Snags in net banking, mobile app services put HDFC Bank in a spot

HDFC Bank Ltd’s credibility as a technology-led bank has taken a beating with its net banking and mobile banking app continuing to face disruptions over the weekend and customers finding it difficult to access their accounts. The bank’s lack of communication has added to the uncertainty and frustration customers have been facing for a week.

The bank assured customers that it had rectified the technical glitch in its online banking facility. “We would like to state that the technical glitch has been rectified. Our NetBanking and MobileBanking App platforms have now stabilized. Once again, we would like to sincerely apologize for all the inconvenience caused,” HDFC Bank said on December 5.

However, many customers said that they continued to face problems with the bank’s digital banking services on Saturday, which were restored on Sunday.

India’s largest private lender has still to identify the reasons behind the disruption in the services provided by the mobile banking app and net banking. The bank has also failed to not only notify the stock exchanges but also communicate with its 45-million retail customers, barring a few Twitter messages assuring customers that it is working on fixing the outage.

On Thursday, Reserve Bank of India (RBI)) deputy governor M.K. Jain said that the regulator has taken into account the outage and has deployed a team of experts to investigate into the matter. The RBI team will investigate the reasons behind the outage and accordingly give directions to HDFC Bank, Jain said.

The outage has affected scores of HDFC Bank’s customers who complained that they were unable to pay their loan EMIs or settle credit card bills on time. The salaried class was among the worst affected by the glitch as several employers could not transfer salaries into the accounts of their employees, while those who received salaries could not make online transactions. The bank has not yet revealed whether the problem has been caused by a software bug or a systems glitch, or whether it is a case of cyber-security breach.

The outage comes at a time when HDFC Bank is in the process of transitioning from a pure play banking experience to a financial experience. HDFC 2.0, as it is fond of calling the endeavour, is focused on providing customers with a financial marketplace where everything can be done online or through various applications. The execution of digital transformation has resulted in the cost of revenue coming down by 10% over the past two to three years and, HDFC Bank managing director Aditya Puri said, in an interview to YourStory on 17 July, that he expected to bring this figure down by another 5%.

On 22 November, the bank had sent an SMS communication to some customers who were using the old app to download the new version. Last December, the bank faced a similar problem when it replaced its older version of the mobile app with a new one. Customers were unable to use the updated app for more than five days, following which the bank had to revert to the previous version.

HDFC Bank, which bagged the 2019 Best Digital Banking Award from Asiamoney, boasts of 45 million customers with almost 90% of transactions at the bank being digital. The bank does not have anyone heading its digital banking division as the position has been lying vacant since Nitin Chugh, who was driving the digital vision, stepped down early this year and was subsequently appointed as managing director and chief executive at Ujjivan Small Finance Bank.