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HDFC Bank Ltd, India’s biggest private sector lender, is looking to replace its legacy credit card system with a modern technology platform to make the processes more efficient and cost-effective, according to a person aware of the matter. The decision to upgrade the system of credit cards is also expected to give customers a better experience and more security, the person said on condition of anonymity.

RBI had stopped the private sector bank from issuing new cards in December without specifying a reason.

“HDFC Bank is considering moving its card platform to a credible fintech company for better end-to-end processing of cards, customer experience, and security. There are many new-age fintechs that have developed a good platform for online banking, credit card issuance and management that are offering banks the option to migrate it to their platforms," said the person aware of the matter. “The bank is in talks with fintech companies such as Zeta and Sprinklr for launching their credit cards once the ban is lifted," the person added.

In its response to a query, an HDFC Bank spokesperson said the point about moving and transferring the portfolio is incorrect.

HDFC Bank started the conversation with fintech companies nearly two years ago. But the need to move the credit card operations to a more efficient digital platform was felt following the surge in digital transactions during the pandemic.

Five-year-old Zeta is helping banks launch modern retail and fintech products. Banks are currently operating on antiquated technologies and don’t have the expertise to offer the best customer experience. Zeta is currently the software service provider for Sodexo’s employee benefits and rewards programme.

According to Murali Nair, president of banking business at Zeta, the company recommends that banks first transfer their credit card platform onto their digital platform before moving their entire product portfolio to the cloud. “We would tell them that you launch a modern credit card experience for the millennial customer in the first instance so it gives them the ability to test our systems for scalability and get comfortable with the way our system works. Then we say, now you start shifting your existing customers on your old stacks into the new data stack, so it’s a two-step approach that we follow with banks," said Nair. “This can be either done through a new app or new APIs (application programming interfaces) embedded in the existing app. But the latter could impact the experience customers used to certain functionalities," he explained.

However, when asked about a tie-up with HDFC Bank, Nair said that while he cannot go into specifics, the company is in talks with several large private sector banks to move them to Zeta’s platform over the next six-eight months.

Since RBI banned HDFC Bank from issuing new credit cards four months ago, the bank has seen its cards portfolio decline by 189,000 cards as of February-end, data from RBI showed. While HDFC Bank continues to be the largest credit card issuer with an outstanding base of 15.2 million cards, ICICI Bank has managed to capture 43% of the incremental cards issued between December and February.

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