Gen AI, open banking and quantum leading us to an exciting growth path: Axis Bank CIO

Banking and financial institutions across the world are exploring and implementing new and emerging technologies to remain relevant in a rapidly evolving industry. Axis Bank, India's third-largest private sector bank by assets and fourth-largest by market capitalisation, has always been a leader in innovation with technology. As of March 31, the bank had a network of 5,377 branches and over 16,000 ATMs and cash recyclers, and is continuously investing in the necessary infrastructure, processes, and talent to stay ahead of the competition. 

In an exclusive interview with TechCircle, Avinash Raghavendra, President and CIO of Axis Bank, elaborates on how technologies like artificial intelligence (AI), open banking, and quantum computing are enabling the lender to streamline operations, offer personalised products and services, and make well-informed decisions. He also discusses the evolving role of CIOs, the importance of upskilling, and the bank's strong focus on cybersecurity and other key areas. Edited excerpts:

What technologies are you most excited about for your organisation and the banking sector?

The rise of generative AI has been the most significant development in the past 15 to 18 months. At Axis, we have closely monitored large language models (LLMs) and formed a dedicated unit to prioritise generative AI. Our goal is to enhance our AI capabilities and integrate them throughout our enterprise to create innovative solutions. We are also focused on safety features and ethical considerations, known as Ethical AI, and have implemented a Gen AI model for internal use. We believe that within the next four to five years, generative AI will revolutionise the financial services industry. We are also excited about open banking and the potential for collaboration between banks and partners through APIs. The growth of digital public infrastructure in our country, such as Aadhaar, UPI, Account Aggregator, ONDC, OCEN, and the RBI Innovation Hub's focus on CBDC, is impressive and sets a positive trajectory for a digital future. Additionally, we are exploring quantum computing and have completed a proof of concept with Krishi, a non-profit organisation established by the government.

Can you provide more information about your collaboration with Krishi and the quantum computing initiative?

We recently finished a proof of concept with this organisation called Krishi on quantum computing. This is particularly exciting given the scarcity of use cases in the quantum computing field. Krishi, a government-backed non-profit agency, reached out to us for a collaboration on portfolio optimisation as part of the proof of concept. The results we achieved were promising, leading us to believe in the potential of this technology. The current challenge, however, is to make this technology more accessible to a wider audience, given the high costs and limited availability of quantum computers. It is essential to establish a supportive ecosystem around quantum computing to unlock its full potential.

Currently, what is the size and skill set of your tech team? Are you planning to expand in the next 12-18 months by hiring new talent or upskilling existing employees?

Currently, the core tech team consists of over 2,000 individuals. Additionally, we have various adjacent units that contribute to technology development. For example, we have a dedicated business intelligence wing with 700 staff, a digital team focused on customer journeys with 400-500 members, and functions like InfoSec and technology risk with around 70-75 employees. Our core tech team comprises individuals with expertise in banking, treasury channels, payments, engineering, and core technology.

In recent years, we have been focusing on nurturing engineering talent and controlling the integration and customer engagement layers to differentiate ourselves from competitors. We are investing in digital skills, including cloud and data competencies, and have established a competency centre for AI. We are also training our employees in technologies like Salesforce and collaborating with platforms like Coursera, Google Cloud, and Microsoft for upskilling. We are open to hiring new talent, especially in areas like payments and core engineering where more work is needed. Axis Bank is an attractive place for talent to join due to our ongoing initiatives and opportunities for growth.

When it comes to your company's technology budget, is it growing this year or are you slowing down the pace?

I am quite lucky in that I have a board that is very pro-technology, and so is Amitabh. From that perspective, we have been heavily focused on expanding. Even this year, the budgets have increased. Over the past three years, our operational spending has increased by nearly 150%. The IT resources have also increased by over 100%. We are not slowing down; in fact, this year's budget is better than last year's. However, this year will be more focused on consolidation, especially with the Citi migration in Q2. Our initiatives in the first half of the year will be centred on absorbing the Citi migration into our setups. This leaves us with only a six-month window for new initiatives. To answer your question, our investments are solid.

Where would you place your organisation in terms of its digital transformation journey, and how did you achieve that?

At Axis, we are dedicated to digitally transforming our operations, with a key focus on building customer obsession. We take pride in openly prioritising customer obsession, even discussing it in our investor decks. This mindset is not common in the financial industry, but we are committed to embracing it. Four or five years ago, when Amitabh Chaudhry took over, we established a digital bank within the organisation. Our goal was to expand our product offerings through digital channels, including personal loans, business loans, and various investment options. This initiative was driven by our desire to innovate and meet the evolving needs of our customers. We have since continued to evolve our processes and promote digitisation across our product and service offerings. This includes enhancements to our credit cards, digital forex services, and the operations of our virtual centres. 
Internally, we have made significant investments in a digital platform called Siddhi, a mobile app available to our sales force. Siddhi is designed to cater to different sales personas, providing a one-stop solution for managing leads, products, customer interactions, and frequently asked questions. It empowers our sales force to better serve customers and address their needs efficiently. This investment reflects our commitment to leveraging technology to enhance customer experiences and drive business growth. 

We understand that the digital landscape is constantly evolving, and we are dedicated to staying ahead of the curve. Our focus on innovation and continuous improvement sets us apart in the industry, and we are committed to delivering exceptional service to our customers year after year.

When looking at competitor benchmarking, which key technology areas do you see a need to improve?

Yes, we do look around, and not just watch our Indian counterparts but also global happenings. For example, I was following the recent JP Morgan's Investors Day, which provided valuable insights into their technology investments and focus areas. This also helps us prioritise our own areas of focus. We also learn from unfortunate incidents within our peer group, such as the recent scrutiny faced by some of the Indian banks. This reinforces the importance of resilience, cyber security, and reusable architecture, which require continuous improvement. Additionally, we collaborate with Fintech partners and companies like AWS, Google, and Azure to gain knowledge. Consumer satisfaction benchmark now extends beyond banks to platforms like GPay, PhonePe, and social media platforms. Therefore, we consider evolving consumer preferences and changes made by industry giants when it comes to our digital properties.

What are your views on the changing roles of CIOs and where do you want to see the CIO in the next 2-3 years?

Well, the CIO role has evolved dramatically over the last two decades. From a support function that existed about 15 years ago, it has now transitioned into an enablement role. CIOs are now integral members of institutional management committees, contributing to strategic thinking. The roles have become more defined and expansive. Driving business transformation and process automation has always been part of the CIO's responsibilities. However, the role now also involves influencing, leading, and governing. This includes managing risks, ensuring digital data privacy, and addressing issues like data residency. Change management and governance have become essential aspects of the CIO role, which were previously considered secondary.