The banking, financial services and insurance (BFSI) industry has been at the forefront of adopting next-generation technologies to optimise operations and enhance business efficiency. The outbreak of Covid-19 has further made the adoption of digital solutions a necessity for banks, to ensure business continuity and cater to their customers. Deepak Sharma, President and Chief Digital Officer, Kotak Mahindra Bank, talks about the various digital tools being adopted by Kotak Mahindra Bank in current times…
How has ICT transformed the BFSI sector in recent times?
ICT is at the core of digital transformation. Among the many initiatives launched by Kotak Mahindra Bank, including a number of firsts, the launch of 811, a full-service digital banking ecosystem that can be opened in under five minutes anywhere and at any time, was a game changer in the Indian banking industry. The 811 helped Kotak Mahindra Bank double its customer base in just 18 months. While this platform was launched in 2017, just after demonetisation, it continues to attract a large number of customers. Today, most financial products are digital and are delivered across a multitude of channels such as mobile apps, websites, WhatsApp, chatbots and voice bots. Banking-as-a-service is also getting seamlessly integrated across the ecosystem through APIs and open banking, leading to faster innovation, deeper collaboration and development of new solutions.
What has been the impact of Covid-19 on the use of digital technologies in the BFSI space? How is your company dealing with the crisis?
At Kotak, staying ahead of the curve on the digital front has helped us better prepare for the current situation. Apart from the fast adoption of existing technologies, both for customers and employees, we are looking to accelerate the implementation of new digital initiatives. We are using this phase as an opportunity to build a future-ready business model and accelerate transformation. While we support work-from-home (WfH) for our employees and our partner network through VPN, virtual desktop infrastructure, video and collaboration tools, this transition is a journey and has some intermittent challenges. We are gradually getting accustomed to this as the new normal. We are revisiting our digital priorities to ensure that all businesses can run smoothly remotely, supporting our customers during this crisis and bringing in efficiencies and productivity in the current situation.
What are some of the key digital solutions you currently use to improve operational efficiency and enhance customer experience?
- Kotak’s mobile banking app and net banking service are the key channels through which we deliver a range of banking services to customers. With over 180 features, our mobile banking app is to be one of the highest rated iOS and Android apps. These solutions enable our customers to bank from the comfort of their homes during this challenging time.
- Our Keya Chatbot and WhatsApp banking services are seeing faster adoption and becoming mainstream digital channels.
- RPA is being leveraged to automate various processes to bring in operational efficiencies.
- Our industry-first zero-contact video KYC process has provided customers with a complete digital account opening experience.
What are your views regarding the uptake of emerging technologies such as artificial intelligence (AI), internet of things (IoT) and blockchain in the BFSI space? Do you currently use any of these technologies or plan to use them in the future?
We keep assessing the maturity of various technologies and their relevance in the BFSI industry on an ongoing basis. Today, we have started leveraging AI in the fields of chatbots, automation, frauds, personalisation, and image and speech recognition. AI is embedded across most areas of banking, and we expect a much wider adoption in the future. We have seen limited adoption of blockchain for international remittances such as Ripple. However, going forward, we will see more use cases around invoice discounting and trade finance. Augmented reality (AR)/Virtual reality (VR) will also see some adoption in financial services. IoT and 3D printing are yet to find relevant use cases in BFSI.
What are the challenges in deploying digital solutions?
The challenges typically faced while deploying digital solutions pertain to:
- Legacy infrastructure with less flexibility.
- Speed of development to match customer expectations.
- Scaling up of the existing infrastructure to handle the ever-increasing quantum of digital transactions.
- The availability of appropriate talent to build digital solutions.
- Cloud-ready applications, multi-cloud environment at scale and cost efficiency in a secured manner.
What are the key technology trends that will shape the BFSI sector in the next few years?
The key technology trends to watch are:
- Application modernisation – API and microservice, Kubernetes and containers to support cloud readiness.
- Greater adoption of cloud – Hybrid and multi-cloud environments.
- Higher focus on security-, risk- and fraud-related solutions.
- Hyper-automation focused on new business models, operations, and services.
- AI everywhere – Voice interface, extreme personalisation (N=1), credit, collection, frauds.
- Ecosystem play – Banks will create and participate across the ecosystem.
- End-to-end digital banking experience with digital infrastructure including video KYC, digital locker, e-sign and account aggregator.
- Constantly balancing customer experience and innovation with security and risk.