RBI has been advocating the use of digital payments due to the Coronavirus crisis. Do you see a rise in the adoption of digital payments as a result of this, specifically at the bottom of the pyramid?
Comparing pre-COVID-19 (Feb-2020) and post-COVID-19 (April-2020) volumes, we have seen a significant surge of ~50% growth in digital payment methods like Bill Payments, DTH Recharge and Mobile Recharge, which are strong indicators of a transition in channel preference from physical to digital. In line with Kotak’s digital-first strategy, we have been focused on constantly improving the user experience. We expect these shifts in preferences will be sustainable over the long-term.
Cyber fraud has been a matter of concern for many to migrate to digital platforms. A lot of measures have been taken by regulators, banks, and service providers to ensure safe transactions, however, such notorious actives still exist. What is your suggestion to the ecosystem on protecting data and regaining the trust of the users to make India a pioneer in digital payments?
The ecosystem needs to institutionalize an agile threat-assessment process, which results in fine-tuning authentication engine rules & algorithms to safeguard customers from ever-evolving frauds. Constant reassessment of customer transaction limits for each transaction type on Digital channels and dynamic assessment of high-risk merchant categories like wallets will also help contain the extent of frauds. Robust Fraud Risk Management (FRM) and risk-based multi-authentication modules shall further help balance security and convenience.
Kotak Mahindra Bank recently launched video KYC, a first of its kind. Apart from making the process 
simpler, video KYC also minimizes the chances of identity theft, which is a challenge with physical copies. How do you see video KYC benefiting your overall business?
We are continuing to see tremendous success with 811, which is India’s first full-service digital banking ecosystem that offers a simple and convenient way to open a savings account and then digitally transact through the Kotak mobile banking app. Now, with the industry-first Video-based KYC platform, we are offering customers a start-to-end completely digital, paperless, and zero-contact journey to open a full-KYC 811 savings account. In addition to the convenience and ease for customers, the Video KYC platform can support multiple products in a secure, scalable, and efficient manner and we will be extending this facility to other products in a phased manner.
Any final words for our readers?
As we look at the next frontier of payments, we all need to look at a scalable, secure, and integrated payment system. There are significant opportunities to innovate in the areas of small businesses, trade, forex, institutional, and government payments.
About the author
Deepak Sharma is the President & CDO, Kotak Mahindra Bank. Deepak heads digital initiatives & business at Kotak Mahindra Bank where he is responsible for digital strategy, transformation, payments, digital channels, innovation, technology, platforms & ecosystem initiative. He also looks at Innovation lab, future tech & Fintech ecosystem partnership in areas of AI, ML, IoT, Blockchain, RPA, Open API & design across lending, payments, investments, Institutional, SME & consumer segment.
