Axis Bank PESTLE Analysis
Detailed PESTLE analysis of Axis Bank examining political, economic, social, technological, legal & environmental factors.
Political Factors:
Axis Bank is one of the largest private sector banks in India. It offers an entire range of financial services for personal and corporate banking. This bank gets influenced by fiscal and monetary policies set up by Govt. of India and RBI respectively. It also provides a number of services on behalf of Govt. including tax, pension and e-governance. The govt.-initiated incentives, subsidies and schemes for a common man impacts the bank operations and their business strategies. The Indian Govt. is also cutting down its SUUIT shares by selling its shares in the bank. This bank supports MSMEs and startups in their funding requirements and investments. FDI, mergers and acquisitions, privatization of govt. banks have a severe impact on the business operations of this particular private bank. The government decision to lift high interest rates or paybacks of loan amounts etc. affects the NPA holding in banks. It is important for Axis Bank to follow all political factors to continue increasing its top and bottom line.
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This concludes the political factors in the Axis Bank PESTLE Analysis.
Economic Factors:
Below are the economic factors in the PESTLE Analysis of Axis Bank:
The economic factors are the most important in the financial services provided by banks such as Axis Bank. The inflation, recession, income level and currency exchange rate and risks affect the economic conditions overall for people to invest in, taking loans for home, education etc.
and their consumption pattern. In accordance with the economic downturn due to COVID-19 pandemic, Axis Bank made ensure to set up a separate PM -CARES fund for Rs 100 crore which will support its customers, employees etc. This bank is highly instrumental in changing its lending and borrowing policies, raising capital from shareholders etc. according to the macro and micro environmental factors. With the improving GDP and economic growth, it can be expected that with a high govt. in the union budget 2020-21, consumption, investment and import-export cycle will improve in the favour of private banks.
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Social Factors:
Following are the social factors impacting Axis Bank PESTLE Analysis:
The society and the peer group play an important role in influencing the decision on taking loans, investment in stocks, shares etc. A number of demographics such as age, gender, income level, location and employment impact the purchasing power and accordingly the supply and demand in the market. The banks function accordingly in line with the market scenario and increases/ decreases loan and interest rate to boost the economy. The class structure, women getting employed and joining the workforce, startups funding requirement etc. has an impact on the loan and saving requirements. With rising disposable income, Indians have the mindset to save extra income to earn interest in the future. This bank under Axis HR and Axis Sahyog divisions takes employees’ health and wellness initiatives such as organizing health checkup camps. It is important for Axis Bank to function efficiently towards customer service to become the top priority bank for all individuals and corporates.
Technological Factors:
The technological factors in the PESTLE Analysis of Axis Bank are mentioned below:
With the technological innovations emerging in various sectors and industries, the business models are becoming more efficient and adaptive. Technology is playing a critical role in the banking domain as well. The Indian Government initiative of Digital India is giving a boost to digitize every possible customer service corner including the banking system. Axis Bank gives valuable online services including net banking, money transfer service through digital payment UPI, the invention of bank ATMs present in nearby localities and other customer service requests without need to go to offline branches. This bank is also involved in making strategies to leverage technology in the empowerment of its supply chain partners. Digitization will help in reducing corruption and bringing transparency. Various payment apps and telecommunication online have reduced the dependency to go to the bank physically which consumes a lot of time and effort. The rise of smartphones and internet penetration in the market increases the opportunity for this bank to attract more customers through its mobile based services.
The use of AI, big data and 5G technology makes the operation more efficient by researching on collected data for meeting multiple employees, different stakeholders and customer needs and demands at the same time.
Legal Factors:
Following are the legal factors in the Axis Bank PESTLE Analysis:
Stringent laws regarding customer privacy, their data protection and other RBI and government imposed legal policies and guidelines need to be followed by banks operating in India. Any banking malpractice such as involvement in money laundering, lobbying, corruption etc. can tarnish the bank’s image in the society and lead to legal court action on the bank. The integrity and fair practices of bank employees at all positions is really important to attract more customers in the market. Any illegal practice hurting consumer sentiments can drag the bank into consumer protection courts with heavy penalties and lawsuits. Authority to supervise fraudulent practices is really important for legal banking functioning. There have been past incidences of illegal involvement of some private sector banks in money laundering etc. This becomes important for Axis Bank to be lawful and ethical in its all-business operating processes. For this bank it should be paramount to have the legally rightful business strategies in the banking industry to gain customer loyalty and trust.
Environmental Factors:
In the Axis Bank PESTLE Analysis, the environmental elements affecting its business are as below:
Today banks are not just involved in providing financial services but also involving themselves in the sustainability aspect. It becomes pivotal for the bank to look after the environment in addition to economic growth. This bank is instrumental in contribution towards meeting Sustainable Development Goals. It is reducing its carbon footprint and reducing its greenhouse gas emissions to cut pollution. Like in India, as a part of its CSR it is involved in practices such as afforestation, tree plantation drives taken by Axis Bank Foundation and Axis Cares. It also invests in renewable energy sectors in different cities. It also promotes sustainable agricultural practices in rural areas as well. This bank ensures to undertake energy efficient and saving processes in its business operations.
It is leveraging digital platforms such as cashless transactions, paperless technology, direct benefit transfer etc. to drive more sustainability in its business model. All these environmental factors can give Axis Bank sustainable competitive advantage in the industry.
To conclude, the above Axis Bank PESTLE Analysis highlights the various elements which impact its business performance. This understanding helps to evaluate the criticality of external business factors for any brand.
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