MUMBAI: Through its AI initiative – FinAI, a key pillar of Bajaj Finance 3.0 – the company aims to triple lead conversion rates, double back-office productivity, and boost front-line performance by 1.5 times.
The company’s AI-driven transformation will integrate with its existing cloud and digital infrastructure, said Rajeev Jain, managing director of Bajaj Finance. “We’ve always been early adopters of technology,” he said, adding, “Technology drives revenue growth, reduces costs, and mitigates operational risks. AI will take this a step further by improving customer engagement, lowering operating expenses, and augmenting profitability.”
Over the past year, the company has tested over 30 AI use cases to validate its effectiveness. “Ninety percent of our computers operate on Microsoft Azure, and our data lake supports hundreds of thousands of variables,” he said. “These foundations make AI a logical next step.”
One significant use case for AI at Bajaj Finance is conversational AI. Jain explained, “Currently, SMS communication is static. With AI, messages will include interactive links. For instance, if a customer clicks a link, they can specify preferences like a smartphone instead of a smart TV. AI will then provide options, specifications, and prices, even connecting them to a dealer… Over the next four years, we aim to reduce operating cost-to-net-interest-margin ratio by 100 basis points.”
Jain emphasised that AI will complement existing systems rather than replace them. “AI will integrate into our current cloud, data, and digital infrastructure. However, physical processes like KYC and AML compliance will remain essential due to regulatory requirements,” he said.
Discussing the broader lending environment, Jain addressed concerns around unsecured loans. “Unsecured loans have grown rapidly after Covid, prompting necessary regulatory measures. For us, our product mix has remained consistent over the past decade,” he said. He added that recent credit cost increases are a return to pre-Covid norms. “If credit costs were 195 basis points pre-Covid, they went down to 153 last year, and are now at 205-210… it’s not a dramatic shift,” he said.