Milind Nagnur explains the software-focused engineering side of the Bank that we have not heard about.
Personal touch in the banking space is seen as the holy grail. Functionality alone – however remarkable – will not be enough when it means something as personal (and emotional) as our money.
Milind Nagnur, President & Chief Technology Officer (CTO), of Kotak Mahindra Bank knows this well. To remain relevant, he needs to see off challengers in terms of speed and convenience while simultaneously delivering an exceptional customer experience.
As CTO, he is making some deep-seated changes in the Bank’s technology priorities and talent mix, unlocking a step change in productivity to catapult the Bank into the digital-first arena.
In this conversation with ET Insights, Milind speaks about innovation, how he is trying to turn tech talent in favour of the Bank, and experimenting with OpenAI’s chatbot, ChatGPT. Edited excerpts:
Q. It has been around seven months since your appointment as Chief Technology Officer (CTO) to spearhead the Bank’s technological transformation. What has been your focus so far?
We hear a lot about customer experience and having a customer-first mindset. Having said this, I believe that in today’s day and age, customer experience equals technology experience, because the majority of our Bank’s transactions are digital in nature.
To provide the right technological experience, one needs to start from the basics. There needs to be a clear focus in terms of performance, resiliency, security, and availability of applications. This requires going deep into the architecture of the systems, and therefore becoming the chief architect of the tech organisation to influence the detailed design of our platforms.
My second focus is to become a talent magnet and attract new talent in technology, in addition to embracing and inspiring the existing talent. Great minds can accomplish greater things. I also need to anticipate what’s coming next, and for this, I have been focusing on innovation and problem-solving that can power the Bank forward.
Q. Tech plays a prominent role in driving successful innovation. How are you ensuring that your innovation efforts achieve their desired value?
Theoretically, there are two types of innovation. One is sustaining innovation or efficiency innovation and the other is disruptive innovation.
I think every organisation should be equally invested in these two forms of innovation.
When we moved from desktops to laptops, it was a way of sustaining innovation. Similarly, when we listened to our customers and kept on improving and providing new features in our apps, it was sustenance or efficiency innovation.
However, when laptops moved to smartphones, it was a disruptive innovation. We saw the creation of a new market that did not exist. Disruptive innovation competes with non-consumption.
Under disruptive innovation, you will find two variants. One is mass market innovation and the second is the new market innovation (laptops moving to smartphones).
In mass market innovation, one can make services available more easily (in our case digitally) to a large broad segment of the market. Kotak 811 digital business is a great example of mass market innovation.
We are active in all these three areas of innovation.
Q. Every activity in today’s banks is powered by digital applications. Discussions around apps, application programming interfaces (APIs), and data have become a regular feature in boardrooms as they have been in tech teams. How are you transforming the technology workforce, and creating a software-focused engineering company mindset within the Bank?
We are a technology company. There is a need for detailed attention to provide software products/applications that have the best quality of service, are always available, and are secure. Nobody can design these today in an old 3-tier architecture using a database, an app server, and a web server.
Speed matters in digital, and here’s where event-driven architecture plays a key role. It can make our digital channels nimbler and connected and create services that customers expect.
This requires a software mindset. Only a software engineering mindset can lead towards designing such a platform. It is an interesting space to be in. You can apply all the principles of software engineering and innovation and at the same time remember and be aware that you also have the responsibility that people trust you with their life savings and dreams.
Q. Finding people with in-demand tech skills hasn’t been easy for banks. You touched upon becoming the talent magnet. With Big Tech companies shedding staff, are you going all-in and attracting this talent for hiring?
Absolutely. I am inviting the best tech talent (software and infrastructure engineers) to join us. We are actively processing resumes from some of the large tech companies. On the tech floor today, you won’t feel that you are working for a bank. We sit together in Scrum Teams working with a mission to design new products and solutions.
Q, Customer touchpoints have increased, and their expectations have undergone a major shift. How do you ensure that you have the best technology, adhere to regulatory demands and at the same time meet/enhance their expectations on an ongoing basis?
To get the outputs that you have alluded to, we need to focus on the inputs. There are eight key inputs that we are actively working on and have metrics in place to measure them.
I have already spoken about architecture and design, talent, and cyber security. Another input is around data and analytics. One needs to be contextually aware of customer needs. The days when we could push products have gone. Today, the customer decides what to buy, when and on which channel.
The draft of the Digital Personal Data Protection Bill is out. The new law will place a lot of emphasis on customer consent and how the data is stored, shared, and used. We are shifting from statistical models to machine learning models that will comply with the law. The other inputs that we focus on are cost, efficiency, and how we run the business.
Q. ChatGPT has taken the world by storm. Will you integrate ChatGPT tech into your apps, websites, products, and services?
If we ever use ChatGPT, it will need to be an ‘enterprise version’ where we are fully accountable and responsible for the training of the module. It will be with guardrails so that the results generated are reliable and explainable.
Some MNC banks are looking at creating an enterprise version of ChatGPT. We are also experimenting and will look at the results.
