HDFC Bank's Digital Drive Is Helping It Carve New Markets

ALWAYS A PIONEER in taking new digital initiatives, the bank has used its digital mediums to outpace its competitors

- Srikanth RP

As a company, HDFC Bank has an asset quality that is unmatched by its peers.Unlike some of its peers, it has no stress on its portfolio, has a huge distribution network that is spread across the length and breadth of the country, and keeps on commanding healthy margins. No wonder, the bank’s share commands a premium, as it has consistently lived up to the expectations of its investors for a long time.

One of the major reasons for the bank’s continued success is the sustained investment in technology, which allows it to significantly automate some of its major processes. And every investment in technology is done from a point of view of scale. The bank now has more than 80% of its customer interactions occurring via digital channels. For example, from just 19% in 2007, the percentage of customer transactions via the Internet or the mobile medium has gone up to 80% (See Graph below)

Says Munish Mittal, CIO, HDFC Bank, “We have always been a bank of scale, and this is the single most differentiating factor in my view.” For example, almost 18 percent of RTGS of the country is processed by HDFC Bank. Even volumes registered via IMPS are bordering close to half a million a day.

Pre-empting the huge rise in ecommerce transactions many years ago, the bank has scaled its systems to match peak e-commerce sales. “We have built our systems to scale 3x, to match big billion day sales. So, we continue to be true to our DNA of ramping scalability.” To ensure security, the bank made huge investments in OTP and two factor authentication.

The bank also invested in a brand new mainframe, and is probably the only bank which continues to run the card host platform on a mainframe.

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