Indian Banks are Digitizing to Tap This One Customer Segment That is Huge 'Millennials is not just a cool term; they are the future of banking', says Kotak Mahindra's Chief Digital Officer

There was a time when people used to plan their days according to the bank visits they had planned, keeping in mind the one-hour lunch break its employees were allotted and also second-guessing their visit at the sight of long queues.

Cut to 2017, visiting banks has lost its previous importance as it is no longer needed. All the work can be done online — courtesy the Chief Digital Officers. They are creating opportunities to ensure that customers have a seamless experience.

Entrepreneur India got in touch with Deepak Sharma, Chief Digital Officer, Kotak Mahindra Bank to understand how the digital wave is sweeping India and fintech's future here.

Starting Early Is The Key

While everyone is rushing towards digitization now, Sharma explains how at Kotak they started giving their customers digital solutions pretty early on. "When we had launched Jifi — a first-of-its-kind platform that enables easy and anytime free transactions — we were one of the few players in the market to offer it. We were also one of the firsts to offer hashtag banking, allowing customers to transact through social media," said Sharma.

And starting early proved beneficial for them, as they managed to ramp up their digital acquisition from 2-3% in 2015 to more than 8 per cent.

Focus On Millennials

Most of their digital initiatives are targeted towards millennial customers and Sharma reasoned, "Millennial is not just a cool term anymore, this is where are customers are. If you look at India's demography, two-third of our population is below 35 years of age. They are ready to experiment and are comfortable using newer channels. Their banking requirements are different," he added.

Digital Is A Journey

Kotak, throughout its digital transformation process, has launched numerous initiatives – KayPay, Jifi, among others.

On how they keep evolving to ensure their digital initiatives are one notch higher than the previous ones, he said, "Digital is a journey. Some initiatives are pathbreaking while others are incremental. It's not necessary that every initiative will be a success. We continue to try and experiment. We are looking at the digital as a medium to validate new customers."

Aadhaar have made things easier, he said. "According to the new KYC guidelines, you can use Aadhaar OTP to open an account. It's a universal option and is more seamless so we lapped up the opportunity and our product 811 now offers immediate account opening with Aadhaar," he added.

Possibilities are endless on the digital transformation front. While there was a time when opening an account would take days, today it's done in minutes.

"We can now roll out accounts in real time. Using AI, robotic process automation, feeding data is a much easier task,and it also enables people to deal with more intelligent jobs. There are various areas where AI can be used— at the back-end, in robotic processes, in the front-end as a chatbot, as a robo advisory and also as a real time fraud management system. Even blockchain transaction are tested on trade finance and KYC," said Sharma.

Kotak Mahindra has also joined a select consortium of banks that are working on building a collective ecosystem and continue to drive transformation.

Sharma talked about three main ideas for innovation. "Innovate to transform existence, to build new business model and to be future ready. The aim should be to do things differently and increase efficiency," he stressed.

Customer is King/Queen

Most initiatives by banks are aimed at making things convenient for consumers. "The point is to provide superior customer experience. We had offered a facility where customers can switch on and off their debit cards, to avoid fraud. We have to build a trust and stay relevant in course of our customer's journey. Today, the market is not homogenous, so one has to cater to each segment and start playing a larger role. We had once a mobile store that enabled one to book flight tickets, movie tickets etc., and people asked us why are we doing it, but this is where customers are."

Future of Fintech

A question that is on everyone's mind is the possibility of fintech taking over a banker's job but Sharma broadly classified fintech into three different categories to explain the various levels of partnership possible with them.

• Fintech start-ups that are vying for the same customer segments as banks and pose as competition to banks.
• Fintech start-ups that are creating solutions for the banks and hence, open up the possibility of partnerships.
• Fintech start-ups that have solutions ready but don't have access to customers and thus, partner with banks to collaborate and reach out to consumers.

While investors globally are now talking about a bubble created by fintech, Sharma begged to differ. He said, "Fintech that creates value is here to stay. Not all fintechs are getting funded or are actually providing a solution, but those who are, have a great future."