Bajaj Finance Unveils Ambitious 5-Year AI Strategy
New Business Plan to Transform Customer Engagement and Operations
Bajaj Finance shares will be under close observation as the company, recognized as India’s largest non-bank consumer financier, announces an innovative five-year business plan. This strategy focuses on fully integrating artificial intelligence (AI) across the organization to enhance various operational facets including customer engagement, revenue growth, productivity, control mechanisms, and cost reduction.
In an interview with Economic Times, Managing Director Rajeev Jain elaborated on the significant transition to a comprehensive AI-based system, emphasizing its potential to improve customer conversion rates at reduced costs while maintaining or accelerating loan growth rates.
Current Progress and Future Goals
“We have already implemented AI in several use cases this year, with plans for full adoption by December 2026,” Jain stated. “Currently, we are saving between Rs 140 crore to Rs 150 crore annually compared to last year’s figures. The potential for improving conversion rates is limitless, and we expect costs to decrease while growth remains steady or accelerates,” he added.
In his presentation to analysts and investors, Jain laid out the company’s ambitious targets: increasing its total customer base from 92 million to over 200 million by the fiscal year ending March 2029, boosting cross-selling customers from 58 million to over 115 million, and enhancing the share of retail credit from less than 3% to over 4%.
Enhancing Customer Reach through AI
According to Jain, the integration of AI will enable Bajaj Finance to connect with a wider customer base more efficiently and cost-effectively. He noted that the approach would free up at least 25% of the agents’ costs, allowing them to engage in more productive activities.
“Currently, we send about 160 million SMS messages, curated from our data. With AI-generated targeted messages, this could rise to over 500 million, significantly enhancing engagement and loan interest. Presently, we can promote personal loans but might not gauge interest in home loans, for instance. AI will empower customers to choose their preferred loans, schedule appointments with sales managers, and even automate the eKYC processes in the future,” explained Jain.
A Mega-Megatrend in the Market
Jain described the adoption of AI as a “mega-megatrend” that will redefine Bajaj Finance’s operational model by March 2029. He points out that audit functions, crucial yet often under-staffed, could greatly benefit from AI applications, achieving 100% accuracy and enhancing assurance functions significantly.
Cost Reduction with AI Integration
Jain also highlighted a rapid decline in the costs associated with applying AI to business operations. He mentioned that tasks previously costing $40 can now be completed for as little as $3 to $9, showcasing an impressive decrease in expenditure.
“To utilize AI effectively, a complete transition to cloud-based operations is essential. We have achieved this transition over the past five years, providing us with a substantial advantage,” stated Jain.
Market Performance Snapshot
On Thursday, Bajaj Finance shares closed at Rs 7,123.05, reflecting a modest increase of 0.1% on the BSE, whereas the benchmark Sensex decreased by 0.29%. The stock has experienced a decline of 2% so far in 2024 and a 5% drop over the past three years, with the company holding a market capitalization of Rs 4,40,914 crore.
Conclusion
Bajaj Finance’s strategic vision for the next five years, particularly its focus on AI integration, could play a pivotal role in redefining its market position and operational efficiency. Investors and market watchers will be keen to observe how these ambitious plans unfold in the coming years.
Frequently Asked Questions
- What is Bajaj Finance’s new business plan about?
Bajaj Finance’s new business plan aims to integrate AI across operations to enhance customer engagement, improve productivity, and reduce costs over the next five years. - What are the projected goals for customer growth?
The company aims to increase its customer base to over 200 million and cross-selling customers to more than 115 million by March 2029. - How is AI expected to impact operational costs?
The adoption of AI is projected to decrease operational costs significantly, with potential savings up to Rs 150 crore annually. - When does Bajaj Finance plan to fully implement AI?
The company aims for complete integration of AI by December 2026. - What was the market performance of Bajaj Finance shares recently?
Bajaj Finance shares closed at Rs 7,123.05, with a slight increase of 0.1% amid a declining market.
