New Era of Banking: Payment Banks Raise the Bar in India

As the banking sector undergoes rapid evolution, Airtel Payments Bank is dedicated to meet the evolving financial needs of their customers. They achieve this by introducing innovative solutions and seamlessly scaling their operations in response to market demands, shared Ganesh Ananthanarayanan, Chief Operating Officer, Airtel Payments Bank, in an exclusive interaction with Srajan Agarwal of Elets News Network (ENN).

Airtel Payments Bank has been pivotal in the financial inclusion landscape. Could you elaborate on the company’s overarching vision and how it aligns with market requirements?

Airtel Payments Bank started its journey in 2017 with the core purpose of driving digital financial inclusion in the country. We adopted a three- pronged approach to ensure maximum access to formal banking services. Firstly, we built a deep distribution network, with over 500,000 banking points across the country, to provide easy access to banking in deep rural pockets of the country. Secondly, we keep conducting financial literacy campaigns to propagate the benefits of adopting formal banking in the underserved and unbanked pockets.

Lastly, Airtel Payments Bank continues to introduce tailored products and solutions that are user needs drive, making banking simple and seamless. One such solution is our face authentication-based savings bank account opening, which has simplified and made the account opening process more convenient for customers. We were the first payment bank in the country to offer this feature. This innovation enables our Business Correspondents (BCs) to open accounts by using face authentication e-KYC. The authentication is processed using a newly developed mobile application by the Unique Identification Authority of India (UIDAI) as a result, the business correspondent now only needs a smartphone to open an account. Today, we serve one out of every five villages in the country.

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How has the bank been growing? Looking ahead, what are the key strategies or initiatives that Airtel Payments Bank is focusing on to maintain its leadership position in the digital banking sector and adapt to future market dynamics?

Airtel Payments Bank has been growing steadfastly over the last four years and closed FY24 with revenues crossing INR 1,836 cr with a net profit of INR 34.5 cr. Our Monthly Transacting User (MTU) base is 80.4 million, and we now onboard over a million new customers monthly.

Today, we are the fastest-growing digital bank in the country processing over 8 billion transactions annually. The Bank’s emphasis on safety, simple and rewarding digital banking experience has resulted in a strong demand for our digital savings account for daily transactions. The account stands apart in the industry as it comes powered with an additional layer of payment validation. We are the only bank to provide this additional layer of payment validation in the country. A customer can easily open this account digitally on the Airtel Thanks app with CKYC within minutes and with an end-of-the-day balance limit of INR 2 lakhs. We registered a 3.5 times growth in its digital onboarding of new customers in March’24 when compared with December’23.

Looking ahead, we will stay committed to pioneering innovations that redefine digital banking experiences. By staying ahead of industry trends and embracing emerging technologies, Airtel Payments Bank aims to set new benchmarks for digital banking. Our goal is to remain the preferred choice for millions of customers seeking trusted, accessible, and innovative banking solutions.

Airtel Payments Bank offers a range of products in a competitive market. Could you highlight some unique features of your current products that set them apart from competitors and specifically cater to customer needs?

We strive to offer seamless digital banking experience by offering products that are customer need-driven, safe, and simple. Customer feedback is integral to our overall product strategy. We actively listen to our customers’ preferences and pain points, using insights to refine our services continuously. This customer-centric approach enables us to tailor our offerings effectively, fostering long- term relationships.

We recently launched Airtel Payments Bank Smart Watch, which comes with Tap and Pay facility, allowing users to make daily payments with just a Tap of their smartwatch. With A New Way To Pay, we aim to at revolutionize contactless payments, to redefine and make contactless payments accessible to a larger consumer base. The Smart Watch brings the power of, Tap and Pay to the users wrist and enables them to stay ahead of the curve and enjoy the benefits of the future of payments.

By focusing on customer-driven needs and leveraging technology, Airtel Payments Bank delivers superior and convenient banking solutions that stand out in the market.

As the banking sector evolves rapidly, how are Airtel Payments Bank’s operations designed to scale with market demands and ensure robust performance, especially during phases of rapid growth?

As the banking sector undergoes rapid evolution, at Airtel Payments Bank we are dedicated to meet the evolving financial needs of our customers. We achieve this by introducing innovative solutions and seamlessly scaling our operations in response to market demands. We invest significantly in scalable technology infrastructure and have an in-house tech team. This approach ensures that we can handle increased transaction volumes securely and efficiently. Additionally, our customer- centric approach, strategic partnerships, and continuous talent development empower us to adapt swiftly to evolving banking sector dynamics and sustain our growth effectively.

What are the steps needed to make payments bank more sustainable model?

The payments bank model came to life to complement the core banking sector in India by improving last-mile accessibility, introducing world-class digital services, and driving digital and financial inclusion. It is essentially a full-service digital banking model that allows access to customer deposits and opportunities to offer payment, insurance, lending and other saving solutions in partnership with service manufacturers, making the large income pool of a traditional bank available to Payments Bank.

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Today, payments banks have hundreds of millions of users across socio-economic backgrounds. They are the fastest-growing deposit franchise in the country with a profitable model. Most of us have received the ‘scheduled bank’ status also. In nutshell, the Payments Banks are the new-age digital banks of India that are well-positioned to serve the evolving financial needs of the country at scale.