IT back-up fix could take up to 3 months: HDFC Bank – ET BFSI


HDFC Bank has informed analysts that improving the architectural efficiency of its IT systems would take three months while it would take six weeks to automate switchover to disaster recovery system. This was in response to the RBI ordering a halt on the launch of IT initiatives and on issue of new credit cards until the bank fixes it’s IT systems. The bank’s CFO said in an investor call with Jefferies that the three system outages suffered by HDFC Bank since November 2018 were disparate events which affected mobile banking, netbanking and power-outage/ back-up at data centre, respectively. “The resolution will take some time that will include few weeks for strengthening disaster recovery system followed by review by the RBI, the bank’s internal committee and independent-expert and any ensuing action, which in our view can take a few months,” Jefferies said in a note following the meeting.


While the RBI ban on new card issuances would put an halt to acquisitions of a couple of lakhs of card customers every month, it would not hurt the bank’s bottom line immediately as it takes over a year for a new card customer to become profitable to the bank. The ban would also delay new digital initiatives.

However, the bank is expected to go full steam ahead on merchant acquisition, which it is free to continue. “SmartHub 3.0 is a platform solution provided to merchants/retailers to help them collect payments, manage supply chains and track and update their inventories,” the note from Jefferies said.

HDFC Bank also provides value-added services including analytics. HDFC Bank will be using the pause to run an analytics on its credit card portfolio to devise strategies for the business when the ban is lifted.


Source link


Please enter your comment!
Please enter your name here