. Our purpose has always been to be relevant not just with the products and services that we offer, but also the value that we create for our entire stakeholder spectrum, down to the last mile. So, in many ways, I believe the Axis Bank brand is already closely associated with community stewardship.
We were well on our CSR journey before the Companies Act made it mandatory in 2013, and I can proudly claim that today, our CSR program is possibly among the most evolved and well recognized CSR programs in the country. Our CSR philosophy has always been to make a meaningful and measurable impact in the lives of India’s economically, physically, and socially challenged communities in both rural and urban India, focusing on sustainable livelihoods, education and skill development, and financial inclusion and literacy, as well as environmental sustainability.
We established the Axis Bank Foundation in 2006, and today it has interventions across 20 states in the country, and actively collaborates with the non-profit sector, our peers in the industry, government entities, and civil society to amplify our impact.
Our activities are strongly aligned to the sustainable development agenda that the world has embarked on, concretized by the Paris Agreement and the Sustainable Development Goals. Through our microfinance program, for example, we are directly working with millions of rural women entrepreneurs, helping them not just to achieve financial independence, but also to be inspirations for their communities. We are lenders to the green sectors of the economy such as renewable energy generation, mass transport and low carbon infrastructure, while helping marquee clients raise funds from the global capital markets towards green financing. Within the bank too, we have taken up many initiatives that have helped reduce the environmental footprint of our own operations.
With regards to the pandemic, in March we had set aside Rs 100 crores to support our customers, employees, government agencies, and the community in our collective battle, while our employees benevolently contributed a day’s salary to the PM’s Fund. We have been supporting police departments, municipalities, healthcare institutions, district authorities, and other relevant government entities in multiple states towards meeting their urgent requirements for safety and health equipment. Through our Foundation, we helped thousands of families meet their urgent nutritional needs in the initial phase of the national lockdown in April, and even today, the Foundation is working with thousands of impacted families towards restoring their livelihoods or simply helping them restart their disrupted lives.