Have redoubled efforts to fix problem of tech outages: HDFC Bank CEO

Irked by repeated outages that the bank faced, RBI had barred it from issuing new credit cards last December and stopped it from going ahead with new digital launches

The country’s largest private sector lender, HDFC Bank, has set its eyes on becoming a technology-led powerhouse by investing heavily in scaling up its tech infrastructure after it faced repeated outages during the past few years on its digital banking front.

In its annual report for 2020-21, the bank said its vision is to build a technology-led Bank. “We are doing this by leveraging our strengths and building for the future”, it said.

Irked by the repeated outages that the bank faced, the Reserve Bank of India (RBI) barred it from issuing new credit cards last December and stopped it from going ahead with its new digital launches.

Commenting on the outages, Sashidhar Jagdishan, MD & CEO, HDFC Bank, said, “ As a bank. we are certainly sorry for what has happened. And have taken this as an opportunity to improve and redouble our efforts to fix this problem for good”.

There was an audit by a third-party tech auditor, appointed by the regulator, from February till April, who prepared a report and submitted it to the RBI. The bank is now awaiting the decision of the regulator now.

The lender is revamping its technology infrastructure by making large-scale investments, wherein it is bringing new talent, getting into cloud-native stacks, a shift from the traditional monolithic IT infrastructures, and working with strategic partners for better products and services.

Jagdishan said, “We have invested heavily in the scale-up of our infrastructure to handle any potential load for the next 3-5 years. We are also in the process of accelerating our cloud strategy to be on the cutting edge leveraging best-in-class cloud service providers.”

Along with that, the lender has strengthened monitoring of its data centre (DC) and has also shifted key applications to a new data centre. Further, the disaster recovery trials and process have been strengthened so that even if there is an outage the downtime can be minimised as much as possible. Although the bank has not had any security issues in the past, however, it has focused on strengthening its firewalls so that it is prepared for any potential security threats. Furthermore, the bank has put in place an enhanced monitoring mechanism across the board to keep its IT systems always “ON”.

“While we execute this technology transformation agenda, there will sometimes be pain and outages beyond our control. But this is the bitter pill we need to swallow”, Jagdishan said. “...we are putting in place measures that will ensure that downtimes will not be prolonged. Yes, it will take some time but we will get around this. And live up to the standards that people have come to expect from us”, he added.

On the business side, the bank has identified growth engines -- corporate banking, commercial banking, rural, government and institutional banking, private banking, retail assets, and payments -- that will constitute the bulk of investments that it is making.

“Our growth engines will be fully supported by our renewed focus and vigour on technology/digital investments that would act as the core backbone to both “Run and Build” the bank, Jagdishan said.

The management had earlier said that it is modernising the existing bank and has created a vertical within the bank called an 'enterprise factory' to keep the banks’ systems always “ON”. And, they have created another vertical called the 'digital factory', housed with very competent resources focused on building a digital platform for the bank.  The mandate of the digital factory is to foster innovations in the product and consumer experience domain through own build or collaborate with new-age fin-tech and big-tech companies.