Individual products are launched. If and when we think the market is ready for the right kind of product, we’ll have to pack it all together under the envelope and wrapper of a sofa. We want to go to the market at the right time.

HDFC Bank is going to spread its new digital launches over the coming quarters, now that the regulatory embargo on them has been lifted, Parag Rao, the bank’s head of payment operations and IT, told Shritama Bose. Some parts of the payment ecosystem are not yet ready to go live with Aadhaar OTP based on-boarding for UPI. A launch is only ideal when 90-95% of the system is prepared, Rao added. Edited excerpts:

When will you launch the fully digital challenger bank?
We are currently working on a mobile-only on-the-fly credit card that will also be fully serviced by phone and will not require physical touch. This should be a precursor to many such zero-touch mobile-ready all-DIY products we launch in the market, but we’ll start with credit cards as a priority. We are still studying the market to see what shape and form a digital bank can be introduced to customers in the Indian market. Individual products are launched. If and when we think the market is ready for the right kind of product, we’ll have to pack it all together under the envelope and wrapper of a sofa. We want to go to the market at the right time.

Something for your trading customers?
We have already done a soft launch for our digital trading app called SmartHub Vyapar. This is aimed at medium and small traders. For the larger merchants, we also use the SmartHub Vyapar app with a POS machine as that’s the kind of requirement a larger merchant would have. We are partnering with world leader Adobe to create a highly intrinsic and replaceable customer experience layer for many of our products that are instant and digital. We’ve rolled it out for select products for our existing customers. We are expanding the range to make sure we cover all our products for our internal customers and when we go to market we go for the enhancement layer for new customers. We also focus on refurbishing and renewing our platform for SMEs. The one we have today involves the conventional way of the physical RM approaching the customer and taking care of his various banking needs. The web interface and app interaction will be a fully digital platform where much of the things an SME would want from their service provider are digital and do-it-yourself. This will help us reach many more SMEs.

We are already a market leader in SMBs and this will help us better serve our existing customers and expand into many more areas.

You’ve recouped some of your credit card market share after the ban was lifted, but the trend has reversed since December.
There is a phenomenon that we continue to do constantly in our portfolio, which is removing inactive cards every quarter. Unlike many other players, we don’t keep blowing our numbers. The number published is a net figure, not a gross figure. Our acquisition plans continue to increase. We have exceeded pre-embargo run rates and plan to increase that even further in the future.

The deadline for launching Aadhaar OTP based UPI onboarding is extended. What is the level of readiness in the system?
Well, the fact that it’s being expanded says the ecosystem isn’t quite ready yet. UPI is a highly interoperable, deeply intertwined ecosystem between payment service providers (PSPs), transferring banks and the issuing bank. Even if one leg of it isn’t ready, the entire customer experience of a transaction is extremely bad. So while it is a force of the ecosystem, when making changes or new additions, it requires the entire ecosystem to be at least 90-95% ready for transactions to run smoothly. There are parts of the system that need a little more time. Knowing that, some of these deadlines have been pushed back a bit.


This post Digital credit card becomes a precursor to other DIY products: Parag Rao, Head – Payments Company and IT, HDFC Bank was original published at “https://www.financialexpress.com/industry/banking-finance/digital-credit-card-will-be-a-precursor-to-other-diy-products-parag-rao-head-payments-business-and-it-hdfc-bank/2464975/”

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