HDFC Bank Expects Higher IT Spends As It Revamps Technology Platform
HDFC Bank branch. (Photo: BloombergQuint) 

HDFC Bank Expects Higher IT Spends As It Revamps Technology Platform

HDFC Bank Ltd. expects IT spending to rise over the next two to three years as India's largest private lender revamps technology platforms and spruces up its digital offerings after facing regulatory ire over multiple glitches .

"The management is clear that we will spend whatever it takes. We are moving to global benchmarks on IT spends," Ramesh Lakshminarayanan, chief information officer and group head-information technology at HDFC Bank, said in a briefing on Thursday. The lender is not looking at it as a cost but as investments for growth, he said, adding that as customer experience and business improve, the spends will normalise.

In December, the Reserve Bank of India had stopped HDFC Bank from issuing fresh credit cards and announcing new digital initiatives following multiple technical glitches over the last few years. The regulator also called for a third-party audit of the bank's IT infrastructure.

"A third party audit was conducted by the regulator and a report has been submitted to them," Lakshminarayanan said. "We await further directions from the regulator. We hope that we will come out of the embargo soon."

Laskhminarayanan took over as the bank's CIO in November after Munish Mittal, who handled the bank's technology transformation, quit to pursue higher studies in July last year. Mittal's exit had followed two other high profile departures. Ashok Khanna, head of the bank's auto loans division; and Abhay Aima, head of private banking; also quit last year.

India's largest private bank is focusing on improving the internal IT platform and providing better digital offerings to customers, he said. It's looking to roll out new digital initiatives and products over the next 15-24 months, Laskhminarayanan said.

BloombergQuint earlier reported that the bank aims to roll out some of its digital initiatives under what it calls the "digital factory" in 12-18 months.

The rollout, however, is still contingent upon an approval by the RBI.

Other key highlights from Lakshminarayanan's briefing:

  • HDFC Bank is trying to address the design challenges in the lender's IT infrastructure.
  • Can only work toward minimising challenges, can never eliminate issues.
  • Moving away from a monolithic IT infrastructure approach to a more cloud-based microservices-focused approach.
  • Trying to address critical problems such as payments, cards and customer experience first, within short cycles.
  • Tying up with strategic partners for better products and services.
  • Started on improving HDFC Bank's technology platforms much before the Reserve Bank of India announced strictures in December.
  • Recent digital outages at the bank were largely because of hardware or process failures. Not facing capacity constraints in the infrastructure.
  • Continue to invest in growing the capacity of the technology platforms at the bank
  • Technology architecture and design must remain with the bank.
  • Trying to develop more software internally and own intellectual property rights. Don't believe in outsourcing too much.
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