HDFC Bank has made significant progress on the technology front during FY22, making changes at the foundational level, creating new digital solutions and modernising its legacy core, MD & CEO Sashidhar Jagdishan said in his message to shareholders in the bank’s annual report.
“I am happy to inform you that thanks to the progress we have made on our technology investments, processes and governance, the regulatory actions have been fully lifted. We converted the challenge into an opportunity and have made substantial strides in the way we evaluate, manage and operationalise our technology,” Jagdishan said.
In December 2020, the Reserve Bank of India (RBI) had imposed a ban on digital launches and fresh credit card issuances by HDFC Bank, following repeated instances of outages on the bank’s digital channels. The embargo on card issuances was lifted in August 2021, and the bank was allowed to go ahead with fresh digital launches in March 2022.
Jagdishan said that at the foundational level, HDFC Bank has shifted its primary data centres to brand-new facilities in Mumbai and Bengaluru to support higher uptimes and create a robust IT backbone for its operations. It has implemented a clearly defined capacity monitoring programme to proactively manage capacity upgrades across all key applications. A technology obsolescence programme management office has also been put together to plan and replace obsolescent components. The bank has also started putting in place a next-gen disaster recovery (DR) set up for key applications, among other things.
In terms of new digital solutions, HDFC Bank is rebuilding its acquisition processes in partnership with a global technology leader in user experience. “We have already built 10 new journeys and will be rapidly rolling out new journeys every three weeks. This includes journeys across account opening, loans and cards, covering both individual/ MSME customers and both existing and new-to-bank customers,” Jagdishan said.
The bank has already launched Xpress car loans, which is meant to allow existing customers as well as non-customers to avail disbursement in 30 minutes, with credit decisions based on speedy data analysis. In the next few quarters, it plans to launch more digital products and services, including a new payments platform for its customers, a payments platform for merchants and a wealth platform — all in partnerships with new-age tech companies.
HDFC Bank has moved from a system of partner-owned intellectual property (IP) in the realm of technology to an “enterprise factory” setup, Jagdishan said. Under the new setup, the bank’s technology and digital teams will work in a new age startup-like environment and co-create deep-tech IP capabilities, he added.
In order to modernise its core legacy systems, HDFC Bank is following a ‘hollow the core’ strategy. Under a 15-month project, the bank, in partnership with a startup with experience in core banking technology, is co-creating new core banking modules. “This project will enable the moving out of payments module from existing core banking platform and help in creating a fully resilient active-active payments architecture that will ensure minimal payments downtime, even if core banking is not available,” Jagdishan said.
The bank has set up a new centre in Bengaluru, where the team is re-writing the mobile and netbanking platforms. The entire project will be completed in a two-year time frame and will allow the bank to own a modern cloud-enabled platform. HDFC Bank also intends to roll out new features every three to four weeks, in line with digital fintech companies.
Jagdishan said that the bank’s focus on the customer has resulted in an improvement in the bank’s performance on complaints resolution, with customer complaints in the credit cards, debit cards, operations and collections front down by 21%.