Interviewed By Foo Boon Ping
Shekhar Bhandari, head of global transaction banking at Kotak Mahindra Bank (KMB), shares how KMB leverages its digital-first strategy by launching initiatives such as open API and solutions that allow customers to open bank accounts in only three minutes.
Foo Boon Ping (FBP): We’re meeting Shekhar Bhandari, the head of global transaction banking at Kotak Mahindra Bank (KMB). Tell us a little bit of what your bank is working on in terms of some of these areas: real-time, cross-border payments and this move towards real-time payments globally. Global payment innovation (gpi), for example, is getting a forward momentum. What are your thoughts?
Shekhar Bhandari (SB): ‘Digital first’ has been on top of whatever we have devised. Based on the principle of simple and fast, now we have gone forward and built seamless, simple and good solutions for the customer. Our customers are now able to open bank accounts in three minutes. Not one, not two, but millions of them. They are able to transact in a much simpler and faster manner, mobile being the device in which customers want to operate now. In India, being a big country, you’re able to reach everywhere. It becomes a complimentary part.
Kotak Mahindra Bank has been at the forefront to lead each of these initiatives. The government has been there to facilitate through Aadhaar, through having the entire payment mechanisms, instruments of immediate payment service, real-time gross settlement, National Electronic Funds Transfer, Bharat Bill Payment System and open banking as well as permitting all kinds of technologies, such as blockchain and white paper by the Reserve Bank of India.
As a result, you’ll find India as the number one player in payments, and Kotak Mahindra Bank as one of the premiere players in whatever is being done in the payment space. On gpi and the initiatives, the world wants real time. India has been in real time. The Indian customers get the payment in a minute. It’s a minute of processing and a second of receiving. We have been ahead of the curve.
FBP: As the desire for real-time, cross-border payments become stronger, how are you satisfied with their requirements today?
SB: Fintechs, who have come in and taken us through various methods, are making it simpler, have facilitated and met that requirement. We have been using them for quite some time. As long as the method is simple, cheaper and gives the information that is desired, we consider it the best way. At KMB, based on that principle, we've been able to guide the entire processing accordingly.
FBP: In the longer term, there is something that is scalable as well.
SB: If you want to see the overall broad framework for the customer, the customer generally says, “I'm not limited to payments, please be part of my entire value chain”. As a customer, if you want to come to the bank, do you go to another portal, another app and try to book your car? Do you go and try to book a movie somewhere else? Do you want to probably have another option of having all these solutions?
The bank has the solutions that let everything be in one place. The bank provides it or someone else will. I'm very proud to say that at the bank, we provide something like this very well. On the Kotak Mahindra Bank app, today you can book a cab, you can book a flight ticket, you can have food. There are some in the pipeline and there are some which are already live.
For a small and medium-sized enterprise and for corporate, can I have a single view in which trade, cash, liquidity, foreign exchange and loans, all of them are there and interlinked? There is data analytics and machine learning, which help you to do analysis and give you a solution, which has never been done before. It is a good part, which is evolving, and I'm very proud to say that we are trying to work on each of these to bring our customers at the forefront.
FBP: Open banking and application programming interfaces (APIs) have become more mainstream. There’s a greater discussion about data sharing. Tell us how you are leveraging APIs and helping your customers use data more strategically, at the same time protecting the data.
SB: Open API has been part of our strategy maps around 12 to 18 months back. I'm very happy to share that we have an open API architecture, which is set up and working. Our customers have open APIs to which they are able to operate and transact in a secure and seamless manner. The word secured is very important in the entire architecture. And secured means data security, secured ensures that the customer is able to trust and transact the way he or she wishes.
The world still needs to become better in terms of the advanced technologies to protect data. When it comes to the bank, the data is already there with the banks. This is fortunate because they are in the business unit. There are a few others who are not that regulated. One has to be very sure on what happens to data.
If you were to ask me if I have one concern, it’s that we need to be cautious of, I'll say data security outside the normal network will become the most important aspect, which has to be addressed by the regulators and by all the constituents.
FBP: Global trade is slowing because of the trade, geopolitical tension. In India itself, it slowed. The industry has some asset quality issues that tampered lending. What kind of adjustments did you have to make to your business?
SB: India has a great story. Whatever you see now are probably temporary. There are structural things that have been put in place by our Prime Minister and the government. When you see each of the areas of capital, labour, taxation, lending, National Child Labour Projects and the recovery mechanisms, you’ll find that each one of them are good stepping stones for taking India ahead.
What we see today is an effect of probably purifying the entire system. Come 12 months, 18 months and 24 months, I'm very confident of all these things coming in bearing that fruit. In the meantime, we continue to invest in the entire system. India does require investments on the macro side and infrastructure. India has a good amount of consumption to probably take care of each of those parts.
FBP: Is this an opportunity for private sector banking to play a bigger role?
SB: The finance minister gave the biggest signal of what can be done on the economy and what we can all do. I'm very bullish on the way the investments will come to India with the initiatives, which were announced by the finance minister. There will also be a good amount of investments by the existing companies to plow back the entire benefits that has come in, thanks to a better taxation structure in India.
Private and public sector banks are in a very sweet spot, given the India opportunity which is there. When you have a country, which is likely to grow on an average of 8% to 9% over the next 10 to 15 years, you will see growth for everyone. It is the way you take care of the customer. It is the way you address each of the customer needs. The share will come to the respective player accordingly.
We, at Kotak Mahindra Bank, are committed to serve the customer. Whether it is technology, whether it is solution or something to do with anything that is required to be done for the customer, we are happy to build the entire solution accordingly.
FBP: Thank you for speaking to us.
SB: Thank you very much.