Kotak Mahindra Bank improves digital offerings to grow retail and corporate banking reach

Mumbai-based Kotak Mahindra Bank (KMB) is one of the largest banks in India. In 2022, the lender recorded $1.4 billion net profit and over 32.7 million customers.  

In 2017, the bank launched Kotak 811, a fully digital savings account that gave customers access to a variety of retail banking products online. By 2022, Kotak811 had recorded 12.3 million customers, and over 50% growth in overall credit cards, personal loans, trading accounts and recurring deposits sold.  

The bank’s corporate digital banking portal Kotak fyn (For Your Needs) was officially launched in early 2022 to improve services to its corporate customers.  

We recently had a chat with Shekhar Bhandari, president of global transaction banking at KMB. He emphasised how corporates and small and medium enterprises (SMEs) have started demanding a more retail-like customer experience and discussed how the bank is delivering innovation from acquisition and transaction processing to investment. 
 
Bhandari said: “We were cognizant of the fact that the experience of a corporate entity should be similar to that of an individual, and also of the urgency from SMEs and other larger institutions that would normally demand those solutions.” 
  
Bhandari observed that 2022 was a completely altered business environment following interest rate hikes where liquidity, cost of deposits and funding became dearer. This called the bank to arms to provide digital solutions from acquisition, through to the processing and investment planning stages to improve the efficiency of digitalisation efforts.   
  
KMB is gaining market share year-on-year growth of 60% in profitability, paving the way for the bank to cut a significantly larger slice of the pie.  
  
Overall, during the third quarter of 2022, the bank saw growth of 100% in the microfinance business, 60% to 70% in housing and around 50% to 60% in its credit card business.  

As its global transaction banking drives consumer, commercial and wholesale segments of the bank, it has meant a more than a 100% spike in digital volumes for its cash management business.  
  
Bhandari said that acquisition happens at Kotak811, a zero-balance digital savings account. More than 30,000 accounts across the bank are being opened here in under three minutes for individual accounts and within two to three hours for SMEs. Bhandari describes this as one ‘engine’ of the bank. 
  
The second engine is Kotak fyn. Business banking customers can manage trade, account services and collections seamlessly on Kotak FYN. Launched in April 2022, 80% of its existing active business customer base, are now live on Kotak fyn.  
  
Bhandari said: “We have seen a 50% increase in the number of transactions since fyn was launched.” Kotak fyn is accessible 24/7 and operates independently of its main banking platform and system. Its features are powered by an intuitive, self-designed intelligent analytical dashboard that helps customers to manage their cash flows.