HDFC Bank and technology moved hand in hand to transform the

banking experience. Some important technology backed milestones

are

Appointed as clearing bank by NSCCL (NSE clearing ltd) in 1996 which brought inroads to
deepen CASA by getting CA of big brokers and their clients. Eventually managed to get
current account of depository itself.

Launched online real-time Net Banking in 1999 which helped in acquisition of HNI
accounts resulting in CASA growth.

First Bank to launch an International Debit Card and became the in November
1999, enabling account holders to their access bank account from anywhere in the
world. This was the first international debit card in India that was launched in association
with Visa International which made HDFC Bank the preferred banker of NRI

In the year 2014 HDFC Bank lunched the missed call banking service allowing customers
to use banking services without having to visit the Bank or connect online for better
banking convenience

On 16 June 2015 HDFC Bank launched the 10-second personal loan approval service
thereby becoming the first in the retail lending space to fully automate the process of loan
approval and disbursement which made the unsecured retail advances (Personal Loan) grew
by 3x in 2 years

In 2016 HDFC Bank introduced loans at ATMs as the country's first innovation to turn
ATMs into Loan Dispensing Machines (LDMs) further extending the functionality of the
Bank's ATMs. Customers can get the loan amount credited directly into their account within

seconds by completing four simple steps

 Digital Ecosystem and The transformation

Source : Investors Presentation May 22

Strategic Tie Up for digital transformation

The backbone of HDFC bank were the partnership with below IT companies

In 1995 the Inroads to NSCCL and retail core banking system was backed by I-Flex/OFSS
by Oracle erstwhile Citicorp Information Technology (CITIL)
Tandem helped in non-stop platform and ACI (in 1996) for the Base 24 software for
ATM switches

In 2001 Tally Solutions Pvt Ltd was partnered for corporate banking and TCS in 2003 for
realtime online stock broking

Odyssey Technologies (2000) & Hitachi Data Systems (2000-01) for ATM and its switches

Back in 2008 CRMNext & Posidex in 2009 were the popular tool which helped for
managing customers and increasing sales productivity.

Digital Strategy
 Digitisation is a strategic focus area for HDFC Bank, and an important marker
of its performance. Since inception the bankhave led the digital transformation of
the Indian financial services sector and continue to invest in technologies to
improve customer experience and enhance efficiencies . The key enablers are

Source : HDFC Bank Limited Integrated Annual Report 2020-21

Analytics based pre-qualified offers and pre-approved offers : System-generated sanctions

and Straight through processing of limits

Analytics-based assessment of credit risk and business potential : For account conduct and
monitoring , reduction of TAT , gives a comprehensive view of customer relationship.

Enabling differentiated experiences through applications, APIs and analytics

Applications : SmartBuy’ and ‘PayZapp’

SmartBuy is India’s first bank-initiated marketplace offering the best deals, accelerated
rewards and experiences to customers. It drives high loyalty as it covers all key categories
like travel, hotels, e-shopping, rail & bus bookings, electronics and so on. The platform has
strong brands and partners like MakeMyTrip, Yatra, Flipkart, Amazon, IRCTC, to name a few.

PayZapp is a comprehensive mobile payment solution offering ‘many ways to pay’ with a one
tap experience. The app enables customers to do several online payments and is accepted
by over 2,000+ online merchants and brands

API's :

Banking now happens beyond the bank. APIs allow seamless and secure exchange of
information between the Bank systems and others. This enables the bank to make their
products and services available outside their platforms to all our merchants and on platforms
that the customers prefer (ecommerce sites, messaging apps, modern trade POS, among
others).
Benefits of API Banking

• Direct integration and Instant solution – Real time solution for processing banking
transaction
• Secured medium of integration – Exchange data or files in encrypted environment
• Highly efficient mode of banking – Reduce turn-around time of banking transaction as
initiation as well as reverse status available on customer system on real time. Easy
reconciliation
• Saves time - No need to visit bank or uploading transaction files manually.

Omni-channel marketing campaigns : Powered by the data stack, the bank conduct highly
personalised and orchestrated campaigns. This enables customers to view the same communication
across all digital channels – website, email,SMS, WhatsApp, paid channels, chatbot Eva, NetBanking
and Mobile app. This helps to increase the brand recall, purchase
consideration and effective business growth

SMACIT ( Social, Mobile, Analytics, Cloud, and Internet of Things) : Leveraging on centralized
platform for an omni-channel business to provide its journey from phone to web to mobile.
Digitally capable to design more competitive products and services on single platform that defines
a powerful, readily accessible technologies. Intent on delivering unique, integrated business
capabilities in ways that are responsive to constantly changing market conditions.

Cautious about the emergence of blockchain : It is a distributed, secure ledger technology for
transactions. The First block chain project in the country went live some months ago, wherein
MonetaGo developed a block chain platform for the Trade Receivables Discounting System
(TReDS) or bill discounting exchanges. Block chain solutions are demanded to bring,
operational, efciency,simplicity,and transparency in banking operations. It also enhances
banking experiences for customers by reducing transaction time from hours to seconds.
HDFC is cautious to enter this mechanism.

The banks vision is to build a technology led bank. They are doing this by leveraging their
strengths and building for the future for which the bank launched its Digital Strategy 2.0 in
May 2022 .Some key aspects are

To move from “a multichannel to an omni-channel experience"

For customer service and delivery : When customer starts a transaction journey on the
mobile phone, completes two steps over there and decides to leave it for some
reason; he then comes back after two days and logs onto the Internet on his
desktop and not on the mobile phone—in this scenario, we will be able to pick up
the conversation from there.

Platform-led approach :

The digital approach has been a platform-led approach. The bank figured it out
early on not to take a product-specific or channel-led or segment-led approach—all
these should be subsets of a platform-led approach

HDFC's digital strategy is centered around (a) Increasing efficiency, (b)

accelerating geographic expansion, (c) raising customer convenience and ease,
and (d) competing against disruptive technology

Not jumping at everything new : Not to get tempted by something that is new and looks
nice". It has to fit into “overall road map, business model and strategic vision". For example
“holographic conversations"—a technology bank chose not to pursue. “It sounds good, but
are our customers ready for something like this? Statement of Mr. Chug (CTO) : Would
they want to talk to a banker who is really a holographic image? Probably not—not yet.

Humanoid IRA (Intelligent Robotic Assistant) and the chat bot EVA (Electronic Virtual
Assistant) :

While IRA can guide people at a branch to find the relevant counter for them, EVA
can answer common queries of users who log on to the bank’s website. In the first
week of EVA’s launch, the chatbot crossed a hundred thousand interactions and on
a given day and went up to a concurrency of 750 conversations. That is something
only a bot can handle

The bank has also launched a Facebook Messenger bot that allows users to do
transactions such as bill payments, mobile recharges and even booking Ola or Uber
cabs. Chugh and his digital innovation team at the bank are now working on
building more features—hotel bookings, for instance.

The comparison of HDFC Bank Ltd and six other banks (ICICI Bank,Axis
 Bank,Kotak Mahindra Bank , SBI , PnB and IDBI bank) is listed below

HDFC OTHERS
Active Technology Product 6 22
Under development
(Platform based , as the
bank wants to shift on omni
channel for better user
interface and experience)
Active Tech Count 77 89
Growth in Traffic on 30.35% 17.91%
DIGITAL PLATFORM
Growth in UPI switch 7X 5X
volume (upi finanacial
transaction)
Digital Core Banking 95.70% 79.00%
transactions
Zero Touch Products (PL) 2X 3.8X
as the bank was first to
offer such products growth
in last few years is less in
terms of % but high in
volume
Application transaction 60% plus 48.00%
Volume
Mobile App and Net 4.1 Star 3.8 Star
banking rating
Digital banking Snags (As 8.00% 27.00%
per 2021 based on reports
of RBI.The volume of
complaints was higher in
other banks if compared to
single player)
 Source : RBI Website , bfsi.economictimes.indiatimes.com/news/banking ,researchgate and
https://www.businesstoday.in/industry/bank

(Use either table or graph)

Fintech Vs Banks

Most traditional banking systems are also backed by Fintech and Fintech products. Although
fintech's are commonly viewed as a disruption to the banking industry, the benefits cannot be
matched.Fintech are bridging the gap between what traditional banks offer and what the
modern consumer has grown to expect. Some of the differences are listed as

FINTECH BANKS
CUSTOMER BASE IS NOT LOYAL LOYAL CUSTOMER BASE

BETTER MARKET REACH LIMITED MARKET REACH

NO REGULATOR HAVE REGULATOR

CAPITAL AT MORE RISK CAPITAL AT LESS RISK

LESS TRUTWORTHY MORE TRUTWORTHY

LESS MANPOWER AND REAL ESTATE MORE MANPOWER AND REAL ESTATE
REQUIRED REQUIRED

MIDDLEMEN OF BANKING SERVICE BANKS CAN PLAY THE FINTECH GAME

TOO
 HDFC-PAYTM PARTNERSHIP

HDFC and PAYTM have entered into strategic partnership wherein the bank will
leverage the technology of Paytm to enter into multidimensional space of
ticketing,booking, lending and Buy Now Pay Later. Lending on Patym is backed by
HDFC bank

Reference :

The Express Computer // Article by Mr. Mohit Rathod // Why HDFC Bank
is India’s first ‘Make in India’ catalyst

HDFC Bank Limited website // TECH& DIGITAL LANDSCAPE // Part of

investor presentation

HDFC Bank Limited Integrated Annual Report 2019-20 and 2020-21

Designing Your Business for the Digital Economy // Jeanne Ross,

Director and Principal Research Scientist at MIT Sloan.

Information Technology in Indian Banking Sector Some Recent

Developments by C. Vijai, Vel Tech Rangarajan Dr. Sagunthala R&D
Institute of Science and Technology and P Anitha