Retail Banking Services

The objective of the Retail Bank is to provide its target market customers a full
range of financial products and banking services, giving the customer a one-stop
window for all his/her banking requirements. The products are backed by world-
class service and delivered to customers through the growing branch network, as
well as through alternative delivery channels like ATMs, Phone Banking, Net
Banking and Mobile Banking.

The HDFC Bank Preferred program for high net worth individuals, the HDFC
Bank Plus and the Investment Advisory Services programs have been designed
keeping in mind needs of customers who seek distinct financial solutions,
information and advice on various investment avenues. The Bank also has a wide
array of retail loan products including Auto Loans, Loans against marketable
securities, Personal Loans and Loans for Two-wheelers. It is also a leading
provider of Depository Participant (DP) services for retail customers, providing
customers the facility to hold their investments in electronic form.

HDFC Bank was the first bank in India to launch an International Debit Card in
association with VISA (VISA Electron) and issues the MasterCard Maestro debit
card as well. The Bank launched its credit card business in late 2001. By March
2015, the bank had a total card base (debit and credit cards) of over 25 million. The
Bank is also one of the leading players in the “merchant acquiring” business with
over 235,000 Point-of-sale (POS) terminals for debit / credit cards acceptance at
merchant establishments. The Bank is well positioned as a leader in various net
based B2C opportunities including a wide range of internet banking services for
Fixed Deposits, Loans, Bill Payments, etc.
Products of HDFC Bank

HDFC bank provides very large range of financial product to the customer for their
better financial transaction. The product of HDFC bank are

Savings Account
Everyone needs a savings account to store away the surplus cash. The bank offers
savings accounts under various types starting from basic accounts to premium
accounts with variety of features. The interest rates on the Savings Account are 4%
p.a. which is calculated daily on the end of day balance.
Salary Accounts
The bank offers multiple types of salary accounts to suit the needs of all types of
corporate. The salary accounts offer various features to the accountholders like free
insurance coverage.

Current Accounts
Current accounts are required by businessmen and professionals who have regular
transactions through the bank. The account deals mainly in liquid deposits and
allows unlimited number of transactions every day like funds being withdrawn or
cheques being written against the account without worrying about the balance in
the account. Professionals, traders, SME businessmen, agricultural businesses can
avail various benefits like fund transfers between all HDFC Accounts, free local
collections through cheque and fund transfers as well as easy inter-city banking.

Deposits
Individuals who wish to save money for a longer term with a view to earn a higher
rate of interest seek to invest money in term deposit accounts which guarantee
higher interest rates. HDFC Bank also offers various types of deposit accounts
promising high interest rates for customers seeking deposit accounts.
Rural Accounts
Accounts offered by the bank to farmers for their banking needs. there are 2 types
of rural accounts available:
 Basic Savings Bank Deposit Accounts – Farmers
 Kisan Club Savings Accounts
Loans
HDFC bank is a leader in home loan sector and also offers various other kinds of
loans at attractive interest rates for various needs of the individuals.
Credit Cards
The bank has a wide range of credit cards for customers which promise special
offers and privileges on dining, movies, lounge access of airports, etc. The cards
also offer Reward Points on every spending made by the cardholder which can be
redeemed for attractive offers.

Debit Cards
HDFC Bank offers Debit cards with every Savings Account to customers which
are safer than carrying cash because they require a PIN every time they are used,
they provide great discounts and cash back on fuel, shopping, dining,
entertainment, etc. and are used across almost all outlets for payment.
Demat Account
HDFC Bank issues Demat Account for investors like traders, long term investors
as well as beginners for a flexible and customized solution. The demat account
offered by the bank is safe and dependable for buying and storing a customer’s
equity investments, mutual funds, IPOs, ETF Exchange Traded Funds like Gold
and Index, bonds and NCDs. The account can also be opened online and the types
of Demit accounts offered are as follows:

Insurance
HDFC Bank offers both life and non-life products to its customers. The life
insurance products are issued in association with HDFC Life Insurance Company
Limited and the non-life insurance products are issued in association with HDFC
Ergo.
 SWOT Analysis of HDFC Bank

Strengths

 HDFC bank is the second largest private banking sector in India having
4,715branches and 12,260ATM’s.
 HDFC bank is located in 1,174 cities in India and has more than 800 locations to
serve customers through Telephone banking.
 The bank’s ATM card is compatible with all domestic
and international Visa/Master card, Visa Electron/ Maestro, Plus/cirus
and American Express. This is one reason for HDFC cards to be the most preferred
card for shopping and online transactions.
 HDFC bank has the high degree of customer satisfaction when compared to other
private banks.
 The attrition rate in HDFC is low and it is one of the best places to work in private
banking sector.
 HDFC has lots of awards and recognition, it has received ‘Best Bank’ award from
various financial rating institutions like Dun and Bradstreet, Financial express,
Euromoney awards for excellence, Finance Asia country awards etc.
 HDFC has good financial advisors in terms of guiding customers towards right
investments .

Weaknesses
 HDFC bank doesn’t have strong presence in Rural areas, where as ICICI bank its
direct competitor is expanding in rural market.
 HDFC cannot enjoy first mover advantage in rural areas. Rural people are hard
core loyals in terms of banking services.
 HDFC lacks in aggressive marketing strategies like ICICI.
 The bank focuses mostly on high end clients.
 Some of the bank’s product categories lack in performance and doesn’t have reach
in the market.
 The share prices of HDFC are often fluctuating causing uncertainty for the
investors.
 Opportunities

 HDFC bank has better asset quality parameters over government banks, hence the
profit growth is likely to increase.
 The companies in large and SME are growing at very fast pace. HDFC has good
reputation in terms of maintaining corporate salary accounts.
 HDFC bank has improved its bad debts portfolio and the recovery of bad debts are
high when compared to government banks.
 HDFC has very good opportunities in abroad.
 Greater scope for acquisitions and strategic alliances due to strong financial
position.

Threats

 HDFC’s nonperforming assets (NPA) increased from 0.18 % to 0.20%. Though it

is a slight variation it’s not a good sign for the financial health of the bank.
 The non banking financial companies and new age banks are increasing in India.
 The HDFC is not able to expand its market share as ICICI imposes major threat.
 The government banks are trying to modernize to compete with private banks.
 RBI has opened up to 74% for foreign banks to invest in Indian market.
DIGITAL BANKING

MEANING AND DEFINITION

“Digital Banking – a new concept in the area of electronic banking, which aims to
enrich standard online and mobile banking services by integrating digital
technologies, for example strategic analytics tools, social media interactions,
innovative payment solutions, mobile technology and a focus on user experience.”
Digital banking is:

 Delivering a customized but consistent FI brand experience to customers

across all channels and points of interaction...
 ...underpinned by analytics and automation...
 ...and requiring a change in the operating model, namely products and services,
organization, culture, and skills and IT...
 ...in order to deliver demonstrable and sustainable economic value.

Digital Banking is the application of technology to ensure seamless end-to-end

processing of banking transactions/operations; initiated by the client, ensuring
maximum utility; to the client in terms of availability, usefulness and cost; to the
bank in terms of reduced operating costs, zero errors and enhanced services.
Benefits to the bank:

 Lower operating costs through;

 the elimination of costly back-office processing operations,
 fewer (or ideally no) errors,
 smaller branch footprint (the typical branch can become a kiosk affair,
providing technology interfaces for the client to use plus the ability to deal with
banking specialists via a video link) – a minimum number of actual staff will be
required.
 Concentrating banking/business specialists in a single centre, who are then
available to clients via a technology link (either on their mobile, pc or via a
kiosk branch).

Benefits to the customer:

1. Improved services and product offerings;

i. 24/7 bank services and availability through your mobile, pc or kiosk
branch,
ii. ‘smart banking’ applications that allow ALL transactions to be completed
from the device of your choice, from beginning to end (with clear
instructions and fail safe mechanisms),
iii. access to a FULL range of services (savings, investments, insurance,
loans, mortgages, foreign currency, etc.),
iv. new useful client services such as warnings, notifications, budgeting,
expenditure analyses, savings programs, calculators (you name it – the
range is endless),
v. Lower charges (and therefore cheaper banking),
vi. Banking that meets the client’s needs (not the banks)
vii. Banking will mean digital banking from 2015
2. 69% of customers already use the Internet to buy financial products
3. Customers are willing to pay for digital banking
4. Banks need to improve their digital offer to attract new customers

Digital banking is set to overtake branch networks as the preferred access channel
for how customers will interact with their bank by 2020.
Immersed in digital
Digital communication is pervasive; from mobile phones to tablet computers, we
are immersed in digital. Recent development of new digital features has led to:
 Improvements in user-experience design through interactive, game-like
interfaces that are starting to merge the boundaries between the real and
the virtual and bringing data to life through rich visualizations.
 Advances in mobile devices and networks, providing new services such as
enhanced digital security and the ability to access the Internet from anywhere
(partially limited by high international roaming charges).
 The rise of social media and collaboration tools, empowering customers and
employees, and moving control of the ‘brand message’ from businesses to
consumers.
 Innovation in digital analytics and predictive models, driving deeper insight
into customers’ behavior and enabling highly targeted and relevant treatment
strategies to be executed through digital media.
 New channel integration technologies, enabling a more seamless end-to-end
experience for customers with their bank.

New Generation is fully embracing digital communication and is the customer

group with whom banks need to establish customer primacy relationships. The
advantage of being the primary bank is increased share of wallet and higher
revenue over time, based on a strong sense of customer loyalty – and good
customer service.
PwC research shows that Generation Y are more than 20% more likely to use, or
consider using online or mobile banking services, than Baby Boomers and nearby
twice as likely as ‘matures’. According to this research, their primary bank is
consistently more likely to be the bank of choice for customers when they are
planning to buy another banking product.
Consumer expectations are changing with digital interaction

Present day consumers expect high quality digital communication. Rich content
including elegant designs, instant search results and interactive features. Bank
websites, especially online banking sections, are now required to offer a pleasant
experience while remaining highly functional.
It is still common for banks to send out account statements using the postal service;
however, for many people digital banking offers 24/7 account balance control –
there is a clear preference, especially for younger customers, to want instantaneous
access to their accounts. The posted account statement is snail mail in comparison.
The utility of snail mail, by contrast, is rapidly dying.
Consumers have access to more information than ever before, they now
communicate with more people and more frequently – traditional word-of-mouth
has a completely different meaning when one considers the immediacy of
Facebook, Twitter or even email. Access to information and the ease with which
consumers can share views with those they know – or even ‘the world’ – is
dramatic. Good experiences can be easily shared online... as can negative ones.
It is important that banks understand the importance of customer thinking in
deciding where to trust their money and in choosing their primary banking
relationship. This has long-term influence personally, but also as an element of
influence on their friends and those they communicate with online.
Banks should consider four main aspects of a robust digital offering:
1. Customer attitudes and behavior are changing
2. Digital is preferred globally.
3. Digital is a part of Generation Y’s lifestyle and this is the key time for them to
decide on their primary banking relationship.
4. Digital is evolving – technology devices and software all serve to disrupt
traditional means of communication. Simultaneously, each brings opportunity.
Security is the foundation of digital banking
Security extends from the bank’s hardware to the user’s device – whether a
PC/Mac at home, an iPad or the newest Smartphone. In all cases, digital banking
must employ robust security technologies which protect the communication, user
information and the bank’s IT infrastructure.
Indeed, it is clear that for digital banking to be a rewarding experience for the
customer and a profitable growth area for the banks, technology partners, payment
processing service providers and mobile phone operators – there ought to be a
comprehensive agreement on shared technology standards and processes. The
European Commission has just issued a Green Paper, ‘Towards an integrated
European market for card, internet and mobile payments’ which addresses many of
the issues while being much broader than online banking itself. Luxembourg’s
LuxTrust is a strong step here in moving digital banking forward in terms of a
security standard.
Digital in Private Banking
Private Banks have been slow to introduce digital technology applications for their
customers arguing that the private banking industry is a personal and pre-
dominantly face to face business with little need for such applications to enhance
the relationship. Security and privacy issues are two of the reasons cited for not
embracing these new developments.
However, there are a number of arguments for private banks to seriously evaluate
their digital strategy and make it one of the cornerstones of their service offering
and brand building activities. As the next generation of private banking clients start
to dominate, private banks will need to avoid the image of an old out-of-date bank
that has lost touch with its clients.
Private banking is about being a trusted advisor as well as being connected and
recommended. Since the digital revolution, which started in the 1990’s, people are
increasingly turning to the Internet not only to inform themselves regarding
financial products but also the reviews of other customers using the products and
services. Customers are already using social media to share their views on financial
products and services.
There is some recognition here in Luxembourg of the increasing place digital
communication is taking, as noted in The PwC Global Private Banking / Wealth
Management Survey 2011 which found that 38 percent of private bankers expected
to interact more with their clients through social media in the next two years and
that 56 percent of private banks expected to use mobile technologies over the same
period.
 Digital Services at HDFC Bank

HDFC Bank provides a very good digital service to the customer for their
transaction. Through these services the customer of the bank can also access their
transaction. Digital services include-

1. Fund transfer

HDFC Bank allows various categories of Fund Transfer options for safe and
secure fund transfers which make banking easy. The fund transfer options are:

E-Monies National Electronic Funds Transfer: Which is easy, fast and

convenient and supports fund transfers from any bank branch to any other bank
branch anywhere in India?
RTGS Fund Transfer: Real Time Gross Settlement is the fastest form of inter-
bank fund transfer in real time which is speedier, faster and has no geographical
limits.
Visa Card Pay: A facility used to pay multiple Visa Credit Card bills issued by
any bank form the comfort of one’s home and the payment is safe and charges at a
negligible fee.
IMPS: Immediate Payment Service from HDFC Bank is an instant real time inter-
bank electronic fund transfer service which can be done even on Sundays or Bank
holidays or late at night.

2. Online Banking
With an increasing trend of internet usage, everything has been digitalized and the
bank is not behind in this race. The bank offers the facility of Online banking to its
customers which is safe and reduces unnecessary hassles of visiting the branch to
carry out any transaction. Online banking service offered by HDFC Bank includes:

Net Banking: Net Banking is HDFC Bank’s Internet Banking service. Providing
up-to-the-second account information, Net Banking manages customer’s account
from the comfort of costumer’s mouse- anytime, anywhere.
Say goodbye to long queues and paper work. Presenting one more way for Net
Banking. Customer can now call the Phone Banking numbers in your city to
register for Net banking.
Net Banking offers a host of banking transactions from the comfort of the
customer’s home. One can check the bank account balance, book a Fixed or
Recurring Deposit, recharge the mobile or DTH Connection, paying off utility
bills, paying taxes, applying for IPO, invest in Mutual Funds online to name a few.
The process is fast and completely secured without having to worry about any
fraud or theft.
Bank industry leading service provides a host of features at customer finger-tips:
 View Account Balances & statements
 Transfer Funds between accounts
 Create Fixed Deposits Online
 Request a Demand Draft
 Pay Bills
 Order a cheque Book
 Request stop payment on cheques
 And lots more

Benefit of Net Banking

Internet Banking is the most convenient and powerful way to manage customer’s
account. Net Banking is Real Time, giving them up-to-the-second details on
customer’s account. It can be accessed anytime, from anywhere, giving them
complete control over their finances. There are no queues to stand in, or turn to
wait for. With Net Banking you are in control.
HDFC Bank’s Net Banking is secure. Using industry-standard technologies and
infrastructure, our service gives you peace of mind. So next time you think of
visiting your branch, switch on your PC instead. View the Net Banking Demo and
see how easy it is it use.

Credit Card Net Banking: Through this facility the customer can view the credit
card activities online, pay the credit card bills, view Credit Card Statements online,
know the unbilled transactions and get the complete account information
Email statements: A savings or a current accountholders are eligible to get their
account statements on their email id. The Savings accountholders get a monthly
statement and the Current Accountholders get daily, weekly or monthly statements.
The statements are free of cost and display all the relevant transactions of the
relevant period.
Loan accounts online: This feature enables the bank to provide post loan services
to the customers. Loan customers of the bank can log in and view their loan
summary, transaction history and loan account details.

3. Phone Banking
The bank extends banking information to your phone where information is
available at the end of a simple phone call.
The customer can also call the bank and effect transactions over the phone.
Transactions like reporting loss of ATM, credit, forex or prepaid cards, checking
account balance and cheque status, ordering cheque books, stopping cheque
payments, credit card related queries can all be solved by a call to the bank’s phone
banking division.
Now your bank account is now just a phone call away. Through Phone Banking
you can:
 Check your account balance.
 Enquire on the cheque status.
 Have a mini statement faxed across to you.
 Request for a cheque book / Account statement.
 Enquire on your fixed deposits / TDS.
 Open a fixed deposit
 Request for Demand Draft / Managers Cheques.
 Transfer funds amongst your linked accounts
 Pay utility and HDFC Bank Credit Card bills.
 Do stop cheque payments.
 Report loss of your ATM /Debit Card.
 Product information.
4. Mobile Banking
By simply downloading the bank’s app on your smart phone, you can avail of over
75 transactions. The application is secure and fast. Mobile is now your bank! Now
access your bank account and conduct a host of banking transactions and inquiries
through your mobile, with our unique Mobile Banking services.
Mobile Banking is a service that allows you to do banking transactions on your
mobile phone without making a call, using the SMS facility.
Uses of Mobile Banking:
Mobile Banking service provides a host of features at your finger-tips through
SMS:
 Get your balance detail
 Obtain your last 3 transactions details
 Request a cheque book
 Stop a cheque payment
 Enquire cheque status
 Request an account statement
 Get fixed deposit detail
 Pay your bills

How does it work?

Mobile Banking works through a set of text massages (SMS). With SMS you can
perform a wide range of query-based transaction from your Mobile Phone, without
even making a call.
All you need to do is to type in the specified code for the transaction as a text
massage and send 5676712.
See designated codes for GSM Phone.
See designated codes for Reliance India mobile Phones.
You will receive the response in form of a text message on your mobile phone
screen within a few seconds.
 DIGITAL INITIATIVES

Private sector lender HDFC Bank launched nationwide campaign to position itself
as a premier digital bank.
Integrated, nationwide brand campaign “Har Zaroorat Poori Ho Chutki Mein, Bank
Aapki Mutthi Mein... the campaign will reinforce bank's position as India's premier
digital bank".
Some initiatives are-
PayZapp– A complete payment solution for all your needs.
Chillr – App to enable customers to send money to any person on phone contact
list.
Digital Wallet -to transact on any website for HDFC Bank and non-HDFC Bank
customers.
.

HDFC Bank’s PayZapp

As smart phones are turning into wallets, several startups and banks have launched
mobile applications to enable peer-to-peer transactions, micro-payments as well as
payment solutions for merchants.
The latest initiative in HDFC Bank's digital banking offering christened
#GoDigital, 'PayZapp', allows one-click payments for all your spends.
 PayZapp offers easy checkout using a single PIN without the need to enter
credit/debit card details or a code or OTP for the second factor authentication. The
wallet in the app is linked to your credit and debit card and acts as a virtual card - a
virtual international card that you can use for any transactions across the globe.
It doesn't have any transaction limit as well. Also, the app allows users to transfer
money instantly to anybody using a mobile phone or an email ID.

HDFC Bank to introduce Digital Wallet #GoDigital

 Available for HDFC Bank customers and all other debit and credit card
holders
 Accessible from mobile app and online, as well as enabled with NFC for
contactless payments

HDFC Bank is all set to launch a digital wallet and an electronic marketplace for
various online merchants. Once an account holder or credit card holder registers
for a digital wallet, he can transact on most websites using only his wallet
credentials. The wallet will not be restricted to HDFC Bank customers, but also
allow non-HDFC Bank debit and credit card holders.

HDFC Bank is the market leader both as a card issuer and in processing card
payments for merchants, and accounts 40% of e-commerce transactions. With the
shift from desktops to mobile phone, mobile devices account for half of the
purchases in terms of number of transactions.
However, the complexity of entering card details onto a phone screen also leads to
high level of failed transactions. A digital wallet meets Reserve Bank of India’s
requirement of two-factor authentication but does away with the hassle of filling
card details every time. Also, the digital wallet – which can be accessed from a
mobile app or online – will be enabled for contactless payment using Near Field
Communication (NFC) by flashing the phone in front of readers that can accept
NFC payments. Also, the customers will not need to store their card details on
third-party websites, and as a bank, the details are in any case entrusted with the
bank.

In a standard credit card purchase, the number of steps can go up to 11-12

including filling in the 16-digit card number, name, expiry date, CVV and other
details. Our digital wallet will enable the transaction to be completed in two steps,
which substantially cuts down the failure rate on mobile phone purchases, which is
as high as 50%.
– Parag Rao, Senior EVP and Head (Card Payment Products), HDFC Bank
According to industry estimates, by 2020, 30% of all digital payments will be done
using a digital wallet. HDFC Bank’s new offering, in line with the Go
Digital initiative, attempts to offer the “The future of mobile payments”

TRADITIONAL BANKING VS DIGITAL BANKING:

1. Banks exist physically for serving the customers whereas Internet banks do
not have physical presence as services are provided online.
2. Traditional Banking consumes a lot of time as customers have to visit banks
to carry out bank transactions like — checking bank balances, transferring
money from one account to another. It does not consume time as customers
do not have to visit banks to check bank balances or to transfer money from
one account to another. Customers can access their account readily from
anywhere with a computer and internet access.
3. In traditional banking people have to visit banks only during the working
hours. Internet banking is available at any time and it provides 24 hours
access.
4. Traditional banking does not encounter e-security threats. Online banking is
the tempting target for hackers. Security is one of the problems faced by
customers in accessing accounts through internet.
5. ln traditional banks, the employees and clerical staff of the bank can attend
only few customers at a time. In online banking, the customers do not have
to stand in queues to carry out certain bank transactions.
6. In traditional banking customers who often travel abroad cannot pay close
attention and control their finances whereas in digital banking customers
who often travel abroad can have greater control over their finances.