New Delhi: Aditya Birla Capital Ltd (ABCL) is looking to rev up its digital distribution game through its recently-incorporated subsidiary Aditya Birla Capital Digital (ABCD). The subsidiary, which last week received ₹50 crore from its parent, is planning to launch an app soon with an aim to “directly source customers for its financial services offerings,” Pankaj Gadgil, group head-digital platforms, Aditya Birla Capital Ltd, told Mint.
ABCL offers protection, investment, asset creation and transaction-related financial services such as insurance, mutual funds, stock investments, financing, wealth management, and advisory.
“The strategy that we thought through is we said we have a very large opportunity to create an omnichannel platform which will help us acquire digitally at scale, and also allow us to cross-sell from one line of business to another line of business. That is where we created another organization, which is called Aditya Birla Capital Digital,” he added.
The omnichannel business has all three form-factors, which includes 1,400 branches across all businesses and 50% of these branches are co-located – meaning one premise, where some of these companies have branches which can engage with customers deeply. Second form factor is the virtual engagement point, that is, large inbound and outbound call centres to engage and serve customers better.
“And, we have a form factor coming up in the form of ‘mobile app’. This is ABCD’s creation for the overall group (Aditya Birla Group)—which has 20 crore customers broadly. We will be launching this app shortly, catering to all the four requirements of the customer digitally,” Gadgil said.
Last year in March, the subsidiary also decided to cater to the transaction needs of the customers by introducing payments. ABCD, which also houses payments business, will have its own TPAP (third-party payments application provider) payments handle (in simple terms UPI payments handle) and will also be on Bharat Bill Payment System, where customers will be able to transact with the group using the Aditya Birla Pay handle.
Without disclosing the banking partners for its TPAP business, Gadgil said the payments handle will be launched in partnership with one large private sector bank and a medium private sector bank.
“The payments app is part of our overall app built, so it will go live within the app itself,” he shared.
For payments, ABCD launched ‘payments lounge’ last year in June for online payments collection. The payment lounge, which sits on top of all the aggregators, allows “smart” routing of transactions between aggregators and significantly improves success ratio for the merchant who is collecting payments. “Basically, the e-commerce success rates go up to 96-97% with smart routing.”
“We will have the relevant opportunities within the ABGL (Aditya Birla Group Ltd) ecosystem such as some large customer-facing entities like Aditya Birla Fashion etc, allowing us to leverage that ecosystem very well because you will have a platform to integrate. So, that is one of the large pillars of our strategy. Through these digital initiatives, we are fairly confident that first the ABCL companies, then the ABGL and then the open market is what we want to leverage,” said Gadgil, who is also the managing director and CEO of Aditya Birla Housing Finance Ltd. He is also on the board of ABCD.
Just like ICICI Bank looks at iMobile as a property, the new app is going to be for ABCL. “This you have to look more like a player or a digital form factor of a manufacturer.”
ABCL, which is trying to be cautious with its fintech partnerships, especially lending, after the Reserve Bank of India increased risk weight on unsecured loans, is not looking at ABCD as a ‘revenue generating entity’.
Unlike a fintech, which is typically only a distributor, this is coming from the manufacturer and “you are generating lifetime value, for the product that you sell are accruing to all the companies,” Gadgil stressed.
The aim of the entity is to digitally serve our customers and create a direct acquisition engine and create a meaningful cross-sell. “The near term and medium term is clearly to create this as a digital arm for Aditya Birla financial services companies – that’s the primary intention. If the relevant opportunities come and in certain segments where we feel we should have other partners getting onboarded…it’s an open architecture,” he said.
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
