Today, after the opening hours of Kotak Mahindra bank, the largest private sector bank in India, problems connected with its online and mobile services have come to the surface. RBI, the regulatory body in India and the bank enforcer, instructed Kotak Mahindra Bank to cease online account creation for customers and discontinue its credit card issuing process.
As to this, the bank CEO Ashok Vaswani decided to address all employees through a letter and told them about the position. He added that because of the growing customer base of Kotak Bank’s digital services such as Internet banking and mobile apps, fintech needs to have advanced technology systems that stand to be much stronger to support that flux in customers’ needs.
Why did issues arise?
Over the last two years, Kotak Bank has seen tremendous growth in its digital business as customers find online banking very convenient. However, its existing core banking technology which runs behind the scenes was not able to support such high volumes of transactions happening through different channels smoothly.
Problems started occurring like the server becoming slow or crashing during peak times. This affected customer experience and also raised concerns at the RBI about the stability and resilience of Kotak Bank’s IT infrastructure. The regulator did not want technical glitches to compromise customer data or money.
What is the CEO saying?
In his letter, Mr. Vaswani acknowledged that the level of technology required to manage today’s digital business is far greater than what the bank currently has. He assured employees that significant investments are already being made to build a robust and scalable technology platform which can handle high usage levels reliably.
Some upgrades have started showing results with downtime reducing. However, more work still needs to be done to meet RBI’s expectations. The CEO said all issues flagged by the regulator will be addressed urgently. He also said that existing customers will not face any service disruption and their needs will continue getting fulfilled through all channels as before.
What does it mean for customers?
For new customers, Kotak Bank has temporarily stopped online onboarding and credit card sign-ups digitally to focus on technology improvements. However, people can still open new accounts through branch visits. Existing customers will see no change in internet or mobile banking facilities.
Debit card services, net banking, UPI, IMPS and other payment options will function smoothly. Only credit limits or limits for certain products may see a temporary hold for some to ease pressure on the systems during the technology upgradation phase.
This episode shows that as digital usage rises exponentially, traditional infrastructure needs complete overhauling. Kotak Bank’s proactive response to the situation is aimed at delivering a seamless and robust experience to its growing customer base in the future. The bank seems committed to resolving the issues fast.
