AI-Driven Transformation at Bajaj Finance

Bajaj Finance, through its AI initiative - FinAI, aims to significantly enhance its operational efficiency and customer engagement. As a key component of Bajaj Finance 3.0, the company plans to triple lead conversion rates, double back-office productivity, and boost front-line performance by 1.5 times. Rajeev Jain, Managing Director of Bajaj Finance, emphasized the importance of technology in driving revenue growth, reducing costs, and mitigating operational risks.

Over the past year, Bajaj Finance has tested over 30 AI use cases to validate their effectiveness. With 90% of their computers operating on Microsoft Azure and a robust data lake supporting hundreds of thousands of variables, AI integration into their existing cloud and digital infrastructure was a logical next step.

One notable AI application at Bajaj Finance is conversational AI, which will transform static SMS communication into interactive experiences. For instance, customers can specify preferences and receive tailored options, specifications, and prices, potentially connecting them directly to dealers. The company aims to reduce the operating cost-to-net-interest-margin ratio by 100 basis points over the next four years.

Jain highlighted that AI will complement rather than replace existing systems, with essential physical processes like KYC and AML compliance remaining due to regulatory requirements. Addressing the broader lending environment, he noted that while unsecured loans have grown rapidly post-Covid, Bajaj Finance's product mix has remained consistent, and recent credit cost increases are returning to pre-Covid norms.