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Kotak Mahindra Bank plans to hire around 400 engineers this year to speed up upgrades to its technology systems after it came under regulatory scrutiny over missteps.
The financial company, backed by Indian billionaire Uday Kotak, has already hired more than 500 engineers from scratch in the past two years, said Milind Nagnur, the bank's chief technology officer. . Nagner said in an interview that he has poached them from companies such as Google and Amazon.com, as well as Paytm and Fontpe.
He said the bank would reach a “critical mass” of talent with this year's hiring, and subsequent recruitment would be gradual. Kotak CEO Ashok Vaswani said in a press conference that India's fourth-largest private lender increased spending on technology by more than 30% to Rs 17 billion (200 million yen) in the year ended March 31. 4 million), accounting for approximately 10% of operating expenses. Over the weekend.
The team aims to overcome a ban imposed by the Reserve Bank of India last month on adding new customers or issuing new credit cards through digital channels. Governance and risk management in Kotak's technology system has been in the spotlight as regulators cited it as one of the reasons behind its action.
“We're going to double down and put much more effort, much more resources, much more money into moving this forward as quickly as possible,” Vaswani said. He said he expects spending to increase as the bank deepens its technology buildout.
Nagner is one of Kotak's most high-profile technology hires, along with head of customer experience Bhavnish Rathia, who both joined the company in 2022. Nagner previously worked at U.S.-based fintech company Early Warning Services LLC, where Latia spent nearly 20 years. Amazon.
“We are concerned about everything you see and hear,” Nagnur said in a comment before the RBI ban. “We need to worry about cyber risk, operational risk, human error of sending money to the wrong person, geographic risk, and credit and debit card fraud.”
Nagnoor, who recently expanded his role to become chief operating officer, said the bank is using artificial intelligence in areas such as fraud risk management and customer chat to improve service and analyze bank sentiment. The bot has been rewritten, which has helped resolve issues quickly.
Approximately 98% of Kotak's savings account trading volume was through digital or non-branch methods, according to its latest investor presentation for the third quarter. The bank sold 95% of its new personal loans by volume and 99% of its new credit cards digitally over the same period. This highlighted the challenge of maintaining this pace of growth due to the RBI ban.
The regulator said it found deficiencies and non-compliance in Kotak's various processes over a two-year period, ranging from a lack of data security and leak prevention strategies to vendor risk management. Although it has partnered with the bank, the company said the results were “far from satisfactory.”
“What’s really changing is on the backend, where we’re working deeply on resiliency, uptime, and cybersecurity,” Nagnur said. “The volume of digital transactions is increasing exponentially, and the backend must be well-prepared to handle this kind of volume.”
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