Spotlight

ATM banking without a PIN

With a target of achieving more than 25 times growth rate over the next few years, Axis Software is all set to make its presence felt in the global market through its biometric and related technology products. By Kushal Shah

Imagine walking into an ATM without having to worry about remembering passwords and other verification processes. A situation where you are your own password and mode of access where your fingerprints, skin texture, retina pattern or face give you access to your account and let you withdraw money. This is the power of biometrics in financial transactions. The concept of biometrics is not new, but its execution in hardware and that too in ATM transactions, is a relatively new concept. To top it all, when such technologies are being developed out of our own backyard for the global financial sector, it makes news. Pune-based Axis Software is coming into the limelight for its product development in biometric-based devices and other offerings, primarily for the financial sector.

The funding process

Abhay Khinvasara, Founder and CEO, Axis Software, came to India after working with NASA to set up a product company in India, at a time when the world was looking at the country for its IT services capabilities. In April 2001, he established Axis Software in Pune.

“We had thought of making a products company in India when everyone else was talking about services. I have always felt that products strengthen the core of the country’s economy, which services fail to do. It gives a brand value to the country,” states Khinvasara. Another reason for setting up a product organization was to grow rapidly, which according to Khinvasara, cannot be achieved in the services industry. The company is presently headquartered in Pune, which is also home to its R&D centre and only development centre. It has offices in Surat, Nagpur, Hyderabad and Jalgaon.

Axis Software was started without any support from venture capitalists. Khinvasara and the other founding members raised money on their own and to date it remains an independent entity. In the early days of the company, they freelanced for other companies creating Web sites and doing related technical jobs. In their efforts to raise more money and showcase their skill sets in innovation, they developed a tool called Axis Jaikisan, which was on the lines of ITC’s e-Choupal for rural India. This tool was ahead of its time and was even acknowledged by the PMO. Later, they found a suitable buyer for the technology.

This sale managed to increase their capital and they went on to make their first product called Logical Access Control System, which focused on digital signatures and computer access control. Once again they found a buyer for this from Taiwan, who in turn, sold it to another company in the UK. In this way Khinvasara kept building his organisation’s capital to make it big in the products space. Khinvasara made and sold many products similarly for a while to raise money before he actually thought of commercially selling his innovations in the market.

Domain monopoly

After working on aerospace and optical surveillance, Khinvasara wanted to play it safe in choosing his area of work, and opted for his area of expertise as his business line. He wanted to tap a technology that had not been implemented widely. He chose to go with biometrics and encryption-based products, which would basically cater to the financial market and the government sector. In a broad perspective, the term “Biometrics” is used to refer to the emerging field of information technology devoted to automated identification of individuals using biological traits, such as those based on retinal or iris scanning, voice patterns, dynamic signatures, fingerprints, face recognition, or hand measurements, especially for the purpose of authentication.

Making this technology as its area of focus, Axis started dealing in PIN and biometric-based, full-featured ABMs (Automated Banking Machines), ATMs and the backend systems that are required to run them. It also sold kiosks for various transaction applications such as check cashing, loan applications and ticketing, attendance and access control systems (both logical and physical), large database systems for civil identification and criminal justice systems. The company focused on all three areas—hardware, software and integration.

As an organization Axis made a splash with its most famous product, the Biometric ATM, which is its highest selling product across the globe. “We had expertise in areas like biometrics, encryption, RFID and PKI. We have combined all of these and made products which can be called true Biometric ATMs and are in sync with the backend in real-time,” says Khinvasara.

After the success of Biometric ATMs, and looking at its growing usage, the company decided to make the life of ATM owners a bit less cumbersome.

Axis recently came up with a smooth transition-based product called Retro Fit Kit, which has come straight from its R&D lab and is waiting for a patent. This innovative product will easily convert a card-based ATM to biometric-enabled one, without much change needed in the hardware. Apart from this innovative exercise, the company is coming up with Linux-based Biometric ATMs. It is continuously hunting for new technology which can be productized with ease. With a product portfolio that includes Logical Access Control System, AFIS, Biometric ATM, PIN ATM, Financial Transaction Switch, Retrofit Kit, ABM, and various kiosks, Axis Software is looking to dominate its domain.

Abhay Khinvasara (Left front), Founder and CEO, Axis Software Pvt Ltd demonstrating one of his Biometric ATMs which is currently being used by Citigroup in India

Global reach

The company boasts of more than 140 clients, mostly government and financial bodies. At present, it has clients in the US, UK and Africa, these geographies account for over 80 percent of its business. Rapidly growing financial markets in these countries and relatively faster adoption of emerging technologies are the major reasons for its global reach.

Khinvasara says, “The Indian market is moving slowly and companies here are risk averse. They are slow adopters of new technologies and this is the reason for low penetration in India. The biggest adopters are government bodies, but due to stringent procurement policies it is difficult to do business with them.” On the contrary, most global government bodies are quick to respond and adopt a technology if it suits their requirement without thinking over much about the company which is offering them.

Axis recently won a large order from the UK government—the Commonwealth Business Council (CBC), which is essentially trying to deploy a large number of ATMs in Africa. This is a part of the ‘Banking the Un-banked’ and other financial inclusion initiative that many governments are contemplating. This apart, the company is dealing with the Iranian nuclear facility for its requirement of biometric products. With many prestigious corporate and government clients across the globe, Axis Software has made a mark for itself in this domain with real competition coming from only one company in particular—AGS InfoTech, which is based out of Germany.

Usage of biometrics is generally associated with rural areas where it is difficult to deal with illiterate people. But Axis does not see a big opportunity in that space unless government and financial institutions give a helping hand. When this happens it would like to tap the rural markets in India. Currently, in terms of banking usage, Citibank India is using its Biometric ATM devices. Lack of confidence in new players is one of the major reasons for low penetration in India.

Khinvasara says, “It will take a long time for the Indian financial market to grow as fast as the US or similar markets, but by that time if we are getting good recognition we would like to establish ourselves in the global market.”

A flat organization

In India, it is common for the best talent to head towards big companies irrespective of their work profile. Axis focuses on hiring freshers and training them as per its requirement. The company believes in grooming bright young people for higher responsibilities.

The organization does not believe in strict hierarchies. Khinvasara likes to promote a culture of freedom and constant communication. The organization takes great pride in its flat structure where every employee can give ideas and can walk into anyone’s office. Being an R&D based organisation, employees are given a lot of room for trial and error. They are encouraged to learn from their mistakes. This approach has been a source of encouragement and motivation for the young professionals who work in the company.

Ambitious targets

Axis Software has ambitious targets for the near term. The company, which is currently showing revenues worth Rs 18 crore, is looking to close this year with about Rs 80 crore in revenue (more than 400 percent growth). It is looking to reach the Rs 450 crore mark by 2010. The growth plans are ambitious from a layman’s perspective, but are realistic for the company since it deals with products with a major overseas client base.

As part of this growth strategy, the company has a new headquarters in Pune with an area of 35,000 sq ft, which will accommodate 350 people involving an investment of Rs 25 crore. It plans to set up satellite offices globally in the US, Europe and the Middle East. For funding, the company is now looking at equity or debt rather then venture capital. Khinvasara is looking at a strategic partnership which can help his company grow as fast as possible. Giving the five-year roadmap, Khinvasara says, “This is going to be a big company in next five years. It has the right ingredients, the right product mix and the market is also saying that we will grow.”