Axis Bank Banking On Technology & MarketSegment For Competitive Space

ABOUT Axis Bank

AXIS bank (formerly UTI Bank) is the first new generation private sector bank to be established in India under the overall reform programme initiated by the govt. of India in 1991. Incorporated as UTI Bank, headquartered in Mumbai First Branch inaugurated at Ahmedabad Completes first profitable year in operation in1995 Deposit crosses Rs.10bn mark in 1996

 Opens its first international branch in Singapore Opens Representative Office in Shanghai Crosses the 2,000 ATM mark in 2006 Opens a Full License Bank Branch in Hong Kong Re-brands itself as Axis Bank Mumbai, Jul 30 2007 : UTI Bank on Monday rechristened itself as Axis Bank.

 The Bank is promoted by Unit Trust of India, which is the largest mutual fund in india, holding 87% of the equity. The Bank started its operations in 1994. AXIS Banks first capital raising postinception was in 1998 through a public offering.

AXIS Bank performance in 2008

the bank has developed a branch network which is built on customer convenience & service , helping it in acquisition of low cost retail deposits, retail assets, etc. During 2007-08 143 new branches were added to the banks network. This includes 33 extension counters that have been upgraded to branches. As on march 31, 2008 The bank had a network of 651 branches and 20 extension counters as against 508 branches and 53 extension counters a year earlier. out of 651 branches, 158 branches are in semi-urban and rural areas.

 With the opening of these offices, the geographical reach of the bank extends to 29 states and 3 union territories covering 405 centers.

 During 2007-08 , 143 new branches were added to the banks network, taking the no. of branches to 651. As on march 31,2008, the bank had a network of 651 branches and 20 extension counters as against 508 branches and 53 extension counters a year earlier. Out of 651 branches, 158 branches are in semi- urban and rural areas. Opening of these offices, the geographical reach of the bank extends to 29 states and 3 union territories covering 405 centers.

Current Shareholding Pattern of Axis Bank

The Axis banks business is divided into four segments: Retail, corporate, treasury and merchant banking. Apart from this the bank is also into insurance, investment banking, mortgage financing, credit cards, and depository services etc .

Services
Retail banking

1) Deposits schemes
2) Loans and advances A) Personal loans

b) Housing loans
C) Cards d) Consumer durables

e) Auto loans

Personal banking Accounts A ) Term deposit B) Fixed deposit C) Recurring deposit Cards

Different variant like: Gold plus card, Gold card, Silver & silverplus cards.

Corporate banking

a) Accounts
Normal Current Account Trust/NGO Savings Account

Services
Private Equity, Mergers & Acquisitions Advisory Services

Capital Market Funding

E-Broking

SHIFT IN STRATEGY
INITIAL BUSINESS MODEL Corporate loans offered higher yields to the bank during the period FY96 to FY99. Corporate advances a high growth rate and accounted for about 80 % of funds lent by the bank till year 2002.

 STRATEGIC INFLECTION POINT : In 1999 the banks net NPAs to advances ratio jumped to 6.3% in FY99 from 3.7% in FY97. This was reflected from a marginal 17% growth in the banks total advances in FY02 from a CAGR of 44% in the last four years.

 STRATEGY SHIFT The number of branches increased to 450 from just 35 in FY99.

With 95 extension counters location in the country.

It is the first bank in the country to adopted FINANCIAL AS ITS CORE BANKING SOFTARE , PROVIDED BY INFOSYS AND IT IS ALSO THE FIRST INDIAN BANK TO HAVE A REMOTE DISASTER RECOVERY MANAGEMENT SYSTEM TO PROMTE ITS BUSINESS FROM ANY

AXISs Current Strategy

the bank follows a broad differentiation strategy. They are: 1. Managing changing customer needs:

Powerful back office hubs

Bank's centralized phone banking center

Zonal level Nodal officers

Know your customer norms

 2) Risk management: Risk limits are set according to number of criteria including relevant market analysis, business strategy & management experience.

Risk limits are monitored & reviewed regularly.

 3. Dealing with regulations The bank calculates capital charge on operational risk under both the Basic Indicator Approach & the standardized approach. The bank has simultaneously undertaken internal studies on several lines of business for an evaluation of the risk profile, capturing of losses incurred & identifying the key risk indicators.

 4. Keeping pace with the technology The banks IT system developed a process called SETU (Seamless Electronic Transfer to AXIS Bank) The sale & redemption of 58 AXIS Mutual Funds Schemes was an additional service through the ATM channel

 5. Product & service innovation:

Bank set up low cost rural ATMs at Anand. A channel finance hub was created

The strategy making, strategy execution process for AXIS Bank

Growth Strategy
Increasing the market share in various business resulting in an enhancement in its core income streams. Improve the quality of its income streams. Increasing the market share in various business resulting in an enhancement in its core income streams Improve the quality of its income streams.

COMPLEMENTRY STRATEGIES FOR BUSINESS GROWTH AND DEVELOPMENT

1.Strategic alliances and Collaborative partnerships: Tie-ups with Maruti and Hyundai for Selling Car loans. Tie-ups with Bajaj Allianz General Insurance Tie-ups Partner with Metlife as Bancassurance Co-financing pact with India Infrastructure Finance Company Ltd(IIFCL) for Infrastructure projects.

 2.Outsourcing Selected Value-chain Activities : Outsourcing recruitments to MonsterIndia.com Outsourcing Print Operations to Xerox

Outsourcing of electronic bill payment (EBP) and ATM management

Offensive Strategic Moves

1.Superior Customer Service: High level of customer Satisfaction Leading to customer retention and loyalty for Increasing relationship with them.

 2.Range of services on ATM machines: Developed more than 18000 ATMs LIC premium payment, Telephone Bill Payment Mobile Banking and refill facilities for Airtel,..

 3.Aggressive growth in cards business: Leading issuers of debit cards Offer international debit cards in association With VISA and Master Cards. Introduce travel currency card and travelers Cheque. First to introduce Remittance Cards.

 4.Expansion of geographical reach : Geographical expansion of business especially in Districts and small towns. Provides low costs deposits and advances to agriculture sectors. At present Bank has branches in 26 states covering 258 cities,towns and villages.

 5.Financial Advisory Services : Focusing on Financial Advisory Services with Emphasis of affluent segments of customers. Acquiring and Addressing the segments of Customers whose income levels are high enough for them to acquire Wealth Advisory Services

Use of internet
First bank in the country to provide internet banking service Partnered with ministry of overseas indians to offer an Internet based electronic remittances portal Launched an e-payment facility Seamless electronic transfer Launched new process called i-trade

Evaluation Of Growth
diagram

Governance & Ethics Structure

To enhance the long term interest of its share holders and to provide good management. Thereby safe-guarding the interest of its other stakeholders such as depositors, creditors, customers, suppliers and employees.

Innovation and Entrepreneurship

The Bank experimented with new delivery modes for credit, including setting up low cost rural ATMs at anand. Such application of technology provides customer convenience as well as product innovation.

SWoT Analysis OF AXIS BANK

Positioning strategy

Axis bank has positioned itself as a bank which gives higher standard of services through product innovation for the diverse need of individual & corporate clients. So they want to highlight following points in their positioning statement:

 Customer centric Service oriented

Product innovation

Features Of Axis Bank

Anywhere Banking Instant Fund Transfer Internet Banking At-Par (Multicity) Chequebook ATM cum Debit Card Mobile Banking , Mobi

Phone Banking

TECHNOLOGICAL ADVANCEME NTS

Extensive Network . Centralized transaction processing system Centralized Phone Banking system

Mobile Alert Service.

NEFT(NationalElectronicFundTransfer) RealTimeGrossSettlement(RTGS).

New Initiatives
Tie-ups with various Govt. Departments: Govt. Departments: DGFT ePayments

MCD -Municipal Tax or Fees ePayments

MCD -eTendering Project

Sampark -Utility Bill ePayments

Bangalore One Project -Utility Bill ePayments

Alternate Channels:
ATM Channel

Internet Banking Channel

Mobile Banking Channel

ATM Channel
All its ATMs are connected to Base24 ATM switch The Bank through its ATMs offers the following services

Banking Services

Mobile Airtime Refill

Bill Payment e.g.: BSNL, MTNL Life Insurance Corporation Premium Payment Purchase and redemption of UTI Mutual Fund Schemes through the ATM.

Internet Banking Channel:

Axis bank provides a number of valueadded services on the Internet banking platform Services a)Funds Transfersb)Bill paymentc)Shopping

Mobile Banking Channel:

Debit or credit in your account: Receive alerts on your mobile phone every time there is a debit or credit in your Axis Bank account for more than Rs. 5,000

You can also request for the following information: -Balance -Last three Transactions -Know the status of your cheque -Request security balance in demat account

LEARNING, THINKING AND SHARING

Axis facilitates communication, collaboration and workflow between scattered employees bases. With over 150 branches and 2000+ knowledge workers there was an impending requirement for employees to communicate.

 Axis bank has a skilled and well trained workforce at all levels, including the front customer interface. The knowledge management oriented employee portal spans functions of the bank ranging from marketing, credit banking and other functions.

KNOWLEDGE, COMPETENCIES AND CAPABILITIES

SCALE AND SCOPE ADVANTAGE

Strategy focused on capacity enhancement Leveraging the scale and service advantage Up-to-date market infrastructure, sophistication in product development,reliabe banking techniques

PARTNERSHIPS
Numerous collaborative partnerships to extend the marketing reach of its product Selected value chain activities such as recruitment needs, printing operation and electronic bill payment Achieve greater efficiency

TOTAL CUSTOMER ORIENTATION

By centralizing transactions processing, the bank is able to achieve better consistency. Know your customers norms have also been implemented.

CORE VALUES
Customer satisfaction Maximization of stakeholder value Success through teamwork, integrity and people

Conclusion !!!!
AXIS bank has differentiated itself very well on the basis of high level service and product quality. They have successfully implemented the change and due to this their market share has increased only despite of tough competition prevails.