PUTS CUSTOMERS FIRST

CASE STUDY HDFC : India’s ATMs are buzzing! In August 2010, the number of ATM transactions in TRANSFORMING India crossed the 100 million (10 crore) CUSTOMER threshold for the first time. It’s the latest EXPERIENCE AT sign of the advances made in India’s banking system, and its emergence as THE ATM a sophisticated, world-class banking industry. Transactions were recorded by the National Payments Corporation of India’s National Financial Switch, to which 61,702 ATMs are currently linked — of those, just under 4,400 belong to the HDFC Bank. HIGHLIGHTS FORTUNATELY, THE BASE24® THE CHALLENGE SWITCHING APPLICATION HAS On an average day, HDFC Bank’s ATMs are used for more than 300 transactions, and ATMs provide A VERY POWERFUL DEVICE the most common and frequent point of interaction CONTROL TERMINAL MODULE between the bank and its customers. This often results in customers lining up to use the ATM, and AND THAT ALLOWED US TO HDFC Bank wanted to speed up the time spent CONFIGURE AND ADD THE conducting transactions, as well as personalize the ATM experience for account holders and give the THREE NEW STATES WE NEEDED bank the chance to communicate directly with an TO THE EXISTING DOWNLOAD individual. CONFIGURATION FILE. THE SOLUTION

To solve these challenges, HDFC Bank launched the Customer Power initiative, which allows customers to save a favorite transaction, and easily and quickly conduct the same transaction in the future if they want to. This greatly reduced the time spent at the ATM. It also enabled the bank to devise targeted messaging on specific products and services, and create significant up-selling and cross-selling opportunities. The solution includes NCR APTRA Advance NDC software running on the ATMs as an integral component. All ATM transactions are routed through ACI’s electronic payments solution, with no impact on transaction times.

THE RESULTS

Within six months of launch, more than 4.6 million card numbers had been registered for the “MyFavorite” service, and transaction times are now 40 percent faster. At the same time, more than 4 million customers have been targeted for cross-sell messaging through HDFC Bank’s ATMs, which has generated more than US$ 1.25 million from the sales conversions booked to date.

Mumbai-based HDFC Bank is one of India’s premier financial institutions, and a leading light in the country’s modernized, technologically-enabled banking industry. It is the fourth largest bank in the country, and the second largest . Its extensive ATM network complements a 1,725 strong branch network and together they create a presence for HDFC Bank in 780 cities across India — and serve more than 19 million customers.

2 CUSTOMER-CENTRIC BANKING BRINGING POWER TO THE IN THE 21ST CENTURY PEOPLE WITH TECHNOLOGY

More than 45 percent of HDFC Bank’s customers The solution that HDFC Bank devised was Customer initiate their transactions through an ATM, resulting in Power, a new initiative which allows customers to more than 300 transactions per ATM on an average save their preferences as a favorite transaction. day. Three quarters of the bank’s customers visit the Customers can therefore indicate to the bank which ATM three times each month to withdraw cash or to of India’s many languages they prefer transactions to check statements, and thus the ATM network is the be conducted in, their regular transaction amounts most common and frequent interaction that the bank and their receipt options, and these can be saved to has with its account holders. speed up transactions.

However, although most ATMs are housed in air- Patel says, “Ninety-seven percent of our ATM conditioned booths, those waiting to use them often transactions are cash withdrawals, and speeding that have to line up outside. HDFC Bank’s management process up not only reduces the time that customers believed that there was a benefit to be gained in spend in front of the ATM, but also reduces the wait transforming ATM usage. By speeding up standard time that other customers experience. That’s great processes to keep line length to a minimum and news for customer service levels.” adding a degree of personalization, the bank could ensure that its commitment to customer service He continues, “Customer Power also allows us to continued to be met. But more than that, the ATM analyze customer data and interaction patterns represents an opportunity to speak to the customer and then devise targeted messaging on specific in a non-intrusive fashion, and offer them specifically products and services across all channels. It gives targeted information about related services and us an opportunity to inform customers about new products, details about special offers — or even products and services that are relevant to them, and simple festive greetings. thus creates significant up-selling and cross-selling opportunities for us.” Sanjeev Patel is the head of direct banking channels at HDFC Bank, which makes him responsible for all In order to turn Customer Power into a reality, HDFC non-branch banking channels. Currently 85 percent Bank had to manage multiple vendors and operating of all transactions happen through these channels: systems and ensure that they all communicated ATMs, phone banking and internet banking. But like in the same fashion. That involved customizing his counterparts in all over the world, Patel and the NCR APTRA Advance NDC software solution his team are encouraging more and more customers that powered its ATMs, and adding multi-vendor to use the 24/7, always available — but lower cost software to bring Diebold ATMs into the project. — channels. One of the challenges he faced was providing customers with information about direct HDFC Bank also worked closely with ACI Worldwide channels in an efficient and effective way. to ensure that BASE24®, ACI’s payment switching and routing technology that acquires all of HDFC He explains the challenges that HDFC Bank wanted Bank’s ATM transactions, would still handle the new to address. “All over the world, banking has become functionality incorporated into the ATMs. very customer-centric,” he points out. “ are now being offered on multiple channels. Munish Mittal, head of HDFC Bank’s technology ATMs, the internet, phone banking and even mobiles solutions group, discusses the technology have become the primary touch points for a bank’s challenges. “All ATM transactions are routed through customers; and those customers have become BASE24 from ACI. With Customer Power, what we highly mobile and expect a truly anytime, anywhere needed was to offer a favorite transaction from the banking experience.” NCR system, but route it through BASE24 without impacting transaction time. Fortunately, the BASE24 “We have always believed in using technology to switching application has a very powerful device enhance customer experience. Consequently, we control terminal module and that allowed us to were looking for an innovative idea that would both configure and add the three new states we needed minimize the transaction times at ATMs and at the to the existing download configuration file.” same time, give us the opportunity to communicate, educate and connect with our customers. When “Customer Power is all about giving flexibility and people visit the ATM, their attention is already on freedom to our users, so they can register a favorite banking. They have come to visit the bank, so it is far transaction after performing a withdrawal and they less invasive and far more effective to talk to them can also modify their favorite transactions when they about banking services in that environment.” need to. To keep that flexibility, the device handler on BASE24 had to be suitably modified to allow the withdrawal transaction to be registered at the completion stage.”

3 Mittal adds, “We have a strong and mature “Customer Power has allowed us to stand out relationship with ACI, and one of its key strengths as a technologically advanced bank over the is the presence of local support teams in India. competition. We see immense potential in this Working with them and ACI’s partners, we were able integration and there is plenty more innovation to make changes in BASE24. BASE24 is an incredibly to come in the future.” reliable and robust solution, it offers us non-stop availability, and it proved to be more than capable of managing the task in hand, allowing us to seamlessly create the necessary modifications.”

SPEED AND PERSONALIZATION: THE TWIN PILLARS OF SUCCESS

HDFC Bank is the first bank in Asia to offer faster ATM transactions and targeted messaging across all its direct banking channels. Within six months of the launch of Customer Power, more than 4.6 million unique card numbers had been registered for the “MyFavorite” service, and HDFC Bank has received very positive feedback from its account holders.

“Our customers expect convenience, 24/7 access, speed, and relevant and timely offers,” says Mittal. “They also want an easy way of responding to those offers and applying for products if they are interested. We looked at those expectations as an opportunity to improve our offering and extend our business. The Customer Power initiative has achieved REVOLUTIONIZES that. Transaction times are now 40 percent faster. Where once eight clicks were required to complete PAYMENTS a cash withdrawal, customers who have registered a favorite transaction only need three.” ACI Worldwide, the Universal Payments company, At the same time, more than 4 million customers powers electronic payments and banking for more have been targeted for cross-sell messaging through than 5,000 financial institutions, retailers, billers HDFC Bank’s ATMs, which has generated more than and processors around the world. ACI software US$ 1.25 million from the sales conversions booked processes $13 trillion each day in payments and to date. The bank has been able to convert its direct securities transactions for more than 300 of the banking channels into profit centers rather than cost leading global retailers, and 21 of the world’s 25 centers. largest banks. Universal Payments —  — is ACI’s strategy to deliver the industry’s broadest, most Patel concludes, “This integration of BASE24 and unified end-to-end enterprise payment solutions. NCR APTRA eMarketing with our ATMs has enabled Through our comprehensive suite of software us to reach out to a significant customer base with products and hosted services, we deliver solutions a relevant message. So far we have been able to run for payments processing; card and merchant 800 specifically targeted information campaigns, management; ; mobile, branch and which have helped us to achieve incremental voice banking; fraud detection; trade finance; and revenue of more than Rs. 50 million (5 Crores).” electronic bill presentment and payment. To learn more about ACI, please visit www.aciworldwide. com. You can also find us on Twitter @ACI_Worldwide.

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