From Dawn to Digital.
In 2014, Aditya Puri traveled to
California to take a close look at the disruptions that were being
discussed. He visited Mastercard Inc. The agenda of the trip was to understand the changing landscape of the financial services sector.
During his trip, he noticed & heard few phrases "Silicon Valley
will eat your breakfast & lunch",
"Banks will be reduced to pipes",
"People won't need banks but
only banking", & so on.
He linked Fintech companies operating in payments space, faster loan approvals than old world rivals, virtual relationship
management & advisory, e-shopping & building better financial products for customers.
He noticed:
The fintechs were not in the process of transforming into financial institutions; they were riding on top of the banks, disrupting their business.
He questioned:
Why don't we disrupt ourselves
instead of waiting to be disrupted by fintech companies?
Why can't we give a loan in 10 seconds? Why can't we invent something to transfer money in just a click? Why can't we reduce the friction in the banking system? Why can't we reduce the cost to revenue ratio by 5%-7% over five-six years?
The key was not competition but
collaboration & white labelling
products.
If HDFC Bank was at the top in the physical space, why HDFC Bank couldn't be the leader in online space? - Puri's ideas were
evolving around this one theme.
He returned to India & called up a meeting.
Four kinds of Fintech companies
responsible for disruptions in the
financial services space.
1) Loan dotcom companies processing loan approvals at the speed of light.
2) Payment companies such as Alipay & Applepay.
3)Wealth advisories using mathematical algorithms to advise customers based on their risk profiles
4)The payment wallets
The strategy of technology cos was to ride the banking platform by having an app & offer services in a more convenient manner without chaning the fundamentals
Mr. Puri decided to Disrupt itself (Hdfc Bank) instead of allowing
a third party to do that. He decided to rapidly transform Hdfc Bank to digital bank by putting right elements & technology in place.
He told the group heads that they would have to look at changes, absorb them & strategize on their businesses.
He was clinical in his approach,
asking everyone to set a date for
conceptualization & implementation of action plans.
Source: HDFC Bank 2.0
(From Dawn to Digital)
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