HDFC Bank’s Strategy for 2020

using video as a channel

Team Members:
Rajan Burman
Jayesh Patil
Radha Tulsyan
Anubhav Sinha
College Name: IIM Lucknow
Global trends in video and Audio:

- Over the top(OTT) players like YouTube, Netflix and sorts have fueled the use of Internet for
audio and video streaming. Global audio and video traffic is expected to reach 82% of all
internet traffic by 2018. This makes video platform a very attractive investment for companies
to develop it as a channel for their marketing and communication activities.
- A lot of brands and firms have tied up with online video content firms which provide product
placements in their short videos which are uploaded on social media. This provides an excellent
opportunity as the functional utility of the product is aptly shown by the protagonists in the
video with a very relatable story line. Eg. TVF’s tie up with Ola in Permanent Roommates, etc.

-
o Trends show average Indian internet user belongs to the Young age category (15-34 yrs.)
 o Therefore, in the next few years these are the users that will be enrolling in the banking
system. As a result, it becomes imperative for HDFC to tailor their communications on
channels where this crowd is present.
- Content marketing as a trend in the digital world is gaining traction. Disguising the company’s
marketing communication in an informative article or a video about a topic pertinent to the
company’s vision, products and offerings is done. This creates positive reviews and gives a word
of mouth in the minds of the target audience.
- 52% of the marketing professionals throughout the world name video as the type of content.
The reason behind this pertains to the heavy traffic received on these platforms and in turn the
increasing ROI.
- Spanish Bank BBVA in 2010 designed an ATM which sought not only to automate the teller but
humanize the device (redefining the self-service experience). Thus, the ATM is not only the cash
vending machine, it can accept checks, allow you to buy mutual funds or facilitate a video call
with a human expert in bank.
- Although wearable devices are developed for health and fitness, wearable computing
will soon infiltrate other businesses whose customers will push them to adopt. Westpac
in New Zealand has ported an app which sends out account balance to a smartwatch
and is now working on adding some more functionalities.
Why Video Channel?

Financial Jargon

The financial world is beset with literature cumbersome to understand and interpret by a lay man. The
underlying concept behind hardcore financial concepts may be simple to understand through peer
learning, however the bird’s eye comprehension of the same is a tedious exercise. This, coupled with the
fact that any basic consumer behavior relies on search attribute of a product and trust, before moving
over to loyalty, makes customer acquisition and retention a hard task for banking and financial
enterprises. This is even more acute in the case of consumers belonging to the Indian subcontinent, who
are characteristically pessimistic on first usage and behavioral change, as well as have a low acceptance
rate to changing policies and norms, more so which they find hard to understand. At this juncture, it is
always simple to ape the model of primary education in American education system – It is easier to
make virgin minds understand complicated logic through info-graphics rather than plain text, because
the former makes the information comprehensible by driving engagement.

Customer Centricity

Banking is essentially a converging field, with almost all the banks in the competitive environment
providing similar services (retail banking, portfolio management, risk advisory, derivatives/options
trading, etc.). Hence for any single banking institution the points of difference with respect to its
competition are reducing drastically. Consequently, the switching cost for a customer to a competitive
banking firm is decreasing, and acquisition costs aimed at garnering new customers are increasing.
Hence the marketing viewpoint for the banking spectrum is changing defiantly from a product centric
approach to a customer centric. There is an ever-increasing trend to create and curate financial services
tailored to customers, and make them more of a stakeholder in the process of saving and/or making
money rather than just consumers. Video channel, with its effectiveness in information delivery, makes
it easier to gather consumer attention and keep them engaged in the platform they currently are, as
well as enable easy transition of potential customers to one’s own platform

Age of Digitisation

The current working population of the planet is suffused with the access and benefits of the internet and
online media for information sharing, learning and communication. Internet penetration in the Indian
subcontinent is also touching all-time highs year on year. This makes the internet medium as an
effective channel to deploy marketing strategies and drive growth as well as retention. However, the
digital media is having even lower switching costs for the consumer, which in turn means that the
engagement levels need to be significantly higher than that in other channels. Video marketing happens
to be the most effecting in garnering user attention in environments of low switching cost, if positioned
correctly. Hence it is one of the most widely used methods by all companies, banking or non-banking.

Need For Change

Banking and financial services industry is an age old institution in itself. To survive, thrive and grown
across generations of consumers, it needs to enter into more interactive channels within customer
centricity, and thereby change itself with the changing generations. Since videos are made and depict
the current world order and dynamism, they serve as viable sources to drive that change.

Consumer Segmentation & Targeting

Age & Economic Demography

Our current consumer base is spread across the Gen X and the working fraction of the millennials.
However, both these demographic segments are having different behavior patterns. Since HDFC began
operations when the Gen X was having earning capacity, it’s current consumer base in Gen X is a loyal
one. For them, movement from one bank to the other is a psychologically tiring exercises, and for them
the current services that HDFC provides suits their growing needs, if any. The millennials on the other
hand are those who will start to earn, or have started earning in the last decade. They have come up in
an era of spawning financial services. Also their disposable income is considerably higher than that of
their predecessors. They hold multiple bank accounts in different competing banks. Hence the ability for
them to assess their options and go ahead with the best one is more than that of Gen X. There are a lot
of regional factors too that influence their decisions vividly, like location, quantum of finance involved,
and future growth, family and relationships etc.

Since HDFC is heavily inclined on the idea of growth, the millennials are the once to target at this specific
point in time. This is the consumer segment which needs to be heavily marketed to and acquired, and
subsequently be retained to the bolster the meat of the financial services HDFC has to offer. If the
millennials are converted into a loyal consumer base within the next decade, then the trajectory of
customer acquisition will be steeper and less cost intensive for HDFC since millennials are a generation
of influencers. There is huge seeding of digital communications which sway consumer behavior among
the millennials and drive the credence attribute of product selection.

Psychological Factors & Digitisation

The millennials have been brought up in the world of technology and its rapid growth. There is still a
dominant abhorrence to the advent of technology in driving changes to traditional practices among Gen
X. This is inherently rooted in the psychological resistance to change exhibited by the latter. This is why
the penetration of technology has been significantly more in the millennials. To drive growth HDFC
should be looking towards change in communication strategies, exactly where videos come in. Since
millennials are least resistant to dynamism and have the highest penetration of digital media amongst
all rungs of the society, they are the choice consumer segment to market to for the upcoming decade
and cement HDFC’s position in the leadership boards of Indian banking economy.

Should Video Be A Primary Channel?

Having outlined the target group and the benefits of going ahead with a video-based channel, a
complete transition to the video channel will definitely be disruptive in the world of banking and should
be pursued for 3 – 5 years in the least. The competitive sphere of HDFC includes many banking
institutions which employ video as a consumer connect device, but do so in synergy with regular digital
communication strategies. A complete overhaul into video/virtually interactive setup will be a first of its
kind experience for any consumer of financial services. More so, this digital disruption is a good source
of staggering brand visibility, thus driving consumer acquisition costs lower. Such an overhaul is
specifically tailored to the millennials and will be widely accepted in this consumer segment. Moreover,
all organizations today are restructuring themselves to be more youth – centric. And no disruptive
intervention by a company in any industry is possible without the corporate structure of that company
supporting that sea change. Since HDFC has been conceived in the age of millennials itself, its corporate
structure too would resonate with a completely interactive profile HDFC will be set to take upon itself,
and thus internal management too will respond effectively to the overhaul and the growth it brings
thereof.

Challenges to Video – Based Channel

Overdoing as A Bane

With a video channel, the communication is effectively moving beyond written text and entering a
significantly informal paradigm of information dissipation. With this comes a critical aspect of overdoing
and undoing the same. Considering the prospect of a complete overhaul to a video – based channel of
communication, the same needs to be done at just the right level of deployment. Psychologically, a
banking institution associates itself with attributes of trust, credibility and thereby respect, since it
actively delves in day-to-day financial transactions of its consumers. An over deployment of video
communication or not carefully curated content may lead to dilution of the brand image as one being
too casual in its approach to banking, which will have adverse effect on the growth of HDFC. The content
should definitely be tailored to the youth. However, it should not completely mirror the latter in its
effort to deliver information to the layman consumer, because a lot of elements of the millennial society
does not weigh upon the ethics of banking and the financial service community.

Cybersecurity Concerns

The advent of technology and the permeability of the digital interface in all walks of professional
endeavors has also culminated in a negative wave of information high-jacking and illegal consumption of
sensitive data. There have been countless instances of harmless and harmful cyber-interventions with
the aim to steal user profiles for targeting certain consumers into illegal subversions by anonymous
groups all around the globe. When HDFC walks into a completely digital model of consumer
engagement, it first needs to upgrade its cyber-security arena to allow for fall back options in case of a
possible attempt at data breach. In process for the same, it always best to run a pilot venture through
the regulatory and security divisions of HDFC before attempting the total overhaul. All possible points of
DDoS entry should be mapped and plugged before engaging the consumers into the interactive
interface. Also a phased deployment involving several tiers of interactive line-ups with the consumer
should be taken up, to assess security dilemmas in real time and simultaneously safeguarding the bulk of
the interactive interface from a comprehensive breach.

Multi-linguality and region-specificity

India is a land of diverse accommodations, races, cultures, economies, religions and languages. Any
interactive engagement in video format needs to be a function of all of the aforementioned premises.
For e.g. a video communication deployed in ATMs of Rajasthan (say) will never work effectively in the
Tamil community. This is because when a marketing exercise is designed keeping customer centricity as
the pivot, the campaign aims to tap into the consumer behavior of that particular target group. In India,
consumer behavior of people from different religions and economies is directly affected by their
background and immediate societal and technological environments. The Indian consumer, hence,
cannot be tapped into by a generic marketing campaign. Every video exercise has to cater to behavioral
sentiments of that particular community. This essentially makes the gamut of the entire process more
complex and critical, but highly rewarding. Also it aids in targeted penetration in different parts of the
country, which ensures brand presence in varied segments, thus enabling failure – proof market strategy

Road Ahead

Time Horizon Solutions

0 – 6 months Separate Video Inclusion In App

In the first round of video overhaul, there may be a separate tab for all the FYI
videos pertaining to the online banking solutions HDFC provides for the
consumer. Also there needs to be separate region-centric curated content in
the videos for deployment across 5 major zones of India, namely – North, East,
West, Central and South. Currently, the videos have been integrated into the
app but not as a sole solution provider but as an aid to one’s other app
features. A separate tab may also garner user’s behavioral orientation to
accepting video instead of textual content as a learning mechanism.

6 months – 2 years Live Assistance In ATMs

Modelling a similar endeavor by Spanish Bank BBVA in 2010, ATMs may be

incorporated with cheque drop and passbook facilities with a personal console
for connecting with a technical assistant via video while inside the ATM, either
through an external wall mounted screens dedicated for the same, or through
projections on the ATM wall.

Integrating with other applications

In order to personalize the video content for each consumer and thus drive
customer centricity, HDFC can tie up with other applications like Instagram and
Facebook for receiving public information of the consumer and suggest videos
 on those platforms as well as its own app accordingly, using collaborative
filtering
2 – 10 years Via Wearable devices
Although wearable devices are developed for health and fitness, wearable
computing will soon infiltrate other businesses whose customers will push
them to adopt. The penetration of FitBits and other smart watches is increasing
in India, and enabling push notifications in the same will rapidly aid in bringing
the consumer close to an all-digital banking world on-the-go

Using Augmented Reality

Currently being incorporated in the furniture industry by market leader IKEA,
augmented reality is the budding technology for the future. Using the same,
HDFC can effectively make a transition from Live Assistance to sharing the
active engaging workspace of the issue in real time. Also it may enable in
effective learning through experiences which are fail – safe with no error
consequences for the consumer, something which will aid Indian consumers to
develop keenness for the platform

Mock-up of the video platform in Mobile Banking app of HDFC:

How video channel can be the best way to go forward in the digital world: