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CXO Speak : Vikram Sud, Group COO, Kotak Mahindra Bank
We leverage the expertise provided by vendors and IT implementation partners to use the best-of-breed solutions available. At the same time, we've learned to get more from the existing applications, better deals from vendors and in squeezing out more from different business processes through technology.
Monday, July 06, 2009
Q What are the challenges for your bank in the current economic slowdown?
Adhering to the universal mantra of doing more with less is perhaps the
biggest challenge for any organization in these tough economic times. We need to
increase efficiency across all quarters and increase productivity. The IT
infrastructure needs to be optimized and we look forward to exploring ways to
get more out of people and processes. What we're witnessing in markets today is
completely different from what we've seen over the past 15-20 years. There is a
lot of volatility across all domains. The situation calls for a paradigm shift
in the way we work as compared to days when we had more resources at our
disposal. A key focus, therefore, is credit risk management across products. We
continuously look at deploying the latest in technology to manage risks across
various financial products. Moreover, levels of fraud are higher and crooks out
there are constantly trying to exploit vulnerabilities across the new-age
banking channels: Internet, mobile, SMS gateways, etc. We can not afford to drop
guard at any point of time.
QWhere do you think IT can help?
Needless to say, the role of IT has to be closely aligned to business needs.
IT department need not wait for the business to provide a requirement for it to
work on. There are already a lot of new tech available that let you do things
judiciously. A lot of customers are tech-savvy and prefer online banking. SMSes
have become the ubiquitous media for to-and-fro communication with customers.
And with IT costs coming down, there's a lot you can deploy to make banking a
pleasant experience. We are blessed not to have the burden of legacy apps and so
have gone aggressively in pushing netbanking, online share trading, etc. In
coming weeks, we shall revamp our websites to add more features. This is a key
focus area for us as a higher proportion of our customers have been acquired
through Web.
QHow seriously you look at IT as a budget head?
We continue to do more IT projects and are certainly not looking at IT as an
area that can be easily chopped. We have already rolled out CRM across branches
to ensure our customers are constantly in touch with us through whatever means
they deem fit. Also, to build on leads, we shortly plan to have an automation
solution for our sales force. All this is aptly backed by our state-of-the-art
data center at Goregaon in Mumbai.
QWhat measures should banks take to reduce the burden of NPAs?
The panacea lies in pushing for early action rather than waiting for the
situation to spiral out of control. Identify the risky buckets and push those to
fast-track payments. Check for a client's history of delinquency in payment of
dues and also carry out continuous analytics for uncanny behavioral patterns.
Thankfully, Indian banks are much more scrupulous in dishing out loans as
compared to the US and so our exposure is smaller. This puts us in a better
position vis-a-vis the US banks. Having said that, the role of credit
information bureaus such as CIBIL and the need to educate customers on good and
bad credit scores can not be emphasized more. We also need a unique ID for each
customer, on the lines of the social security number in the US. The silver
lining here is that the government is already mulling over having such a system
in place. Another related requirement is to beef up the capacity of the legal
system to tackle online frauds.
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