CXO Speak : Vikram Sud, Group COO, Kotak Mahindra Bank

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.