Kotak Mahindra launches app to open accounts

For the first time a domestic lender has come up with such facility where a customer can open a bank account using its application

Private lender Kotak Mahindra Bank (KMB) has launched an application ‘Kotak Now’ that would allow new customers to open an account in a more simpler and cost-effective manner.

This is for the first time that a domestic lender has come up with such facility where a customer can open a bank account using its application.

“This is an end-to-end application wherein a customer will be able to open a bank account within 10 minutes, without worrying about visiting a branch or any other merchant,” Deepak Sharma, Chief Digital Officer, Kotak Mahindra Bank told reporters.

He further said that after downloading the application, the customer will have to enter their mobile number and then key -in a one-time password (OTP) to establish identity.

The customer will then have to get connect through a video chat with one of the KMB executives and the account gets opened, he added. The bank tied-up with a German start-up ‘WebID’ which has a patented technology to establish identities through specially built algorithms and has already implemented it in 30 banks worldwide, Sharma informed.

Implementing the process will help the bank save at least 50 per cent on “up to Rs 3,000” spent on a new account opening, he said, adding the expenses like deploying staff, couriering the papers and sending the welcome kit are saved, he said.

At present, the process has been implemented only for current accounts and will be soon expanded to other offerings, he said, adding the lender is targeting to open at least a fourth of the new accounts through this application in a year.

Sharma said WebID's technology has been approved by the German financial regulators and the application complies with the existing know-your-customer requirement of having a "face to face" interaction with the customer.

It can be noted that banks have been using the 'tab banking' method of sending a representative with a tablet to open accounts using the Aadhaar ecosystem.

Some banks like Singaporean lender DBS have tried to use mobile phone in a limited way where the customer has to visit a merchant location to complete the process.

Note: Kotak Mahindra and associates are significant shareholders in Business Standard Private Limited