HDFC Bank: A touch of digital in every process

Without ease of use, intuitiveness and relevance, no digital initiative can be a success with customers, says Nitin Chugh, Country Head – Digital Banking and Personal Liabilities Products, HDFC Bank

We have digitized the entire bank. Any place that you touch, the bank has witnessed digital transformation. It definitely translates to a lot of changes in the processes within the bank and what we launch for our customers. We have been working on digitization for around three years now.

What is mostly visible is the rollout done in the last 18-24 months for our customer facing initiatives. For example, we have completely digitized our loan workflows which make it possible to process a loan in 10 seconds. We have been able to give approvals in a product called Wedrive for car loans where one can walk into a dealership and through bio-metric authentication, one can get loan approval in 15 minutes. Another option is to take instant top-off of the car loan on any other product through Quick money or Quick Paisa which is for two wheelers. Customers can also apply through ATMs where they get a disbursal immediately and withdraw cash. They can also avail instant loan against fixed deposits or securities. The ten second loan has been one of our pioneering initiatives that no other bank has been able to crack so seamlessly.

In the area of lending, we have covered the most used products by our customers and each one has been digitized. Wherever we cannot do a ten second loan, we have another workflow where approval is given within 10-15 minutes.

The second area touched by digitization is around the payment side with multiple solutions. The payment mechanisms in the country today are either card based, account based or wallet based. We are present in all three of them through different properties. We launched one click payment solution, Chillr for account based payment. We have mVisa and we are also launching UPI soon. There are other payment methods as well coming up wherein one can make the same payment in the same manner, but in a different way. For example, in Bangalore we are testing Soundwave based payment. We also introduced missed call banking in 2013, largely in the area of banking but it has been extended in the area of payments as well. One can recharge using a missed call which is a first of its kind service.

In the area of banking, all transactions are available on the Internet and mobile. That is where we follow the principle of ‘Bank Aapki Muthi Mein”. There are lot of small transactions, for example, opening an account is done in five minutes in our branches. Booking a general or life insurance can also be done online. When we went into the category of wearables we introduced an application for AppleWatch. Thus, we are in every single category that makes sense for our customers.

We also launched things like SmartBuy portal which takes into account day-to-day stuff like grocery, shopping, travel, hotel bookings, bus bookings etc. Through the portal, we have aggregated deals from various partners for discounts which are featured on it.

Focus on SMEs
We have solutions on SME side as well. There is a digital portal for SME where all conversations can happen through the portal. To deliver banking services from a financial inclusion perspective to the rural masses in 2013, we launched our missed call banking platform wherein one can do 5-6 transactions just by giving a call on a toll free number.

In 2012, we had come up with a website which was targeted at people who had browser but used feature phones. This year, we have also created a light app which is 1 MB, so just while downloading one needs data, but post that, the data is not required. The missed call banking has been a huge runway success for us. People with both user feature and smart phones use it frequently. There are varied amount of options available to them to avail services in both assisted or self-service mode.

When it comes to UPI, it is going to benefit all the banks and especially customers as there will be interoperability of payments which will give them the freedom to use the banks they trust the most. With our positioning as a bank which really understands and emphasizes with customers, we believe we only have to gain from this.

Internal translates to external, When it comes to digitization for internal staff, we look at it in three parts. Thus, first is the bank, second is the employee and third are customers. We make a bank digitally enabled through processes, work flows and the way in which information travels etc. As a starting point a lot of effort is put into ensuring that employees are comfortable using these technologies.

Whenever we have to launch something, we test it on our employees and gauge their response. As we might be offering the same service through multiple channels and platforms, the employees make sure that the customer uses the one which they are most comfortable with. Lot of training and internal tools are provided to the employees for internal workflow which prepares them for using and communicating it.

We attract a lot of good talent, and since we are expanding, we hire a lot of people. They are very keen to learn and how they can use their own knowledge of digital technologies. It is a combination of the way the organization is structured, how we enable employees and how we intervene through systematic HR learning and development.

Three years ago, we had only 40% of transactions going through the mobile and Internet. As of March last year, we had 71%. At the same time, the total volume of transactions has also gone up. Thus, 2/3rd of our transactions are going through the Internet and mobile.

Laying the groundwork for the next frontier of digital
Banking transactions will always form a huge chunk of various other transactions as it is done much more regularly and frequently. Something like FD or loan is a one time thing.

The first quarter of last calendar year, we introduced online submission of Form15GH. which is for exemption of tax largely used by senior citizens. We always believed that although they were active on Internet, for this particular transaction, they chose to come to our branches. We witnessed 60-70% of users migrating to this service within three months. We expected that customers would take more time migrating to this. However, they adopted it very quickly. Similarly with missed call banking, within three months we had almost 10 lakh people using it. It is paramount to make these services designed around simplicity, ease of use and intuitiveness. The bank can offer ten different ways of doing one kind of transactions but the customer will use the one which is the simplest to use.

We have done few of the initiatives with the Fintech community. However, most of them have been done in-house or through a technology partner. For Chillr or Soundwave initiative, we identified lot of Fintech players. It is an ongoing process. And maybe in the future, we will have 30-40% of mix coming from Fintech.

Our digital strategy is a full reflection of our business strategy. It is only about how to change the way one delivers the business strategy rather than changing the business strategy itself. That being the case, I do not foresee why the business model or strategy will change in the future. What will change is the efficiency from what we have already done and how to make it even more relevant and contextual for customers. It will be augmenting our existing capabilities leveraging robotics, AI, process automation, smart work-flows.

As a principle, any technology that can help us deliver a better service, experience, communication, we are experimenting with all those technologies. For example, there is a concept of hyper-localization. Our vision is that can we give the customer a solution or an offer on the call itself based on what the customer has said, what he is planning to do next etc. Can I give the customer some solution or offer which is relevant for next five minutes? This is also where Fintech community will play a role, as a lot of them have cracked how to deliver hyper-localization and some of them we have cracked, so it will be an interesting collaboration. It might not work if the customer feels we are intruding too much into their privacy, but at the other end of the scale it could be wildly successful. You never know how an initiative will or won’t work out in the end. However, it is a new concept and we want to give a try.

We have a very strong foundation which we call as First wave of digital. Now, we are building even finer capabilities and working towards building next frontier of digital banking.

– As told to Abhishek Rawal and Jasmine Desai

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