Live Research Project – HDFC Bank’s Strategy for 2020 using video as a channel

1. About HDFC Bank

The Housing Development Finance Corporation Limited (HDFC) was amongst the first to
receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in
the private sector, as part of RBI's liberalization of the Indian Banking Industry in 1994.
The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its
registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled
Commercial Bank in January 1995.

2. About Industry Academia Program

Industry Academia is an initiative of HDFC Bank to partner with top Engineering and MBA
institutes across the country, in an effort to innovate with Fintech start-ups at the beginning
of their journey to success and to find innovative ideas to bring digital transformation. The
objective is to identify Fintech start-up ideas that have products or applications which can
cater to the financial sector and thereby help HDFC Bank explore opportunities to enhance
the synergy for its banking services.

3. About the Project

What should be the Bank’s strategy for 2020 using video platform as a channel?
Powerful forces are reshaping the banking industry, creating an imperative for change.
Banks need to choose what posture they want to adopt - to lead the change, to follow fast,
or to manage for the present. Whatever their chosen strategy, leading banks will need to
balance execution against 6 critical priorities and have a clear sense of the posture they
wish to adopt.

1. Customer centricity – Hyper personalized offerings

2. Talent – Retain the experience
3. Big Data – Analyse the data to understand consumer behaviour
4. Channels – Identify new ways to connect to the customers
5. Innovation – Be it a new Bank or a traditional Bank, it needs to review the way it has
traditionally done business
6. Technology – identify a robust backend for uninterrupted supply of services

The Banks are left with two options majorly:

i. Stick with the methods of traditional banking

ii. Play along the demands of the changing times

The first is an option if the plan is to become redundant and dispensable in the future.
However, if the plan is to thrive, the second option is an obvious choice. Customers want
and expect quick results. Banks have to keep up with customer expectations at all times.

The above thought has led to a sea of change i.e. from a human led approach of physical
offerings through branches, the time is changing drastically an “Online only offering” what
people say, “The Amazon Way”. It’s a tactical shift from physical visits and time-consuming
paper work to being migrated towards use of paperless services, biometric authorizations,
using virtual assistants, smart devices, voice enabled services, video Banking etc. and
 more importantly “Inclusive Online Banking”. This change is being led by the low-cost
producers who believe in the theory that every product should be profitable on a
standalone basis.

To this, while HDFC Bank has been the pioneer in taking the digital approach with majority
of the transactions done via the various digital mode; it is looking for the next generation
of innovative customer touch points which will help in seamless consistent service delivery
of its various channels / products etc. primarily using video & voice as channels.

Objective: HDFC Bank believes that usage of ‘Video, Voice and Personalization’ as a
communication & customer service medium will drive its next phase of hyper localized
customer connect. While considerable work is being done on voice through speech
analytics, voice biometrics, use of virtual assistants etc, HDFC Bank is inviting suggestions
for the next set of tools / solutions / ideas which will help it in connecting with its users
“online” using video as a Channel and have a positive impact on the customer loyalty.

4. Research objectives

HDFC Bank wants to strengthen its Communication Strategy with the best communication
tools- Video + Personalization +Voice -
a. How can a Bank use video channel effectively for customer connect like using
Personalised Video Marketing for communication, Search Engine Optimization in
Video Platform created especially for HDFC Bank?
b. What should be HDFC Bank’s strategy for 2020 using video as a channel

Expectation

A research outlining the following parameters for using video as a Channel: -

a. Global trends and best global practises (Banking & Non-Banking)

b. Leading global solutions, software, organizations etc.
c. How to use Personalized Video Marketing through Social Media Channel, SMS, Email,
Notifications
d. Banking & Customer Connect –Implementation of these solutions in Indian Markets
e. Customer segment analysis - Is there a necessity for communication / services in
regional languages?
f. Using video effectively as a primary channel till 2020?
g. Benefits, Challenges & Security Concerns
h. Preparing for the future - What next after voice & video?
i. Whether Bank should create a Video platform like you tube using
j. Using Video channel for WhatsApp for Business Accounts

(Both qualitative & quantitative analysis would be preferred)

Projects executed in HDFC Bank

Currently, HDFC Bank has implemented the following solutions however it is being done
in silos and no dedicated channel is available.

a) Video Banking – To help users connect with their relationship managers for interaction
from Mobile Banking App
 b) In-App video notifications – For delivering video notifications inside apps
c) Personalized Video Marketing (Campaigns, Products, Offers, Account Statements
etc.) – To send customized videos with personalized content to users via SMS, Emails
(Reference: - http://tinyurl.com/ycjhnooc)
d) Product Training Videos – Manual guidance (demos) using video for various
transactions (https://www.youtube.com/user/hdfcbank)
e) Providing Live Assistance remotely – To assist users remotely for application filling or
query resolution.
f) In-Video text search – To enable user to use text search to reach a dedicated location
within a video “contextual search”

5. Shortlisting Process

 The students will be provided 4 weeks to submit their entries in the campus round
 Shortlisting will be based on the following criteria:
o Strategic depth of issues analysed
o Quality of analysis (Numerical and Research based analysis)

To know more about Industry Academia please follow the link: Industry Academia

Please direct your questions to hdfc@chaturideas.com

Few Statistics for your reference

 Smartphone devices across the globe grew at a CAGR of 17% as compared to 9.5%
growth in all mobile devices. It crossed 2 billion marks in 2014 and are expected to
reach 4.6 billion by 2019. This increase in the number of mobile devices is making it
easier for consumers to access video content on the go.

 In 2014, the smartphone mobile data traffic alone stood at 1.73 EB per month (69% of
global mobile data traffic), which is expected to grow 10-fold from 2014 to 2019, a
compound annual growth rate (CAGR) of 60%. With better networks, coverage, and
advanced technologies (3G, 4G / LTE) the data consumption across the globe has
risen.

 Fuelled by increasing smartphone penetration and affordable data pricing in the

country, the number of "digital only consumers" of content is set to more than double
to 4 million by 2020, a report by Ficci-EY has said.

 As per a report titled, 'Reimagining India's M&E sector' it is estimated that there are
around 1-1.5 million "digital only consumers" in India today, who do not normally use
traditional media" this customer base (is expected) to grow to around 4 million by 2020
and generate significant digital subscription revenues for the media and entertainment
(M&E) sector

 Online video consumption grew almost five times in the country in 2017, with 96 per
cent
 of all usage focused on long-form video, according to a report. With affordable data
prices, the last 12 months have seen higher video consumption in smaller towns, which
are contributing more to the phenomenon, Star India's streaming
platform Hotstar's India Watch Report noted.

 Cities with populations between 1 lakh and 10 lakh clocked the highest growth in watch
time at 4.3 times and many cities like Moradabad (22 times), Allahabad (13 times),
Hubli (12 times) and Sonipat (12 times) are making big leaps, even above the overall
national index growth, it pointed out. Also, as per a survey by Kantar IMRB ICUBE
2017, about 58 per cent of the respondents in rural areas accessed the internet to
stream videos.

 One of the primary reason attributed to the growth of online consumption in rural areas
is the sudden expansion in 4G offerings by telecom operators. IAMAI, in its report,
mentioned that in rural areas, much like in the urban markets, 87 per cent of the users
consumed internet on their mobile phones. The affordability and multifunctionality of
smartphones make mobile as the device of choice for users in both rural and urban
India. This, in turn, means that the bulk of internet traffic is routed via mobile data
packages. The advent of services like Reliance Jio have revolutionised mobile internet
and going forward, introduction of better quality of service via spread of 4G technology
and adoption of 5G will be critical for internet penetration in India.

 A report released by Google and KPMG last year estimated that 536 million Indian
consumers are expected to use regional languages for online services by 2021,
compared with about 199 million users who are expected to access the web in English.

 According to a survey from the Internet Advertising Bureau, financial advertisers have
increased investment in digital video by 79% and mobile video by 53% since 2016.
The same survey also found that 83% of respondents cited direct engagement with
consumers as a key reason for increased video investment.

 Indians’ appetite for binge-watching online videos is set to make the country among
the top-10 over-the-top (OTT) video markets in the world in four years. With major OTT
players, including Netflix, Hotstar and Amazon Prime Video, pushing deeper into
people’s living rooms, the OTT video market in India is growing at a CAGR of around
23 per cent, revealed data from PwC.

 With the increasing penetration of smartphones, data becoming affordable and ever-
growing availability of content, 80 percent of internet users across all age-groups in
the country are accessing YouTube, Google India said on 23 March’2018

 With affordable data costs, increasing penetration of smartphones and an ever-

growing availability of great content across native Indian languages, YouTube now
reaches around 225 million monthly active users on mobile alone. By 2020, the total
number of users in India, consuming online video is expected to reach 500 million
(FICCI-EY Report 2018). According to the available data, 65% online video viewers
subscribe to channels on YouTube and 85% of them go and watch a new video within
 2 days of its uploading while 71% of Online Video Viewers go first to YouTube to watch
video to learn something.

The above points have been summarised to highlight the following: -

 Increasing adaption to smartphones across geography

 Increasing availability of better connectivity (3G / 4G / VoLTE etc.)
 Gradual shift of consumer behaviour towards mobile content (specially video)
 Gradual shift of strategy towards customer connect using digital content
 The ability to connect with remote customers

Global references

1. https://www.econsultancy.com/blog/68377-how-barclays-transformed-its-
video-content-strategy
2. https://www.idomoo.com/
3. https://www.finextra.com/newsarticle/29347/wells-fargo-hails-video-banking-
pilot
4. https://www.indusind.com/personal-banking/payment-service/services/video-
branch.html

Reference sources

5. https://www.pwc.com/gx/en/industries/financial-services/banking-capital-
markets/banking-2020.html
6. https://www.allerin.com/blog/retail-banking-2020-why-everyones-talking-about-
it
7. https://www2.deloitte.com/content/dam/Deloitte/in/Documents/technology-
media-telecommunications/in-tmt-rise-of-on-demand-content.pdf
8. https://economictimes.indiatimes.com/tech/internet/online-video-consumption-
grows-5-times-in-2017-report/articleshow/63029284.cms
9. http://indianexpress.com/article/technology/tech-news-technology/rural-
markets-rising-online-video-consumption-at-heart-of-indias-next-internet-
growth-driver-5074621/
10. http://www.ey.com/Publication/vwLUAssets/EY-digital-opportunity/$FILE/EY-
digital-opportunity.pdf
11. https://timesofindia.indiatimes.com/business/india-business/indian-video-
streaming-grows-23-yoy/articleshow/64488591.cms
12. http://businessworld.in/article/YouTube-Reaches-Around-225-Million-Monthly-
Active-Users-On-Mobile-In-India-Google/26-03-2018-144571/
13. https://thefinancialbrand.com/70010/mobile-video-banking/

(Please note that this document has been prepared taking inputs from various openly
available sources and is not an original work in Toto. It is only to give the desired user a
perspective of the Bank’s expectation)