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Shashi Arora

Senior Vice-President, Marketing | 18 Jul 2005

“Kotak is one of the few entities in the banking sector that has a complete range of financial products ranging from retail banking products to insurance to online share trading services to offer to all its customers. This makes our proposition superior and different to all other players in the market. We are focused on what the customer needs rather than what we have to sell.”

Shashi Arora, Senior Vice-President, Marketing at Kotak Mahindra Bank is a textile engineer and has a post graduation in business management from XLRI, Jamshedpur, where he was awarded the MAXI Gold Medal for achieving top honours in marketing. At Kotak Mahindra, Arora is responsible for devising marketing strategy, formulating innovative products, and developing a comprehensive communication plan for the bank.

Prior to joining Kotak Mahindra, Arora was with HLL for over a decade, where he made a remarkable contribution to HLL by turning around its detergent sales in the East after three years of prolonged stagnancy. In an interview with Preeti Jadhav, Arora speaks about Kotak Mahindra’s success and goals. Excerpts:

Q. With the Indian banking sector becoming so crowded, how is Kotak Mahindra Bank faring?

Kotak is one of the few entities in the banking sector that has a complete range of financial products ranging from retail banking products to insurance to online share trading services to offer to all its customers. This makes our proposition superior and different to all other players in the market. We are focused on what the customer needs rather than what we have to sell. Our attempt is to offer customers not only traditional savings instruments, viz. bank accounts, fixed deposits, etc, but also investment products like mutual funds, equity, etc, so that they can generate higher real rate of return on their money.

Q. When a host of banks are offering 'zero' balance facility and similar benefits and features, how are you differentiating yourself?

We have designed our banking products and services keeping customer conveniences and lifestyle requirements in mind. For example, we offer our customers our customers free cash withdrawal facility at all VISA ATM. With 13,000 VISA ATMs in the country, that’s practically every ATM that you can find on the road. So a customer doesn’t need to spend time and effort in locating the right ATM. In today’s time, when parking space is a big issue, he/she can choose the most suitable ATM to withdraw money using Kotak’s Global Debit Card. We also offer ‘Free Home Banking Service’ to our customers. Using this service a customer can ask for cash to be delivered at his home/office, without any charges, simply by calling us up! Furthermore, we don’t levy any hidden charges, which come as a surprise to our customers. We want our customers to be clear on what product they are buying into, what they are paying for it and what they are getting in return.

Q. How would you assess the competition in the industry today?

While there are a lot of banks today serving the mass affluent target segment, we are leveraging on the exclusivity of our proposition to offer our customers a differentiated and a higher order benefit. We are of the view that customers would be able to assess the difference for themselves in the long run. In rural India, however, there are areas that are underserved. We are exploring the possibilities of opening up our branches in these locations to be able to extend our benefits there as well.

Q. Are you happy with what communication done for your brand?

Brand communication is a long-term exercise that has to be carried out with a great degree of regularity and consistency. With the efforts that we have put behind the brand in the last two to three years, we have derived good mileage. Brand research shows that Kotak now has an unaided TOM recall with 1/5th of our targeted audience and is now in the consideration set of most investors desirous of making investments in the next three to six months. We intend to stay with our proposition of “Think Investments. Think Kotak” and do more executions on the theme of “Until money grows on trees” in the coming months. Our intention is to make Kotak TOM brand for at least 50% of customers who have an investment mindset.

Q. How important a role does advertising message play in positioning a finance brand?

The role is not very different from what it would be for say an FMCG brand or for a consumer durable brand. The purpose of all advertising is to forge a link between the brand and its key message/proposition, and to ensure that the brand features in the customers’ purchase intention when he decides to buy into that category. The only additional job that financial brands’ advertising has to do it to make the brand more trustworthy and reliable. This is because financial decisions carry a higher degree of risk and are usually made for a longer term than purchase decisions in most other categories. Apart from brand advertising that aims to establish the main proposition of the brand, the last mile distance has to be covered by (specific) product advertising which has to be more action-oriented, newsy, and direct in its approach.

Q. Please share more on Kotak Mahindra Bank's plans to focus on lending to corporates and small and medium enterprises (SME)?

Kotak Mahindra Bank is focusing on the corporate and SME sector with a relationship-based and industry specific solutions approach as contrasted against a product specific, transaction based approach. We are positioning ourselves in the customer’s mind as one entity - ‘Kotak’ - which can provide customised and one-stop solution for all their financial services needs. Traditionally also, Kotak has been more alive to the needs and demands of the SME sector, and we believe that our relationship and service oriented approach would fetch us good mileage in this category.

Q. Are you looking for a tie-up with any foreign institution?

No, we are not looking at any tie-up at this point in time.

Q. Is this a small banks game at all and do small banks like Kotak Mahindra really stand a chance?

With over 40 full-fledged branches across 25 locations, and with our objective of establishing 100 branches by March 2007, we are not really a small bank. In fact, once fully rolled out, our branch network would be bigger than most well-known foreign banks in India! However, we indeed are pursuing a ‘value’ based approach rather than a volume focused one. The intention is to provide our customers a customised experience rather than subject them to a one-size-fits-all treatment. It is our view that a differentiated proposition backed by a differential service would serve the customers better than a mass approach aimed at the lowest common denominator.

Q. What's your view on the Indian financial market, including banking and investments?

The Indian financial market is rapidly evolving. The serious attempt at market reforms by subsequent governments have and will continue to foster growth of the financial markets. There are far more investment options available to the customer today than he had even a few years ago. The Kotak Group is rolling out real estate funds shortly and is even contemplating entry into other segments to offer a wider investment choice to all investors. Even within the banking sector, all banks, including state-owned PSU banks, are making visible efforts to be more customer centric and offer convenience of anywhere banking, ATMs, etc.

Q. Are you essentially following the universal banking model?

We offer the entire gamut of financial services ranging from deposit products to loans and investment products like MF, insurance, etc, to our customers. To that extent we believe that our model is closer to the universal banking model.

Q. What do you think is the way forward for Indian banks?

We think quality of service and convenience to the customers is going to be the key differentiator of the future. Technology has to be used to offer these twin benefits to the customers while letting them operate through the channel that they are most comfortable with. We have recently introduced the benefit of mobile banking to our customers. Using this, account holders can get to know their account balance, last three transactions, etc, on SMS itself. This frees the time and location constraint that a customer faced in the not-so-distant past. Going forward, he would be able to use his mobile to book Term Deposits, and maybe even transfer money from his account!

Q. How much capital does Kotak Mahindra Bank have for growth?

Our Capital Adequacy Ratio currently stands at 12.8 per cent, which is way above the regulatory norm of 10 per cent. Therefore, we have sufficient capital for growth.

Q. Where do you see Kotak Mahindra Bank say after five years?

In the next five to 10 years, we see ourselves as being a world class and a world scale financial institution.

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