HDFC Credila CTO on the company's tech transformation journey

The education loan sector in India is a complex one and companies working in this space are striving to make the loan process more efficient and cost-effective for aspiring students and professionals. One of the leading Indian companies in this sector is HDFC Credila Financial Services — earlier the education loan arm of HDFC Limited — which has been at the forefront of innovation. After the lender sold a 90% stake in HDFC Credila to a consortium of private equity firm BPEA EQT and ChrysCapital at a valuation of ₹10,350 crore (as a precondition for approving the merger of HDFC with HDFC Bank Ltd), it now operates as a separate entity. In an interaction with TechCircle, Shashank Agrawal, Chief Technology Officer at HDFC Credila Financial Services Limited, explains if these business changes have impacted HDFC Credila’s tech transformation journey, the company’s increased focus on cloud computing, artificial intelligence (AI) and cybersecurity and how the company is planning to stay ahead of its competition? Edited excerpts:

How has the current business modification impacted your technology transformation?

The current business modification has had minimal impact on our overall technology transformation. We have always been operating independently as a separate entity. Of course, some expectations are different now with new owners and stakeholders on board. Our future technology journey will align with these aspirations while our operational methods remain largely unchanged.

What kind of new technologies are you leveraging to speed up operational efficiency or customer experience?

In the past four years, we have used certain platforms leveraged by the HDFC ecosystem to meet our financial needs. The merger of HDFC Bank and HDFC Limited led us to switch to a new financial and treasury system. We transitioned to Oracle Fusion Financial in just six months. Upon my arrival in 2020, we focused on enhancing the existing platform and the lending system which was a custom application built with .NET, ASP.NET, SQL Server (all are used together in web application development), and mainly Microsoft Stack deployed on-premise. Recognising the importance of cloud technology, we developed a 5-year technology roadmap by March 2021. We transitioned to Intellect Design’s new treasury platform and established an in-house Data Lake infrastructure. We also integrated various software-as-a-service (SaaS) platforms and incorporated Oracle Integration Cloud to connect with our main applications.

Our lending platform has significantly improved over the past three years, resulting in a loan portfolio of ₹28,000 crore. A new lending stack has been introduced at our Mumbai branch, with plans to roll it out to all branches by the end of this year.

Are you planning to increase the technology budget? If yes, which would be key focus areas in the coming 12 to 18 months?

The tech budget was not sufficient previously, say five years back, which reflected the promoter’s mentality of underinvestment in technology. Over the years, the organisation primarily grew as a brick-and-mortar entity with many manual processes. When I took on this role, the goal was to drive digital transformation, as it became a fully-owned subsidiary of HDFC Limited in December 2019. Our MD and CEO Arijit Sanyal hired a new leadership team including myself, to drive that agenda, resulting in momentum in the budget over the last four years.

This year, our tech budget includes a provision for almost a 70-80% increase over last year, reflecting the innovation we want to bring in and the organisation's aspirations. A significant portion of that is allocated for Capex investments. Some of the investments will focus on revamping our customer flow journeys. We recently rolled out a transformative Greenfield platform built over the last two years to eventually replace our current legacy platform.

Moreover, one major area of focus will be enhancing our new customer journey by leveraging Gen AI across the entire value chain. This includes improving lead prospects, supporting documents, sales team interactions, internal operations, disbursement, and customer service. We also plan to implement Gen AI-based chatbots for customer service. That said, we are mindful of the need to space out these initiatives to ensure a return on investment and manage change within the organisation.

Do you have a separate budget allocated for cybersecurity, given the increasing number of cyber-attacks in the enterprise?

Yes, we have a separate budget for cybersecurity, which has also become mandatory in the banking, financial services and insurance (BFSI) sector, especially with the Reserve Bank of India’s master direction on IT governance, risk, controls and assurance practices that came into effect this year. These guidelines outline how RBI expects cybersecurity initiatives to be managed, with a dedicated Chief Information Security Officer (CISO) reporting to the Chief Risk Officer, who in turn reports to the Risk Management Committee of the board.

Please tell us about your technology team in terms of the number of people, skill sets, and capabilities. Are you planning to expand it in the next year? Are you hiring new talent or upskilling your existing employees?

Yes, we do plan to hire techies in different roles, and we are also working with our technology partners. Currently, 30% of our work is in-house, but we intend to double our in-house capacity. This does not mean we will reduce our partnerships, as we have a significant amount of work planned for this financial year and beyond. We will evaluate our progress quarterly and adjust as needed, based on evolving priorities. Our stakeholders and new owners are becoming more involved, providing clarity on their goals for the next 3-5 years. It is an evolving process, but we believe it will be a positive one.

On a scale of 1-10, where would you like to place your organisation in terms of its digital transformation journey and how do you plan to get maximum success?

Currently, I would rate our organisation at a 7/10 overall, taking into consideration two key aspects: capability and maturity. In terms of capability, I would rate us at a nine, while in terms of maturity, I would rate us between 6 and 7. There is still a lot of work that needs to be done. Our goal is to become a top edtech platform for students, offering a variety of educational opportunities and financial services, whether that means achieving a rating of ten or even higher. We strive to be ahead of our competitors.

In that case, which key technology areas do you believe need improvement when compared to your competitors?

One critical area that requires improvement is continuously enhancing customer experience, which is a primary focus for us. We have implemented various initiatives to scale our business, support operations, and reduce the time to market for launching new products and solutions. This allows us to maintain a competitive edge and lead from a business perspective. We also aim to increase the agility of our organisation and identify opportunities for cost reduction and improved productivity.