Au Small Finance Bank Limited · NSE:AUBANK
Au Small Finance Bank — Investor Presentation (February 2022)
62 slides from Au Small Finance Bank's investor presentation, Feb 10, 2022
Slide 1: Presentation to Investors - AU Insights Webinar
,;,ih., AU ,. . 'V'~'. :.,, SMALL : . li 'f ·0' FINANCE ,_ .' .. BANK A SCHEDULED COMMERCIAL BANK Ref. No.: AUSFB/SEC/2021-22/338 Date: 10th February 2022 To, National Stock Exchange of India Ltd. BSE Limited Exchange Plaza, C-1, Block G, Phiroze Jeejeebhoy Towers, Sandra Kurla Complex, Dalal Street
Slide 2: AU Insights, 10th February 2022
AU INSIGHTS 10th February '22
Slide 3: In this Presentation
1 TECH STRATEGIC PRIORITIES 2 OVERVIEW OF DIGITAL BUSINESSES In this AU 0101 Credit Cards Presentation Merchant Solutions Group Here's what we'll cover: 3 CASE STUDY – BRANCH BANKING SALES FORCE MANAGEMENT
Slide 4: Building a robust foundation to execute our strategy
Building a robust foundation to execute our strategy 01 02 03 04 05 06 07 08 09 10 TREASURY, SECURED MERCHANT FINANCIAL & BRANCH HOUSING COMMERCIAL DIGITAL CREDIT DCM & WHEELS BUSINESS SOLUTIONS DIGITAL BANKING LOANS BANKING BANKING CARDS WHOLESALE LOANS GROUP INCLUSION DEPOSIT 10 Business Groups (S
Slide 5: Defining trust in digital banking
Defining trust in digital banking CONVENIENCE SPEED SECURITY Experience should be very easy for Bank should be quick in getting Should be completely safe customers to fulfill their objective things done and secure TRUST FLEXIBILITY AVAILABILITY CUSTOMER OBSESSION Should adjust itself as per Bank sho
Slide 6: Tech Strategic Priorities
Tech Strategic Priorities 1
Slide 7: India: Massive structural growth opportunity
India : Massive structural growth opportunity Est. double-digit GDP CAGR (nominal) Demographic dividend – High working age population 17.4% 11.0% 10.7% 10.7% 10.6% 10.6% 67% 2021 2022 2023 2024 2025 2026 Projected nominal GDP growth rate MSME Credit Gap of INR 26 Lakh Cr Low Credit Card penetration
Slide 8: Tech remains an area of top focus for us
Tech remains an area of top focus for us Digital Bank for Video Banking Credit Cards UPI QR Retail Customers 4
Slide 9: We are executing on a clearly defined set of priorities
We are executing on a clearly defined set of priorities 1 Grow retail-focused, stable, low-cost deposit franchise 2 Develop unsecured lending capability using Data & Analytics 3 Build digital distribution channels 4 Invest in core technology to remain future-ready 5 Drive automation and operating ef
Slide 10: Growing low-cost deposit franchise through best in-class digital experience
1 Growing low-cost deposit franchise through best in-class digital experience Building Amazing Digital Acquisition Making it Easy Personalisation Security Products • Offer compelling • Seamless digital • Multi-channel • Create unique • Safe and seamless value proposition onboarding customer-centered
Slide 11: Digital solutions across customer segments
Digital solutions across customer segments Retail Customers Small Merchants | MSMEs Corporate Clients • Launched Retail Digital Bank AU • Revamped Corporate Internet • AU QR App for merchants 0101 in June ‘21 Banking in FY ‘22 (2 Lac+ customers) • 1 million+ registrations • 12k+ corporates onboarded
Slide 12: Developing unsecured lending capability
2 Developing unsecured lending capability Important tool for customer engagement and digital customer acquisition Products we are Sizeable Opportunity Over Time By Using developing Corporate Clients PL Market Size BNPL opportunity PL INR 6.5 Lakh Cr INR 2.5 Lakh Cr in 5 years BNPL (FY21) 65% CAGR •
Slide 13: Building digital distribution channels
3 Building digital distribution channels Physical Channel Direct Digital Channel Alternative Digital Channel • Existing channels – Branches, • AU 0101 • Partner ecosystem led acquisition Feet on street • Merchant App (in roadmap) − Startups, Fintechs • Leveraging digital − Digital Distributors marke
Slide 14: Investing in core tech to remain future ready
4 Investing in core tech to remain future ready Cloud Ready Data & Transform the Core Infrastructure Analytics Platform • Modular microservices based • Enabling Cloud Journey for Applications • Scalable platform on the cloud architecture through right Tech, Process and Maturity • Drive data culture,
Slide 15: Driving automation and operating efficiency
5 Driving automation and operating efficiency Digitised solutions across key functions 01 02 03 04 Customer Onboarding Back-end Operations Sales Force Management Branch Digitisation • 90% of our sales team is • Reduced rework by 36% • BYOD equipped salesforce • Increasing digital tools in digitised
Slide 16: Overview of Digital Businesses
Overview of Digital Businesses DIGITAL BANK FOR RETAIL CUSTOMERS CREDIT CARDS MERCHANT SOLUTIONS GROUP 2
Slide 17: Digital Bank For Retail Customers
01 Digital Bank For Retail Customers
Slide 18: Genesis of Retail Digital Bank
Genesis of Retail Digital Bank Acquire digitally native customers including Gen Z, Millennials, Urban, Salaried and Professionals Engage Tech Savvy customers by full stack servicing, transaction and relationship management Fulfilling more of customer needs to increase Product Per Customer 12
Slide 19: AU 0101 offers a comprehensive suite of features
AU 0101 offers a comprehensive suite of features Lifestyle Investments Mobile Recharges, Flight, Bus, Cab, Hotel bookings One stop shop for Mutual Funds, Stocks, IPOs ↑ 1.5x Jan ‘22 vs Aug ‘21 Credit Cards Deposits - Pre-approved offer with 4 step journey - Comprehensive card management features Acc
Slide 20: Bringing together digital experiences to better engage with customers
Bringing together digital experiences to better engage with customers Get personalized Manage your Get rewards Make Insure family’s products cards on purchases Investments health via pre-approved offers via AU 0101 app via Card offers via IPOs via Insurance marketplace 14
Slide 21: With seamless customer onboarding journeys
With seamless customer onboarding journeys Just 5 simple steps and a new AU Savings Account is open! 1 2 3 4 5 Input mobile and Provide income Select product & Enter AADHAR Complete Video KYC PAN details make payment 15
Slide 22: Multi-channel customer centered experience
And offering multi-channel customer centered experience Chatbot - auro WhatsApp B an k in g Custom er Care Missed Call Banking Video Banking 83 83 83 83 99 1800 120 2586 • 400+ Service Requests • 20+ Service Requests 1800 1200 1200 • 10+ Service Requests customercare@aubank.in • Money Transfer • Acc
Slide 23: Our industry-leading video banking proposition complements the 0101 app
Our industry-leading video banking proposition complements the 0101 app Acquisition: Video embedded in digital journey – no separate download VIDEO BANKING @ AU Acquiring urban, salaried segments at scale Engagement: Engagement Acquisition Service Relationship Management, Deepening, Cross sell Every
Slide 24: And is showing good traction
…And is showing good traction 50k+ INR 300 Cr+ VKYC accounts opened Balance as on 31st Jan. 400+ Service Requests available on 2K+ Video Calls managed per day Video Banking App + Video Banking = Complete digital bank 18
Slide 25: Video banking is fulfilling complex service requests with great CX
Video banking is fulfilling complex service requests with great CX My account was dormant I was able to update my I am holding accounts with I am happy that I received the due to re-KYC requirements, address through Video various banks, but with AU interest certificate immediately but AU Video Banki
Slide 26: Recognized for innovation and customer service
And is being recognized for innovation and customer service Innovative Best Practice NeoChallenger Bank Awards Business Transformation of Digital banking Initiative of award in Service Excellence 2021 for delivering great the Year the Year – India customer experience DX Summit & Awards by CII IBS In
Slide 27: Strong adoption with million+ registrations in three quarters
Strong adoption with 1 million+ registrations in three quarters JUNE 2021 JAN 2022 CUSTOMER BASE ~20 Lakhs ~23.7 Lakhs DIGITAL CUSTOMERS 4.5 Lakhs 8.3 Lakhs MONTHLY ACTIVE 2.3 Lakhs 4.7 Lakhs 2x Growth - Penetrating the TS base sharply - Acquiring digitally native customers DAILY ACTIVE 0.5 Lakh 1.0
Slide 28: Increased digital engagement
Increased digital engagement 97% Financial transactions executed digitally* 66% Non-financial transactions completed digitally 50% increase in 30% increase in digital 3.7x increase in Service 3x increase in services used transactions per customer transaction value per customer Requests fulfilled on
Slide 29: And accelerated digital acquisition
And accelerated digital acquisition Urban customers 78% vs 49% among those acquired Savings Account through branches 38% of all SA opened through AU 0101 in Jan ’22* Salaried professionals vs 36% among those acquired 49% through branches Credit Cards 56% Cards issued on AU 0101 1.25 Lakh+ Credit car
Slide 30: At increasing scale and lower cost
... At increasing scale and lower cost Scaling up as an important channel Significantly lower Cost of Acquisition 100 34% 80% 23% 24% 19% First month 15% 0101 activation 11% <50 1% 3x Jul '21 Aug '21 Sep '21 Oct '21 Nov '21 Dec '21 Jan '22 BRANCH DIGITAL Avg. monthly balance VKYC SA as a proprotion
Slide 31: Adding more digital propositions on AU 0101
We are working to add more compelling digital propositions on AU 0101 Instant PL B NP L P ersonal Finance R emi t t an c e M anagement 25
Slide 32: Comprehensive PFM to help customers achieve goals
Excited to help customers achieve their goals with comprehensive PFM How much should I save for my How can I save daughter’s more on my wedding? taxes? Working on creating an AI-powered How much should my retirement Personal Finance Management corpus be? Is my family sufficiently insured? propositio
Slide 33: Credit Cards
02 @ aubank.in = Bow Credit Cards Credit Cards Credit Card Services Credit Cards Presenting AU Bank Credit Cards, A World Of Limitless Possibilities. @ (Our range of four new Credit Cards @trer a
Slide 34: Credit card market significantly under penetrated in India
Credit card market significantly under penetrated in India Latent Growth Opportunity Skewed Distribution Digital Payment Ecosystem Significantly Low Credit Card penetration in India Credit Card Distribution concentrated in Urban Digital payments in India to grow at 23% Salaried customers FY22E - FY3
Slide 35: Sizable opportunity given growing customer base and strengths
Sizable opportunity given our growing customer base & traditional strengths Tier 2 & Tier 3 Markets Lifestyle Product Opportunity Lower credit card penetration in markets where AU has Growing demand of significant presence lifestyle product from Bank customers 01 02 03 04 05 Existing Bank’s Unserved
Slide 36: A dedicated credit card vertical to execute on this opportunity
A dedicated credit card vertical to execute on this opportunity Building Attractive Credit Card Proposition Segment Focused Products Multi-Channel Distribution Leveraging Digital Driving Engagement • Leading proposition for each • Digital - 0101 • Completely digital • Competitive offers segment and
Slide 37: Serving every segment with customer focused products
Serving every segment with customer focused products • Premium memberships like Taj Epicure and ZomatoPro Super • Lower markup fee, special rewards on dining, dept & international Affluent spends • Complimentary device protection plan and Priority Pass • Top merchants’ vouchers on early activation A
Slide 38: Leading the future with innovative products/platforms
Leading the future with innovative products/platforms 1 4 Customer driven product Digital native platforms Industry first product Faster go to market targeted to new age platform for digital customer requirements partnerships with best-in- class onboarding experience Product for 2 5 Corporate unserv
Slide 39: Multi-channel distribution targeting specific segments
Multi-channel distribution targeting specific segments DIGITAL BRANCH DST DSA Existing Credit NTB customers, Tier Digital Savvy Customers ETB, Tier 2/3 locations Cardholders, Tier 1-2 1-2 locations locations • Presence across • Serve existing Bank • Expand reach beyond • Target acquisition in domina
Slide 40: We have built a comprehensive digital stack
We have built a comprehensive digital stack Seamless Onboarding Journey Web Journey for NTB customers Tab based biometric KYC journey Digital Sourcing Partners Pre-issuance Complete digital sourcing stack SOURCING GATING ORCHESTRATION API Bureau Check Issuance stack Objectives: Business Rule Engine
Slide 41: Seamless digital onboarding experience
With seamless digital onboarding experience Just 5 simple steps and a brand-new AU Bank Credit Card is issued! 1 2 3 4 5 34
Slide 42: Full suite of card management features on AU 0101
…And full suite of card management features on AU 0101 35
Slide 43: Driving engagement with attractive offers
Driving engagement with attractive offers Amazon Flipkart Croma JioMart ▪ 10% Cashback on Online Shopping during Big Billion Day sales ▪ 10% Cashback during Diwali week clubbed with Amazon Offer ▪ Ongoing offers with top grocery, travel, food order and entertainment merchants 36
Slide 44: Some key numbers
Some key numbers 1,25,000+ Cards Rs. 17,000+ Spend Per Card The current run rate is 20K+ As per Dec’21 months spends. A healthy mix of cards every month 18% of Affluent cards* 100K + Limit/Card 53% New To Credit Cards First-time credit card holders. AU Bank Card is Average limit per card issued so t
Slide 45: Business progress so far
Business progress so far Existing Bank CORE STP Card Activation % Customer Markets 71 68 68 80 % % % % ETB customers constitute a Higher distribution in core Cards issued without any Credit Card customers who larger share currently markets manual u/w have activated their cards Limit Utilization ECOM
Slide 46: Merchant Solutions Group
03 Hi PRIYAL, Delighted to see you Experience the Simplified Banking Merchant Solutions Group
Slide 47: Massive opportunity in micro-enterprises with digital enablers
Massive opportunity in micro-enterprises with digital enablers falling in place Opportunity Digital Enablers 6.3 Cr MSMEs in India • Widespread adoption of e-commerce and digital payments 99% are Micro (< 5Cr Turnover) • Increased data trail 1 Cr GST registrations 30% 40% Growing contribution to GDP
Slide 48: We know the segment very well
We know the segment very well Merchants Account For : Our strengths built over 2 decades Strong distribution network in the unorganised sector 59% of our existing customers including in core geographies 63% of our Asset book Granular knowhow of diverse businesses and credit 40% of our liabilities pr
Slide 49: And understand their pain points
… And understand their pain points Merchants Face Several Challenges Case Study – Illustrative AU Customers DHAKAD SAREES 1. Lack of instant recurring small-ticket financing Cloth Store | 31 years old | Saree and Ladies Cloth store at Jagatpura, Jaipur Turnover: 30 Lakhs Annually | Digital Savviness
Slide 50: Merchant solutions group to provide one-stop integrated solutions
Merchant solutions group to provide one-stop integrated solutions Digital Bank for merchants’ integrated business needs Comprehensive Speedy Multi-Channel Engagement & Product Suite Execution Distribution Servicing • Customized product • Seamless onboarding • Digital • 360-degree customer offerings
Slide 51: Expanding product suite for a comprehensive customer proposition
Expanding product suite for a comprehensive customer proposition Digital Collection & Payment Financing Solutions Digital Trade & Supply Chain Finance • Small ticket finance for cash flow gaps • Collection – PG links, e-mandates, ePOS • BG/LC/Bill Discounting • QR/POS Financing – Daily EMI solutions
Slide 52: Omni-channel customer acquisition strategy
Omni-channel customer acquisition strategy Digital Channel • UPI QR solution led acquisition • Seamless digital onboarding and instant activation through merchant app Physical Channel • Direct selling team (Team size ~250) • Leverage branch distribution especially for core markets Alternative channe
Slide 53: AU QR accelerating merchant acquisition
AU QR accelerating merchant acquisition We see payments as core for merchant acquisition which will be the main source for all the traffic on our platform Why will Merchants take our QR 3.5 Lakhs+ 85k 38% • Bank’s trust UPI QRs installed NTB acquisitions Monthly Active Users • Seamless onboarding vi
Slide 54: One-stop solution with bundled offerings - Merchant app
Build a One-Stop solution with bundled offerings – Merchant app Digital onboarding and account opening – Self / Assisted Model Maker – Checker and Advanced authorization flows Multi modal collection and payments solutions Access to quick financing – Integrated with digital lending workflow Advanced
Slide 55: Case study - Branch Banking Sales Force Management
01 Case study – Branch Banking Sales Force Management
Slide 56: Equipping our teams for a mobile-only world
Sales force management - equipping our teams for a mobile-only world Acquisition Tracking and 360 View Book Management Gamified Learning TAB CRM Smart Dashboards Master - O Gamified Learning Digital Sales Kit Calculators 47
Slide 57: Real-time performance tracking and gamification
With real-time performance tracking and gamification to drive behaviour Pulse meter – Automated Branch Dashboards Daily Scores on WhatsApp Tracking branch level pulse Daily Run Rate (DRR) CASA, TD Credit Cards, Weekly Run rate (WRR) Insurance Monthly Run Rate (MRR) QR, POS, SIP Our approach to arriv
Slide 58: Capsulized targets to drive behaviour
Capsulized targets (with in-built gamification) to drive behaviour % Sales Employees opening RPC A/Cs Jun’21 Dec’21 51% <3 RPC 22% Employees opening 7+ RPC accounts 41% 3-7 RPC 43% have increased by 5x 6% 7-10 22% RPC 1% >=10 14% RPC * R P C s t a n d s f o r R o y a l e - P l a t in u m - C u r r e
Slide 59: How digital is complementing branch distribution
How digital is complementing branch distribution Case study - Indore city – Reach through Physical, Density through Digital 28-30KM Branch Location Diameter • Bank X*: 30-35 branches (~6,000-7,000 Cr.) 1-2 kms Physical Catchment 4-5 • AU Bank: 4 branches (~400 cr.) kms 65,996 CR. Phy-gital Catchment
Slide 60: In summary
In summary Massive opportunity as the India story unfolds in next few years With our recent launches, we are at par with leading banks in India and have set a foundation to build further on Early wins: • 0101 emerging as an important distribution channel for SA and Credit Cards at a significantly lo
Slide 61: Disclaimer
Disclaimer This presentation has been prepared by AU SMALL FINANCE BANK LIMITED (the “Bank”) solely for information purposes, without regard to any specific objectives, financial situations or informational needs of any particular person. All information contained has been prepared solely by the Ban
Slide 62: Thank You
BADLAAV HUMSE HAI For Investor queries contact (details in QR Code): Prince Tiwari | Aseem Pant Thank You! Email: investorrelations@aubank.in
AU Small Finance Bank — Investor Presentation (February 2022) on 6ix