We Believe In Business Sponsorhip Of Projects, Smart-Sourcing Applications

In an interview with Biztech2.0, Arvind Kathpalia, Group Head of Operations, Technology and Finance, Kotak Mahindra Bank talks about the fairly young bank’s IT strategies, its ambitious projects, while also highlighting the need of the hour of the banking industry from an IT perspective.

Could describe the IT infrastructure at Kotak Mahindra Bank?

Our infrastructure is across three datacentres, with 200 servers and we also support a million customers now. We also have around 200 ATMs and 150 branches, in addition to fifty applications running in the bank.

Which projects are currently in the pipeline at Kotak Mahindra Bank?

Some of the important projects that we have in the pipeline include the credit cards project, cash management system since we are replacing our existing cash management system, upgradation of the treasury system, implementation of a new CRM system and also a full business process management system.

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What are the various IT solutions deployed at Kotak Mahindra Bank?

Our philosophy is to buy rather than to build in-house. For instance. for CRM we’ve bought Seibel from Oracle Systems and for cash management we have the Potter System and we have customised it partly to our needs. Our philosophy has always been that we buy when something is available rather than build, because we believe in faster time to market. This suits us because for us, agility in the marketplace is key and the guiding philosophy for us is to implement as many projects. A project shouldn’t take more than six months to implement and if it takes more than that, we seriously re-evaluate it.

What are the major challenges that you are most often faced with?

A major challenge that arises is the lack of domain knowledge or expertise which is available. A lot of vendors sell a product, whereas they should be selling a solution that meets your needs, so it requires a lot of effort to help them realise that they need to do a diagnostic study of the environment and see how their product fits into our environment so that it’s a solution for us as a customer.

Could you please highlight some of the security issues and measures at your end?

In my opinion security is a challenge that banks worldwide realise and have taken up the cause in full earnest. We at Kotak, spend a lot of effort in security. We were the first Indian Bank to go in for a managed security assurance programme. This programme ensured twenty-four hours security-monitoring right across all our hardware, network and so on. We also make sure that any new application that we buy or before it goes into our production system, is fully security tested, complies with the security requirements.

What is Kotak Mahindra Bank’s competitive edge with IT?

We’d like to believe that we are setting industry and global benchmarks. We strongly believe in the business sponsorship of projects. We follow a very close alignment with the business. We make sure that we smart source a lot of applications that are to be developed. So, while the architecture is kept in-house, we open the supply chain management to various vendors for rapid deployment of these so that the time to market these is not large enough, so that the original specs and things like that don’t change by the time we hit the market.

What are Kotak Mahindra bank’s BI plans?

Business intelligence is essential for a bank. There is lot of data available with banks but very little actionable information that results out of it. I believe that if banks spend good time in scoring, modeling and cutting and dicing the data through analytics, then they can really reap the rewards as they move onwards. It’s easier to sell a service to an existing customer than to acquire a new customer. It also gives you a lot of trends in the buying behaviour of your customer and an idea to improve customer services in relation to those. We are at the moment evaluating options for a BI system.

What is your multi-channel strategy?

We service customers through all channels. We have the CTI-IVR channel, we have the branch, internet banking, we just launched the mobile banking channel and all our channels are integrated because they come through our middleware.

How do you manage data at your end?

We have a very strict storage policy, as well as an e-mail archival system. E-mails need to be archived for a longer period of time, also we make sure that our data is actually retained. All our data is mirrored online to our offsite DR site in Bangalore and we run daily reports to ensure that the data is relevant, usable and current.

What are the immediate IT requirements of the banking industry?

The banking industry is at various levels of evolution. The public sector banks are completing their core banking and a lot of them now need to move beyond core banking to a lot more applications. I believe that banking starts with core banking. People will invest a lot in customer enhancement and customer-interfacing technologies.

Could you talk about some of the current and emerging IT trends in this sector?

On the applications side, I believe that there is a tendency to buy rather than to build in-house. Banking software is available now across the world so why do you need to reinvent the wheel when it’s already available? It ensures faster time to market and if some software has worked for multiple banks across the world then it should definitely work for you. On the infrastructure side, banks will continue investing in it and I see a growing need for managed services.