HDFC: 'One Bank' Focused on Customer Needs

HDFC Bank obtains a 360-degree view of its customers which is used to offer the right products at the right time.
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Business Boost: Close to 2.2 million leads (across deposit, loans, investment, and convenience products) is generated each month with high conversion rates month-to-month and rising.

Since its inception in 1994, HDFC Bank has always been a front-runner in the Indian banking space and is currently the largest bank in the nation by market capitalization. But in order to truly differentiate itself in the market and to fend off competitors who were aggressively marketing retail loans and other products, organizational leaders for HDFC saw an opportunity to distinguish itself over the long term through customer experience.

To help accomplish these goals, the bank needed to develop a more comprehensive, 360-degree view of its customers. In its early days, the bank invested in a data warehouse which enabled the bank to integrate customer data from across different systems. However, there was no single platform that offered front-line decision makers a consolidated view of the customer's entire relationship with the bank.

"We needed a system which could easily integrate customer data and relevant information on customer behavior from all these systems and present to the front line staff in a manner which enables a comprehensive dialogue with customers to fulfill all their banking needs," says Ratan Kesh, head, premier banking, current A/c, retail trade & Fx at HDFC Bank who serves as the bank's "change agent."

Under an initiative called 'One Bank', HDFC Bank leaders not only wanted to deploy a comprehensive CRM system, they also sought to integrate the bank's 20-plus legacy systems under a single application. The system also needed to simultaneously offer the ability to handle large volumes of data on 30 million plus customers and 65 million product holdings and handle more than 50,000 users securely and with varied visibility depending on the user's role.

One of the top goals of the One Bank program was to be able to manage the end-to-end sales process across departments for all products on a single platform. In the past, multiple systems and processes were used for sales fulfillment. This created challenges for the bank's relationship managers, personal bankers, and others to view the current status of customer accounts along with where customers stood in the sales lifecycle.

Moreover, each business line had its own disparate system which created challenges in creating a unified view of all sales and services processes. Without a single system to access all of this information, relationship managers were unable to obtain real-time status of customer account and other information which led to customer angst, says Kesh. It also made it difficult for relationship managers and other bank employees to obtain insights about what customers need, the full suite of products they own, or their behaviors which could be used to shape cross-sell and upsell decisions.

Responding to customer needs

Unlike other banks, HDFC didn't want to buy growth at the expense of profitability. To help preserve profitability, the bank embarked on a two-pronged strategy. First, Kesh and other bank officials sought to raise the bar on its internal processes even though the bank's processes were already best-in -class.

A Lean Sigma team made up of employees with Lean and Six Sigma skills was used to bring best practices from various parts of the bank and integrate those into the 'One Bank' initiative. Also, because the Lean Sigma team works independently from all business functions within the bank and reports to the CIO, the team has a neutral stance and has been able to resolve any functional conflicts by taking a 'One Bank' view. Some of the areas of improvement that the Lean Sigma team helped with included moving from multiple systems to a single, one-stop solution for customer relationship management along with easy access to customer information and offers for cross-sell/upsell.

Second, Kesh and his team wanted to make use of the bank's CRMnext cloud-based CRM platform and other technologies to obtain a unified view of customers by collating and using data from a variety of sources, including mobile and web.

The CRMnext platform has enabled the bank to make personalized offers to customers across various touchpoints they use, including branches, interactions with relationship managers, call centers, ATMs, email, etc. Personalized next-best product offers are crafted based on each customer's product portfolio and the next product they're most likely to purchase based on their current lifecycle status. The identified products are then further ranked in order of preference and are included as part of an account planning tool which is used by relationship managers to have meaningful engagements with customers.

"This has been one of the key success factors for improving lead generation and conversion," Kesh says.

Meanwhile, the increasing use of smartphones and tablets by customers has also provided HDFC opportunities to provide customers with an intelligent and integrated self-service platform to purchase products. To seize on these opportunities, HDFC launched a 'Digital Application Platform' (DAP) as an extension of its CRMnext platform. DAP is a web-based front-end system that's available on all mobile platforms, offering real-time integration to HDFC's core systems, back-office systems, and third-party credit bureau systems. Customers can use DAP to apply for asset and liability products using straight through processing capabilities. This provides customers with faster turnaround times while decreasing sales costs for HDFC, says Kesh.

HDFC's customer-centric sales strategies have led to impressive business results. Close to 2.2 million leads (across deposit, loans, investment, and convenience products) are generated each month with high conversion rates month-to-month and rising. In addition, the bank's customer-led sales efforts have enabled it to become India's market leader in personal loans, auto loans, and credit cards over the past few years.

While CRMnext played a significant role in the bank's market positioning, Kesh adds that the bank's leadership, the strength of its employees, governance processes, product offerings, and service orientation also contributed greatly to the bank's achievements.