The story of India’s growing digital banking ecosystem


Today, the customer-base has grown from Gen X and Gen Y to include Millennials and a new customer-centric market has emerged. This has caused a dramatic shift in business models and the advent of mobility, computing, and telecommunications has opened numerous possibilities. HDFC Bank and Oracle’s digital journey has followed a similar path.

A Digital Bank

A Digital Bank by the people, for the people

HDFC Bank was founded in 1996 with the aim to create “a world class Indian bank” with a strong technology-centric business model. HDFC started operations with core banking platforms from i-flex solutions (now Oracle Financial Services, post-acquisition by Oracle in 2005). A year later, HDFC Bank ventured into the retail banking space by transitioning their retail banking services to the core banking platform from Oracle Financial Services.

In 1998, the Bank, in partnership with Oracle Financial Services, brought their services one step closer to their customer by introducing retail internet banking solutions. Within a year, HDFC Bank followed this up with the launch of their real-time NetBanking service and the country’s first international debit card.

The turn of the new millennium brought with it another pioneering opportunity. HDFC Bank merged with Times Bank in 2000 making it the largest private sector bank in India. HDFC Bank and Oracle Financial Services executed a perfect and seamless infrastructure integration. That same year, HDFC Bank launched its CRM Analytics tools on the Oracle FLEXCUBE Information Centre.

Building a Bank

Building a Bank around the customer

The Bank’s meteoric growth made it necessary to implement a strong core banking system. In 2003, the Bank implemented the Oracle FLEXCUBE core banking system. This led to improved customer engagement and the rapid integration of systems required to manage the ballooning demand. In 2005, the Bank successfully moved most of their Wholesale Internet Banking channels to Oracle FLEXCUBE. This enabled the Bank to enhance their offerings. For example, they were able to extend their analytics capabilities to their credit card services.

HDFC Bank then shifted their corporate banking services to the Oracle FLEXCUBE core in 2006. With an ever-growing customer base and sprawling digital infrastructure, the Bank needed a solution to maintain banking compliance. To better manage the operational load on their Risk and Finance architecture, the Bank implemented Basel II compliance for retail using the Oracle Modern Risk and Finance solution.

Operation Overhaul

The Great Operational Overhaul

The Bank’s rapidly growing customer base raised significant capacity challenges. By 2009, they were nearly overwhelmed by the demand and constantly increasing business volumes. This led the Bank to orchestrate a complete shift of their core banking system to a platform that could support a dynamic and scalable operational model. This shift resulted in:

  • Advancements in core banking and launching ATMs that were 40% faster
  • HDFC Bank becoming the first bank in Asia to offer customized transactions on ATMs
  • The ability of customers to save their “favourite transactions” on HDFC Bank ATMs

Even amidst the chaos of such a large-scale operational infrastructure overhaul, the Bank was able to successfully execute the acquisition of the Centurion Bank of Punjab (CBOP) and the subsequent infrastructural migration.

Cloud SOA

Transitioning to the Cloud, Service-Oriented Architecture, and more

In 2011, HDFC Bank successfully deployed a flexible private cloud ecosystem. This enabled them to provide a seamless customer experience and gain market leadership in auto loans, personal loans, and credit cards. This was followed up by the implementation of Service-oriented Architecture (SOA), an OpenAPI-powered platform. With SOA, customers could view their available credit balance in real time and it took just 10 seconds to get personal loans and credit cards approved.

The move to the cloud fuelled further innovation at the Bank. In 2012, they launched their loan management application on Exadata to streamline loan processes, improve process efficiency, and introduce flexibility to new and existing loan products.

By 2014, the Bank had implemented the Oracle General Ledger (GL) and Basel on Exadata as well. The Bank also re-engineered their core banking architecture to run on Oracle’s “SuperCluster”, its most powerful engineered system, to provide fast and efficient banking services and solutions.

Built on Trust

A Bank of the future, built on trust

2017 marked the beginning of HDFC Bank’s journey towards an inclusive and simplified operating structure. The Bank introduced a set of personalised services and solutions that would be unique to each customer. A year later, HDFC and Oracle strategized a long-term roadmap to technology adoption and innovation by implementing a Perpetual Unlimited Licensing Agreement (PULA) for Oracle Database. That same year, HDFC Bank embarked on an IFRS (International Financial Reporting Standards) compliance journey with Oracle and ensured transparent data encryption by securing Data@Rest.

Digital 2.0

Going Digital 2.0

In 2019, scalability was the need of the hour. So, the Bank moved the Oracle Banking Platform (OBP) to the cloud through Oracle Cloud@Customer. This created a fully automated scaling and deployment framework that helped the Bank gain greater on-demand scalability.

Today, both HDFC Bank and Oracle are moving forward in tandem with their Digital 2.0 ambitions. By leveraging the power of cloud, the aim is to usher in the future of digital banking. The efforts include the implementation of a private Cloud@Customer and OBP limits and collateral management.

The Digital 2.0 era is aimed at promoting and enabling enterprise-wide scalability, with a focus on enhancing the quality of output. DevOps, cloud systems, and microservices are poised to take the Digital 2.0 journey further.