Will likely enter pacts for co-branded credit cards in a year: AU SFB

AU Small Finance Bank will likely enter into partnerships for co-branded credit cards in next one year, said the lender’s credit card business head Mayank Markanday.

“Normally, people do co-branding to scale up because you can get easy customer acquisition but then easy customer acquisition will be a pain if you cannot engage with those customers,” he said.

“So, we have not gone in too high. We have spent around a year and a half on our credit card journey. We understand the business now. We are finding partners who can marry with us so that their objectives are fulfilled and our objectives can be fulfilled,” Markanday added.

He said they are excited and exuded confidence that interesting players will be joining them.

“That is the future for us. It is not that we will marry a wealthy player or a poor family. We will marry the right partner. That is the criteria for us. If the partnership is fulfilling our objectives, we will not think much,” he said.

The small financier launched its credit card business in April 2021. Its total live cards stand at 3.9 lakh credit cards as on December 31. The bank’s monthly issuance run-rate reached 35,000 cards in December.

Monthly credit card spends surpassed Rs 740 crore in December and spend per card is at more than Rs 19,000 per month, the investor presentation from the bank’s December quarter results showed.

The customisable credit card LiT is the bank’s highest selling variant. On Monday, the bank launched SwipeUp, a platform that enables credit card holders of other banks to upgrade their card to one of AU Small Finance Bank credit cards.

“When you want to take a credit card, you see the value provided to you. So, we are enhancing your value proposition,” Markanday said.

“You see whether your credit limits are as per your need. We are enhancing your credit limit and telling you that this is what we can offer you, that is better than your previous cards. Also, whether the card is as per the right category of spends you have. We are fulfilling that. I think we are putting these three things in a better manner than what is provided to you,” he said.

Broadly, the bank is looking to enhance its technological capabilities in a bid to compete with the larger banks.

“The prime job of any bank is to raise deposits and to make depositors feel comfortable in terms of products, service and convenience. It will be our number one priority as to how much we can get our depositors to trust us. I think tech is the way to get depositors’ trust. This is our priority and we are doing everything around that,” Sanjay Agarwal, managing director and chief executive officer, said.

In fact, the bank is looking to migrate its information technology infrastructure to cloud in 2024.

“We really want to shift to cloud. Our team is working on those lines. We have figured out top 10 applications. It is not an easy subject. Our team is very aware about this. I strongly believe that AU team will pull this off as well. You will see us in cloud more and more from 2024 onwards. We are really focussing on this,” Agarwal said.