The new digital platform from Bajaj Finance Ltd is a step ahead in terms of offering services similar to those offered by fintech apps like Paytm, PhonePe, and Google Pay. While phase one of the business transformation journey focused on laying a firm foundation, phase two focuses on improving the customer experience by providing new features and expanding on existing capabilities.
The existing consumer app has 16.5 million active subscribers as of December 31, 2021, whereas the new platform had 6 million. True, rival finance apps like Paytm have a larger user base, but Bajaj can leverage its strengths in the offline channel as a key financier in categories like consumer durables and move revenue-generating consumers to the digital platform.
“While competition in EMI-financing space for consumer durables is increasing, we aren’t as concerned about risk of loss of market-share/ pricing pressure because (1) Banks largely focus on prime and carded customers, (2) Fintechs have yet not developed collection capabilities or fully tested their retail lending modules and (3) while ecommerce platforms are expanding market and/or gaining share from physical stores, physical stores are also putting-up a fight by matching prices or service, especially in segments like electronics,” said analysts at Jefferies India Pvt. Ltd in a report.
“Addition of such partnerships should drive greater engagement and transaction throughput, thus extending the platform from being a leading financial services provider to an omnichannel financial marketplace. Along with customer additions, we would closely track new-to-Bajaj additions through the digital route,” said analysts at JM Financial Institutional Securities Ltd in a report.
All eyes are on the progress of the digital transformation journey as operating metrics hit pre-covid levels.
“We believe Bajaj Finance is catching up well with fintech players in terms of digital interface while delivering profitability, hence we remain constructive on this business transformation journey,” added the JM Financial report.