AU Small Finance Bank: Pioneering Video Banking Solution

AU Small Finance Bank - Introduction

The continuous rapid evolution of technology is redefining traditional industries, including banking. AU Small Finance Bank (AU Bank), the largest small finance bank in India, has adopted artificial intelligence (AI) to advance its banking solutions. 

The company was established with a legacy spanning 25 years as an AU Financiers (India) Ltd in 1996 and converted into a full-fledged small finance bank on 19 April 2017 with over 300 branches on the first day. It now operates more than 620 banking touchpoints, serving over 1.6 million customers across 11 states in North, West, and Central India, supported by a workforce exceeding 15,000 employees.

In just three years as a bank, it has established a solid net worth exceeding ₹4,200 crore, a robust deposit base of more than ₹26,000 crore from 1.4 million deposit accounts, and a strong lending base of more than ₹31,000 crore.

You might be curious about the secrets behind this incredible success. Allow the answer to inspire you: by integrating AI-powered applications and video banking services, AU Small Finance Bank has honed in on elevating customer convenience and boosting operational efficiency to new heights.

Industry Context: Challenges in Banking

The banking sector is burdened by several challenges, including:

1. Customer Experience: Enhancing customer experience while managing long queues and complex processes.
2. Operational Efficiency: Reducing operational costs without compromising service quality.
3. Financial Inclusion: Extending banking services to underbanked and rural areas.
4. Fraud Prevention: Ensuring secure transactions and mitigating fraud risks.

Problem Statement of AU Small Finance Bank

AU Bank encountered a common industry challenge in delivering a seamless, customer-friendly banking experience that transcends geographical and physical limitations. Traditional in-person banking failed to meet the demands of busy professionals, digitally adept customers, and elderly individuals who favoured digital solutions. 

Furthermore, expanding services to rural and semi-urban regions proved to be a formidable obstacle.

Solution: AI-Powered Video Banking

In response, AU Bank introduced an innovative solution by launching a comprehensive video banking platform within its AU 0101 mobile app. This platform utilizes various generative AI and cloud-based technologies to offer nearly complete banking services through video calls.

Key Components of the Solution for AU Small Finance Bank-

1. Brand Recognition: Utilized for real-time customer identity verification against Aadhaar documents or passports. It ensures accurate, quick identification and enhances the onboarding process.
2. Required OpenSearch Service: Integrated for facilitating document and video retrieval from Simple Storage Service (S3), ensuring data accessibility and security.
3. AWS Lambda: Employed to run code without a server, enabling scalable and efficient application operations.
4. WorkApps Platform: Provided a robust API to integrate seamlessly with AU Bank’s on-premises applications, enhancing scalability and high availability.

Challenges Encountered

1. Technical Integration: Integrating AI-driven video banking into the existing systems while ensuring data security and compliance with regulations.
2. User Adaptation: Encouraging traditional customers to switch to video banking.
3. Scalability: Implementing a solution that could scale up to meet growing customer demands and cover additional geographies, particularly rural areas.

Results Achieved

Since its launch in June 2021, AU Bank’s video banking platform has delivered remarkable results:

1. Enhanced Customer Convenience: The video banking service operates from 8:00 a.m. to 9:00 p.m., seven days a week, offering more flexibility compared to standard banking hours.
2. Increased Financial Inclusion: 20% of new accounts opened via video banking are from rural regions, significantly contributing to national financial inclusion goals.
3. Scalability and Reach: AU Bank has scaled its customer acquisition efforts, with more than 100,000 accounts opened through video banking. The platform has enabled better market penetration in urban as well as rural areas.
4. Cost Efficiency: The bank has reduced its cost of acquisition by over 50%, optimizing resource utilization through video banking rather than expensive branch expansions.

Future Prospects and Vibencode’s Role

AU Small Finance Bank continues its journey, aiming to integrate credit underwriting and field investigation into its video banking services. This continuous transformation provides an excellent opportunity for experts in generative AI in banking solutions like Vibencode to step in.

Vibencode’s expertise in delivering scalable AI solutions can aid further enhancement, ensuring seamless integration of additional services and broader inclusion of regional languages.

Conclusion

AU Small Finance Bank’s pioneering efforts in employing AI-driven video banking underscore the transformative potential of generative AI in banking. AI applications forge a customer-centric, efficient, and inclusive banking ecosystem by addressing key challenges and extending banking services beyond geographical constraints.

Vibencode is dedicated to partnering with financial institutions to leverage artificial intelligence to foster innovation and revolutionize traditional banking models. Our advanced generative AI solutions are specifically designed to address the unique challenges of the banking sector, promoting improved service delivery, operational efficiency, and widespread financial inclusion.

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Remember, “AI in Action” is not just about technology; it’s about transforming industries and bringing value to every stakeholder involved.