Bajaj Finance Unveils Ambitious AI-Driven Business Plan
Mumbai: Bajaj Finance, India’s largest non-bank consumer financier, has announced a groundbreaking five-year business plan focused on integrating artificial intelligence (AI) throughout its operations. The strategy aims to enhance customer engagement, increase revenue, improve productivity, strengthen internal controls, and reduce both operating and credit costs.
AI Transformation for Enhanced Customer Engagement
In an exclusive chat with ET, Managing Director Rajeev Jain highlighted that the shift towards a comprehensive AI-based system is expected to boost customer conversion rates significantly while keeping costs low. He emphasized that the company aims to maintain or accelerate its current loan growth trajectory.
Significant Savings from AI Deployment
“We have already implemented AI in several use cases this year and are targeting full integration by December 2026,” Jain stated. “At our current run rate, we are saving between Rs 140 crore to Rs 150 crore annually compared to last year. The potential for improving conversion rates is enormous, and we expect costs to decrease while maintaining or improving growth rates,” he added.
Expanding Customer Base and Cross-Sell Opportunities
During a presentation to analysts and investors, Jain outlined Bajaj Finance’s ambitious targets. The company aims to expand its total customer base to over 200 million by March 2029, up from the current 92 million. Furthermore, the goal is to increase cross-sell customers to more than 115 million from the existing 58 million, while raising the share of retail credit to over 4% from less than 3% today.
Optimizing Processes for Efficiency
Jain asserted that AI adoption will enable Bajaj Finance to reach a larger customer base more efficiently. “With AI, we aim to cut costs for our agents by at least 25%, allowing them to focus on more productive activities,” he stated.
Improving Communication Through AI
Currently, Bajaj Finance sends approximately 160 million SMS messages after curating the available data. Jain indicated that this number could potentially rise to over 500 million through targeted AI-generated messaging, leading to higher customer engagement. “While we now offer personal loans, AI could help us assess if customers might be interested in additional products, like home loans,” he explained.
Future Automation and Enhanced Customer Experience
Looking ahead, Jain mentioned that AI could facilitate a seamless experience for customers, allowing them to choose their desired loan products, schedule appointments with sales managers, and eventually automate the electronic Know Your Customer (eKYC) process.
AI as a Mega-Megatrend
Jain described the adoption of AI as a “mega-megatrend” that is poised to transform Bajaj Finance’s operations by March 2029. “For instance, in auditing, where staffing is limited but the function is crucial, AI can ensure 100% accuracy, significantly enhancing our assurance capabilities,” he said.
The Economic Impact of AI on Business Operations
According to Jain, the cost of implementing AI solutions has dropped dramatically. “What used to cost $40 last year has now reduced to between $3 and $9,” he noted, highlighting the rapid decrease in costs and the potential for further reductions.
Importance of Cloud Infrastructure in AI Deployment
He further stated that effective AI utilization requires robust cloud infrastructure—a capability Bajaj Finance has developed over the past five years. “This gives us a significant advantage moving forward,” Jain explained.
Market Response and Share Performance
Following the presentation, Bajaj Finance shares rose by 2.6%, closing at Rs 7,116 apiece, and continued to climb, ending at Rs 7,123 per share on Thursday.
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Conclusion
Bajaj Finance is poised for significant growth as it embraces AI, enhancing customer interactions while optimizing its operations. This strategic initiative not only positions the company for a competitive future but revolutionizes its approach to customer service and financial solutions.
FAQs
1. What is the main focus of Bajaj Finance’s new business plan?
The primary focus is the integration of artificial intelligence (AI) throughout its processes to enhance customer engagement, revenue growth, and operational efficiency.
2. What cost savings has Bajaj Finance achieved through AI so far?
Currently, Bajaj Finance is saving between Rs 140 crore and Rs 150 crore per year compared to last year due to AI deployment.
3. What are the growth targets for Bajaj Finance by March 2029?
Bajaj Finance aims to increase its customer base to over 200 million and its cross-sell customers to more than 115 million.
4. How is Bajaj Finance planning to enhance customer communication?
With AI, Bajaj Finance plans to increase targeted messaging to customers from 160 million to over 500 million, enhancing engagement.
5. What infrastructural advantage does Bajaj Finance have for AI implementation?
Having developed a robust cloud infrastructure over the past five years, Bajaj Finance is well-positioned to leverage AI technology effectively.
