Union Bank of India is investing Rs 1,600 crore this fiscal to strengthen its technological capabilities in building a digital platform.

The mobile app, Union Vyom, is the flagship investment in technology as the state-run bank seeks to build and add more features than the State Bank of India’s Yono. In the previous fiscal, the bank had invested less than Rs 1,000 crore.

Ever since A Manimekhalai took charge as the managing director and CEO, the focus has been to upgrade the bank’s technology and increase customer engagements through field visits and town hall meetings in major cities.  

The bank has already started acquiring customers through its super mobile app in a big way. Tapping customers on the asset as well as the liability side, the bank recently launched the app with 350-plus features. It has more than 20 million registered users and daily hits of 2.2 million upwards.

“On the liability side including fixed deposits and recurring deposits, we have opened 2.5 million accounts. And on the credit side, we have disbursals of Rs 1,600 crore through the mobile app itself in the form of pre-approved personal loans and MSME credit to our customers,” said Union Bank of India executive director Nitesh Ranjan.

The bank has over 150 partnerships with fintechs companies. “While we partner with fintechs, all data that gets generated is stored with our servers. This ensures data protection,” said Ranjan.

The bank offers 20 lending products through its mobile app. Plan is afoot to introduce products on the deposit side which can be completely digital. The bank is also using analytics in a big way to have more than one engagement with its customers.

“We have identified people inside the bank for grooming digital talent for the future. We are also in the process of hiring certain more skill sets to drive this digital technology. We have a dedicated technology officer to push our digital initiatives,” Ranjan said.

The bank’s premium education loans and women entrepreneurship programme called Union Nari Shakti are available on the mobile app. The objective is to bring more customers on board through the mobile app.

The bank is seeing a 40%-70% growth in all its digital platforms like the UPI, internet banking, mobile banking and debit cards. 

“A greater number of retail loan originations are coming from our digital channels. We will be deeply engaged in further creating the capabilities for digital transformation over the next 12 months. Our aim is to have 50% of the business originations coming from digital channels by 2025,” said Ranjan. 

The bank is focussing on the RAM segment (retail, agriculture and MSME) to grow its retail book. During the quarter ended December 2022, the bank grew the RAM segment at 17.8% year-on-year, with retail growth being at 16.6%, agriculture at 17.6% and MSME at 19.6%. The aim is to originate and onboard much of this retail growth through the digital channels.