Whalesbook
L&T Finance is taking a strategic step into cloud technology to manage the high costs of adopting artificial intelligence. Managing Director and CEO Sudipta Roy announced the company is constructing its own private cloud infrastructure. This project is expected to reduce compute expenses by an estimated two-thirds when compared to current hyperscaler services, a move critical for the company's ongoing AI integration plans.
Cutting AI Costs with Private Cloud
Roy explained that while AI offers efficiency, its deployment involves substantial costs for development, upkeep, licensing, and computing power. L&T Finance has seen its compute costs rise by 50-60 percent annually as AI integration deepens. Building a private cloud directly addresses this challenge, giving the company greater control over its infrastructure and expenses. L&T Finance plans to migrate key applications to its private cloud within the next 18-24 months, once sufficient experience and reliability are achieved.
Cyclops AI Boosts Loan Underwriting
Among its AI successes, L&T Finance launched the Cyclops platform in June 2024 for two-wheeler loans. This system uses deep-learning algorithms to analyze credit bureau information, banking data, and alternative sources like UPI transactions for underwriting. Cyclops employs 18 parallel scorecards, leading to much stronger underwriting results than industry norms. The Cyclops loan portfolio now totals ₹3,000 crore with a credit cost of 2 percent, significantly lower than the industry average exceeding 7 percent. This advanced AI helps accurately identify creditworthy versus risky borrowers.
Expanding AI for Customers and Payments
L&T Finance is also using AI to improve customer interactions. Its AI-driven collection system supports over 10 languages and is set for further expansion. The company is working with VoiceAi, Sarvam, and ElevenLabs for its voice AI platform. Roy estimates that AI bots now manage over 80 percent of pre-delinquency calls, saving the company ₹50-70 crore in the last six months. Additionally, L&T Finance intends to introduce an AI-powered payments business by December, aiming to offer innovative digital transaction methods to its 2.8 crore customers.