Kotak’s IT churn: 10 key execs quit in 16 months
In the past one-and-a-half years, 10 key officials in Kotak Mahindra Bank’s (KMB) information technology (IT) and digital departments have put in their papers.
These exits happened at a time when the Reserve Bank of India (RBI) was scrutinising the bank for various lapses in its digital services, including service outages. Last week, the central bank barred KMB from taking on new customers via its online and mobile banking channels, and from issuing new credit cards. For two consecutive years, the bank was assessed to be deficient in its IT Risk and Information Security Governance, contrary to requirements under the regulatory guidelines, said RBI’s notification.
During this crucial period, the key officials who quit included the president and chief digital officer, president-digital IT, CTO-Kotak Cherry, senior EVP IT, head of RTB. Most of the people who quit had spent over a decade with the bank and were well versed with its digital and technology infrastructure.
Responding to a query from FE, a KMB spokesperson said, In line with our strategic vision of becoming a leading tech-driven bank, we’ve undergone a significant talent transformation over the past two years. Recognising the critical role of top-tier expertise in driving innovation and excellence, we’ve deliberately shifted our focus towards recruiting seasoned professionals.
According to sources, KMB has adopted a vision to run the bank more like a technology company in line with global trend – in the past couple of years. To spearhead the bank’s technological transformation, it roped in Bhavnish Lathia as chief of customer experience and Milind Nagnur as president & chief technology officer (CTO) in August 2022.
The bank also adopted a 30-month-long ‘Crawl, Walk, Run’ strategy. Under the strategy, the first six months were for identifying and fixing the problems, the next 12 months were earmarked for stabilising the performance and the next 12 months were for implementing new technology to fuel growth.
While it is not unusual for people to join and leave a company but departure of over 10 key officials from a particular vertical in a span of 16 months definitely creates a vacuum, said a bank official.
The exit of the officials during the same period impacted the knowledge transfer from old to new hands, say bank insiders. “The knowledge transfer could not happen properly because the exodus of seniors within a short period of time, said a source. Some of the officials who quit played a crucial role in building the technology platform of the bank. “Most of the bank’s current technology was built by that team. It started from zero to where the bank is today, said a former official of the bank.
One of the major problems that the bank faced was frequent outages – something the banking regulator had expressed its concerns about. However, insiders say that outages in the digital services were not new, but were being fixed quickly so that customers weren’t impacted.
The recent outages lasted for longer period causing inconvenience to customers. One of the outages, which happened recently, lasted for about three to four hours. Longer outages are not good as those invite regulator’s attention, said an official.
Kotak Bank’s online portfolio is significant. Around 95% of Kotak Mahindra Bank’s new personal loan volumes are disbursed digitally, around 99% of new credit cards are sold digitally, and 79% of new business loans are disbursed digitally. It is also the country’s fifth-largest credit card issuer.
The KMB spokesperson added that the recent hires, (over 500 tech talents from world-class technology companies) are spread across key tech hubs, including Bengaluru, Hyderabad, Delhi and Mumbai. Spanning mobile apps, backend microservices, distributed databases, data analytics, AI and ML, their extensive experience and skills empower us to tackle complex challenges and deliver cutting-edge solutions to our customers. This deliberate move underscores our commitment to innovation and positions us to excel in providing superior customer experiences, added the spokesperson.
