HDFC Bank is unfazed by the plethora of innovations that several financial technology (fintech) companies have brought to the payments space in the last few years. The private lender will “remain as agile as ever” in the changing technological and customer behavioural landscape, says Paresh Sukthankar, Deputy Managing Director, HDFC Bank. In an interview to BusinessLine , Sukthankar says HDFC Bank is well positioned to ride the digital opportunities that have come about after demonetisation. Excerpts:

How do you see modern-day banking in India?

It is about increasing convenience, cutting turnaround time, making it frictionless, and making it intuitive for customers to transact. From a bank’s point of view, it is [about] improving productivity and reducing costs so that you remain relevant on what is being offered to customers and within the cost structures.

What has led to huge growth in digital banking in recent years? Are banks now turning into better managers of data?

The huge enabler is better use of data. There has been more efficient data management within the bank, and this has been supplemented by data availability from other sources, including some unstructured data. Of course, there is larger data play. But it is a combination of physical infrastructure, enabling regulatory mechanisms, analytics, and banks adapting to both their front-end sales and back-end processes. A good example is our successful 10-second personal loan.

What about certain fintech companies becoming disruptors? Do you see them as a challenge?

We certainly do not feel challenged; rather we are excited about leveraging technologies to make a difference to our customers and ourselves. Almost anything fintech companies do for their customers, we can, too. It’s just that we may not necessarily want to do everything, given our customer segments. We, as a bank, are clear that if something is going to disrupt the businesses we do, we would rather be the disruptor ourselves.

I don’t think they (fintechs) are giving us sleepless nights. Incidentally, in a few cases, we work with them.

What about standalone e-wallet providers? Have they not stolen a march over bank-promoted wallets?

The power of a bank wallet is much more than a standalone wallet provided by a non-bank player. In the latter case, you have to first fund your wallet and then use the money parked in the wallet from time to time. But in our wallet it will pull out money from your bank account at the time you want to make the payments. Till that time you don’t need to keep your money idle.

What do you think is future for ATMs which are growing in low single digits? Point-of-sale transactions are up over 70 per cent on a year-on-year basis.

We ourselves have not added too many ATMs last year. ATM [addition] per se is not a parameter to judge if banking is growing or not. I don’t think the era of ATMs is over. Digital banking has more distance to go. Of course, it’s a journey and demonetisation has accelerated that movement; there is no doubt. The number of transactions on digital platforms have stabilised 40-60 per cent higher than where they were in September last year. This will continue. The more the access and more the convenience, it will only go up.

What about data security on online transactions and bank customers being more prone to data thefts?

The entire focus on consumer awareness is the best defence. A lot of control mechanisms are available in the Indian system to protect consumers. One being the two-factor authentication. There is no doubt that lot of risks are being mitigated by players who are providing these services. Is it going to be a real threat? Yes, it is going to be. The mechanism to mitigate the risks and resolve disputes are largely in place.

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