2025, Vol. 6, Issue 2, Part C

The banking industry is undergoing a transformative shift, driven by rapid advancements in digital technology that enhance customer experiences and operational efficiency. In India, this digital revolution is significantly impacting Small Finance Banks (SFBs), with AU Small Finance Bank (AU SFB) emerging as a leader in digital innovation. Since transitioning from a Non-Banking Financial Company (NBFC) to a Small Finance Bank in 2017 under the Reserve Bank of India’s (RBI) license, AU SFB has integrated technologies like artificial intelligence (AI) etc. to streamline operations, improve customer relationship management, and enhance risk assessment. The bank’s digital strategies include mobile and online banking platforms, digital payment solutions, and robust cybersecurity measures, all contributing to greater financial inclusion and operational efficiency.
This study employs a descriptive research methodology, utilizing secondary data from annual reports, industry publications, and scholarly articles to analyse AU SFB’s digital transformation. While digitalization has significantly improved the bank’s operational efficiency and customer satisfaction, challenges persist. These include cybersecurity threats, limited internet access in rural areas, digital literacy gaps among customers, and the need for seamless integration between digital and traditional banking services. The findings highlight that overcoming these barriers is essential for sustaining AU SFB's growth and competitiveness. This research provides valuable insights into how SFBs can effectively harness digital technologies to drive financial inclusion and operational excellence, offering a model for other institutions navigating digital transformation in emerging economies.