In response to Covid-19, banks have enabled alternative working models and served customers in new ways. Even after the coronavirus passes, digital solutions for banks will have enduring relevance. Traditional banks that choose to learn and take lessons from digital financial institutions will find themselves more prepared to compete with challenger banks both during the coronavirus pandemic and long after it’s over.According to Deepak Sharma, Chief Digital Officer, Kotak Mahindra Bank, during the first wave, for banks, a lot of impetus initially was on everyone’s safety, enabling WFH infrastructure, providing remote connectivity, ensuring that people could do their work wherever they are.
“But as companies started to go through this phase, it occurred that finally we have to find avenues to grow, to mitigate our risk and look at a future which we all agree will be very different from what we were in the pre-pandemic world,” he said.
That also meant that organisations had to prioritise two clear strategies where both are equal priorities.
First is what he calls ‘Horizon One’ which typically is about transforming the core. “Banking organisations need to transform their core for both growth and sustainability, which is largely around reimagining and looking at the critical areas of businesses which are around process, operation, risk, customer experience, customer service, business sales & productivity and all such initiatives which could enable,”
Sharma shares an example of Video KYC. In a normal time, Video KYC would have found a mention or interest but now it’s like a life saving initiative for businesses. “Because when you can’t meet customers face to face, the only way you can onboard a new customer is through a remote video based channel. So, we saw rapid adoption.”
Second in the two-pronged strategy is ‘Horizon Two’, which is about building and reimagining the future from now. That means more business models that are purely end-to-end digital (be it around investment, trade cash management, retail lending or forex remittance) are getting through a new digital transformation.
“Not just backend but platform, frontend interface, redesigning around customers to ensure that banks are better prepared to handle that future and shift in customer behaviour and also the business model,” he maintained.
Talking about how banks segregate the good and the bad costs in order to optimise their operating expenses, Sharma said, “ Tech investments are going to increase as more need is felt and the businesses are going to be more tech centric and digital at the core. Having half paper and half digital is not good enough. Certain technology costs are forced by the environment in which we operate but a lot of technology costs are around strategic bets that organisations make.”
