Anvar Alikhan tells the story of how HDFC Bank grew from being launched just twenty years ago with the liberalisation of India’s banking, to being more valuable than JPMorgan Chase - with the help of its tech evangelist CEO.
Among the world's 100 most valuable global brands, there is only one Indian brand (according to the BrandZ 2017 listing) – and that is HDFC Bank. With its brand valuation of $17 billion, it is more valuable than famous bank brands like JPMorgan Chase and Bank of America. In fact, it is more valuable than even household names like Pepsi, KFC, Ford and Honda – not bad for a brand that was launched just over twenty years ago.
So how did the brand get to where it is? HDFC Bank was set up in the 1990s, as part of the liberalisation of the Indian banking sector, promoted by the Housing Development Finance Corporation, the country's premier housing finance company. The competitive framework was India's public-sector banks, with their huge reach and resources, and the multinational banks, with their superior products and service. HDFC Bank deftly positioned itself as a combination of the two. It quickly scaled up to address the Indian middle-class consumer, with the theme line 'We understand your world'. This was accompanied by its navy-and-red brand signage, which soon became a ubiquitous part of the Indian landscape.
But a major turning point in the bank's evolution came when its managing director, Aditya Puri, visited Silicon Valley and returned as a passionate tech evangelist, convinced that the future of banking lies in its ability to stay one step ahead in technology. He reinvented the bank as a digital hub. In fact, if Domino's has repositioned itself as a technology company that makes pizzas, HDFC Bank has repositioned itself as a technology company that deals with your money matters. It was in the right place at the right time to accomplish this, given the capabilities of the Indian technology industry, and its own competitive nimbleness compared with the global banks.
HDFC Bank has developed its strategies based on deep insights into the consumer, and its ability to consistently anticipate consumer needs. As Puri puts it, "The real value is to deliver a differentiated product which changes the life of the customer, which we have tried to do by making it more convenient." Its convenience-through-technology positioning is summed up in its theme line, 'Bank aapki mutthi mein', or roughly, 'Your bank, in your hands' – apt for consumers who access the bank through their mobile phone. However, HDFC Bank has always been much more low-key than its aggressive rival, ICICI Bank, and has spent little on mass media, preferring high-ROI channels like digital media, direct marketing and in-branch communications. It has also worked on a unique branding exercise: concerned that it was losing its emotional connect with its customers due to digitalisation (over 60% of its transactions now happen through mobile, internet banking and ATMs), it has developed a musical brand theme, which seeks to emotionally engage consumers by communicating HDFC's brand essence. This musical brand theme, based on two traditional Indian musical ragas, signifying trust and creativity, now plays across the spectrum of consumer touchpoints.
Over the years, HDFC Bank has won several industry awards, both national and international. But perhaps the greatest accolade came from JPMorgan Chase's CEO, Jamie Dimon, who told Aditya Puri at a conference, "Aditya, you may be ahead or on a par with us." HDFC Bank's brand value is now 20% higher than JPMorgan Chase's.
One of the key drivers of the HDFC Bank brand is Aditya Puri himself, who was recently named by Barron's as one of the world's '30 best CEOs', alongside names like Amazon's Jeff Bezos and Facebook's Mark Zuckerberg. A former Citibanker, Puri took a huge salary cut to take up the challenge of setting up a world-class bank in India, and as Barron's notes, "He has transformed HDFC Bank from a start-up into one of the world's highest-quality banks, delivering eye-popping returns." Puri is a relentless digital evangelist, who has often shared the dais with technology icons like John Chambers of Cisco and Steve Ballmer of Microsoft, although he himself, curiously, is famous for not using email, or even carrying a cell phone. As he explains it, he is a chef, not a cook.
So where does HDFC Bank go from here? The next frontier for the brand – which it is working on – is an ambitious push into India's rural areas, perhaps carefully synergised with a drive into the commodities space.