“It is not about imbibing technology, but in making it relevant in the space that we operate in. This is the digital transformation drive that Karur Vysya Bank (KVB) has embarked upon,” said the bank’s CEO, PR Seshadri. Further asserting that it has become crucial for the 102-year-old institution to participate in the world of tomorrow, he conceded that “KVB is a traditional bank. Tradition is important; at the same time, we also agree that we have to combine modernity with tradition to stay in business. And this is what we are aiming to do — using technology to drive transformation”.
Technology-adoption is not new in the industry. But where do you think you have the edge?
We have around 70 lakh customers banking with us on the retail side. Retail as such is dominated by a few banks, including large nationalised institutions. A majority of their business is around metros and large urban centres. As an institution, we have a strong presence in the semi-urban and rural pockets. Of the total network of 790 branches, 424 are located in semi-urban and rural areas. Our team posted in such centres do make qualitative and quantitative difference. We attract 32.5 lakh customers every year. Given the fact that we have a predominant presence in the semi-urban and rural areas where competition is less, the competition to compete with me is even less.
What about India Post...
It is a payments bank, a trusted agency. There are some limitations on the payments bank framework. But that does not stop them from originating business for other people. We are in discussions with them and hope to sign a deal, going forward. The face of rural India is changing continuously, and growth seems to be much faster in rural pockets than in urban areas. We have a large footprint in rural India, and this should give us the edge.
Will technology reduce cost?
Technology is a productivity enhancer. Over time, paper-related costs will partially go away. The biggest drivers of the cost of a product are: the actual physical cost of the branch and the people; and the credit-related cost in the asset. The technology that we have put in place will reduce the cost to customer by increasing the speed with which it is delivered, making it more convenient, and reducing the paper-work.
What kind of productivity enhancement do you foresee?
Our auto-loan product, for instance, has been digitised completely. We can now give approval in 10 minutes and disburse the loan within the next half-hour. There used to be a lot of paper-work in the past, and the process itself would take a day or two. Now, this has been simplified.
We can also offer SMBs loans of up to ₹2 crore with the same speed. The approval can be given in 30 minutes – and assuming that all other information is correct – we should be able to disburse the funds in two-three days. Earlier, the loan-seeker would give all papers after which a document would be prepared, and this would have to be approved before we communicate the same to the customer.
Our digitisation efforts have made it easier for branches to focus on both small and big loans with the same speed. We are intent on giving an impetus to small-ticket loans across all our branches. Until now, technology products that we built were traditionally available in urban India. We are now developing products to suit the rural customer.
Does that mean that you will reduce your corporate exposure?
We will continue to grow our corporate advances but at a slower pace, compared to retail.
What about brick-and-mortar structure, considering that technology is available today at customers’ doorstep.
Branches will still remain a preferred mode of delivery, for, human interaction is important. Customers, who have hitherto been visiting our branches for transactions, will henceforth come for advice as transactions can be done over the net. We are in the process of upskilling our people so that they become trusted advisors for individuals and businesses