Tuesday,27 February 2024

A ‘phygital’ approach and innovative digital solutions power HDFC Bank’s branch banking

5 min read

Interviewed By Siddharth Chandani

Arvind Vohra, country head of retail branch banking at HDFC Bank explained how the bank’s service-first culture and analytics-led value proposition is driving growth.

HDFC Bank continues to strengthen its customer-centric approach predicated on acquiring customers for their lifetime and offering a wide gamut of services to serve their evolving needs.  

The bank doubled its retail customer deposit franchise using an analytics-driven customer acquisition engine. New-to-bank core customer relationships grew exponentially during the last three years from 700,000 to 800,000 per quarter before the COVID-19 pandemic, to approximately 2.2 million customers per quarter in financial year (FY) 2022-23.

 Arvind Vohra, county head for retail branch banking at HDFC Bank attributed this to the bank’s multi-format distribution strategy for one-click customer experience and onboarding. The bank uses artificial intelligence (AI) analytics around customer conversations and their digital journeys to predict and offer timely products and services. 

Refreshingly, the bank refrains from treating savings account holders as ‘liability relationships’ but looks at them as ‘core customers’ to partner with as their lifetime financial services provider. The bank leveraged analytics to develop next best action (NBA) plans. HDFC Bank’s NBA sits at the intersection of the credit axis and customer propensity, helping the bank to curate highly relevant product propositions and solutions for its customers.  

Vohra said that retail deposits have grown by 22% against a system growth of around 9.5% percent. Customer lifecycle engagement through basic customer-need identification and engagement has also propelled the growth of third-party businesses such as insurance, mutual funds and systematic investment schemes. 

Vohra noted: “Despite the doubling of the retail franchise and a large book, the quality of our loan book continues to be healthy and amongst the best in the industry with gross non-performing assets at 1.23% of gross advances.”

About 93% of the bank’s transactions in FY 2021-22 was digital. With more than two thirds of savings accounts being digitally originated and 78% of fixed deposits opened digitally, the bank counts around 50% to 60% of customers as digitally active. 

HDFC Bank continues to go full throttle on expanding its physical + digital, or ‘phygital’ or smart branches as digital banking units. Vohra added that this not only simplifies the way the bank works and realises cost efficiencies but importantly, ‘phygital ‘units are able to offer a far superior customer experience than the one the industry is currently benchmarking against. 

 


Institutions: HDFC Bank
People : Arvind Vohra
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