Banking on Experience

A sales and marketing professional in the banking sector, with three decades of experience, Hemal Vakil, Independent Director, Rediff.com and Consultant, Aditya Birla Capital, has gained knowledge and skills in the banking industry through practical, on-the-job experience rather than formal banking domain or training. His understanding of banking comes from hands-on work in the field and he is adept at identifying and resolving issues that arise in a banking context. Talking to Corporate Citizen, he takes us through his career journey, realities of banking, customer service, financial transactions, risk management and various other aspects

" Business is simple, people make it complicated— it is all about relationships, sales and distribution"

— Hemal Vakil

"One good person can make a huge difference. More the number of good people in your team, you become stronger and stronger—its bottom up and never top down. If your performers down below are playing to the hilt, nothing can stop you at the top"

Corporate Citizen: Take us through your education and career journey.

Hemal Vakil: I did my Bachelor’s degree from The Maharaja Sayajirao University of Baroda. Finished my MBA-Marketing programme in the year 1992, from University of Pune, and post that I started my career as a Response Executive (Space Selling) at Bennett Coleman & Co. Ltd. (BCCL), and got posted in Baroda, my hometown.

At that point in time, information was not as easily accessible and I was a bit fascinated by sales and marketing, which is why I chose it. Opportunity at BCCL came my way and as it was in my hometown, I accepted it. When I joined, space selling was completely new for me. From per column rate to per centimeter rate, to the various publications of BCCL, each one of them were different in terms of their target segment. Our job was to go back to various agencies and talk about the products, and ensure that the campaigns come to us as well. The first four years here was a complete breeze.

After four years, from media industry I switched to finance at Kotak Mahindra Finance, which also came to me as an accident. At the interview, I had frankly said that I didn’t know anything about finance. I was convinced by the interviewer that finance is an interesting place to be in and I will learn while working in the field. I took their offer and joined them in the distribution space of loans. We were loaning to various products including four wheelers, commercial vehicles, earthmovers and so on. It was a new branch of Kotak Mahindra Finance and I started there as an assistant manager, in Jamnagar, Gujarat.

After a year, a separate company called Kotak Mahindra Prime was formed as a joint venture with Ford Credit, where I moved as head - sales operations, in Ahmedabad. In 2001, Kotak Mahindra got in principle approval for a banking license. There were people from different companies under Kotak Mahindra umbrella, and all these companies had to give people to the banking project, to start it. I opted for it—I didn’t understand banking but as it was a project in Mumbai, I thought let me do it. We were a five-member team, who were trying to build a bank— starting from product to processes to risk, and to everything. And, we had all type of consultants from McKinsey & Company, PwC, Deloitte—everyone working for setting up the bank. We used to learn in the process— call up multiple call centers, visit multiple banks to check out their products, and what is happening where. We created a draft list of which bank is offering what. That is how we got into the banking loop. Once the project was over, the first branch was launched.

In the meantime, I had started handling SME business, and was back in Ahmedabad.One fine morning my boss said, why don’t I become a branch manager. Next I took the role of a branch manager of Kotak Mahindra Bank, and with experience I moved on to become an area manager, to regional business manager, to zonal head.

CC: So, you became a banker out of experience.

There is an advantage of not being a banker, because you don’t come with preconceived notions. I became a banker out of experience. Banker comes with a lot of responsibilities and is surrounded by a large regulatory framework, wherein this can be done or this can’t be done. We always would have a question as to why a certain thing cannot be done, and is there another way to do it. That is how lot of innovations in banking happened—home banking and lot of other products came in. We typically went to customers and asked them what is it that they want. Customers' feedback were like — I don’t want to have all accounts to be individually managed; I don’t want to keep balances in all account; if the money is lying in one account and not in the other, why am I getting charged? That’s how the new concept of grouping the accounts came, and we created multiple products. For example, we had ‘My Family’ product, wherein all the family members under one group maintained a floating balance—if one had enough balance, it is fine with the rest. It was a first of its kind product launched, wherein the entire family can bank with ease. So, there were lot of innovations that came in on the way.

CC: What skills you look in for when you recruit people?

I typically look at the attitude of the person. Ability can be taught—if the person has the right attitude, the ability is a no-brainer. If the person has the attitude and says that he is there and he wants to win it, is the person we pick. I have never picked from the top quartile; I have always picked from the second top quartile— that’s been our strategy. Someone who is really needy, is the second option. Every industry works on people—one good person can make a huge difference. More the number of good people in your team, you become stronger and stronger—its bottom up and never top down. If your performers down below are playing to the hilt, nothing can stop you at the top.

CC: How did you get over with the challenge of getting into a new domain, from media to banking?

The very critical item that I tell fresher’s is, if you love what you are doing, no one can stop you. Today, people are talking about work related stress—if you love doing something how can you have stress. I have hardly had any stress on the work side—I loved working on various projects at my stint at Kotak Mahindra. If you are passionate and love your work, you would succeed.

Business is simple, people make it complicated—it is all about relationships, sales and distribution. At the top management level, you don’t need to know the technology. You have people who understand technology, you have people who understand risks—it is all about managing them and getting the right insights from them. That person in the risk management domain, only understands risks. A risk manager has no pressure of business and the business manager has nothing to do with risks. You just get them on the same platform and say, this is the impact that you create, it’s a win-win for all. If you say no to every single proposal, it is a zero risk and then you are not in business. You are in a business of lending or banking, and if you don’t take the right risk, then why are you in for.

CC: How is AI, ML, data analytics and blockchain, changing the banking sector?

Earlier, any change would happen over a decade or so, now the changes are so frequent and fast that every year you see some change. Technology is going to be a support system, but at the front end if you are in sales and marketing or if you are in any domain other than technology, then we need to take help of AI and Gen AI to be a support system for you to know the customer better. Analytics is a way to know your customer better. What we used to do was an in-person meeting to understand the customer. We used to have a physical profile sheet of a customer. Today, AI gives you ready profiling in seconds—we have to embrace this technology and ensure you make the best out of it. Information is available for free, but how do we ensure that this information gets converted in sizable and marketable knowledge which can be implemented for the benefit of yourself, is the key.

You just need the right attitude and start loving your work, and you will see a huge difference—this simple philosophy will work. Be dedicated, be committed and give time to organisation you work for. And, at the same time, keep reskilling yourself to be relevant.

CC: Is technology bringing change in the operational efficiency of banking and customer engagement?

It is bringing change—today you can become hyper-personal with customers. But, my view even today is, India is a country were even today personal relationships and in person meetings continue to remain the key element. You can become tech savvy to the core. For example, when you check-in a hotel, you get a welcome message, but the lobby manager coming to greet you is a very different feeling.

We still continue and we still are that economy who prefer a human touch. And, I still firmly believe that if the human touch is lost, your competitiveness could be lost.

CC: Due to online banking, customers hardly visit their bank, in a sense they are bank’s faceless customers—in such a scenario how do they engage with customers?

Banks are struggling—banks tried and pushed customers to digital to save costs. When a customer used to visit the bank in-person, s(he) used to be cross-sold a home loan, auto loan, mutual fund etc. Today, because the customer is not coming to the bank, the cross-sell is not happening efficiently. Customer is not walking into a bank branch, and when a Relationship Manager (RM) calls the customer, customers give excuses and hang up. Today, RMs would prefer that their customers come and visit the bank branch.

CC: Data privacy issues encompass a range of concerns related to the collection, storage, use, and protection of personal information. How are organisations addressing data privacy issues?

Any company which is public, any company which is in regulatory space, the data is governed by the data privacy policy. But, given the scale at which these organisations function, there could be some breaches. Finance institutions ensure complete data privacy, the smaller players are more vulnerable to data breaches. With the digital personal data protection act (DPDP) coming into play this would streamline a lot of data privacy and storage issues.

CC: How traditional banks can compete in the age of fintech, which is disrupting the traditional banking model?

Competition is always good, specifically from both the sides—from the customer's side because he has the choice of both, and from the organisation side because efficiency is determinant. Take airlines for example, if airline doesn’t have competition, you won’t get the best of prices or services. But, if there is competition, they will work on effectiveness, efficiency and all of that. Competition has to be there and I am a firm believer that the more competitive industry you are in, the sharper you become. Fintechs collaboration with banks and NBFCs have ensured last mile financial inclusion with speed and efficiency.

CC: It seems like the large private banks are outperforming their publicly-owned peers, as far as service quality expectations are concerned.

The gap is narrowing now in terms of technology—large Public Sector Banks (PSBs), are providing as much service as the private banks. Some of the PSBs are reaching out to customers at their home. They need to survive in the competition—they already have the trust factor with them, wherein the private banks are at the second level. With the trust factor behind them, and if they are technologically right and their service levels are right, they are able to hold their market shares. I see a significant change in some of the PSBs and they have already caught up with the private banks. It is just that the new generation is looking at the fancy stuff than core banking, and that is why they opt for private banks from a look-and-feel perspective.

"Information is available for free, but how do we ensure that this information gets converted in sizable and marketable knowledge which can be implemented for the benefit of yourself, is the key"

CC: As a banker and being in sales and marketing for so many years, how do you understand and engage with the Gen Z customers, who are digital natives, socially conscious, and value authenticity and personalisation above all else?

For example, Kotak 811, it is called so because the concept came on 8 November, 2016, when demonetisation in India was announced. At that time, lot of customers wanted to open accounts and we were doing it physically, which meant that a lot of bandwidth was occupied in processing these applications— that’s when the idea came in at the bank, to have something which is completely digital. This is one account (811) which is completely digital, except for the physical cash deposit or withdrawal, everything is online. You can buy and sell mutual funds or term deposits or recurring deposits, in fact 200+ items are there on the mobile banking app; you just don’t need to visit a bank branch. That is what the next generation fancy about, most of the things are done in two clicks. The current generation does not want to physically go to the bank, but they do all the transactions either through mobile or net banking. Keeping these customers in mind, banks need to have speed and efficiency. If someone offers two steps to complete online transaction, compared to others offering four steps, the next gen is going to opt for the two-step service provider.

CC: As an experienced banker, what advice would you like to give to those who are aspiring to start a career in banking industry?

You just need the right attitude and start loving your work, and you will see a huge difference—this simple philosophy will work. Be dedicated, be committed and give time to organisation you work for. And, at the same time, keep reskilling yourself to be relevant.

Today, banks are also business units. When the new recruits come in they have to understand that this is a commercial organisation and not a trust, it is for profit and obviously there will be targets, customer service, operations etc.

The problem is, this generation has not heard a ‘No’ from their parents or from their teachers. And, they walk into their careers, do a couple of calls and confront a ‘No’ and decide ‘I cannot do this’. Today’s generation already has a parent who has provided a secured shelter, a car, a mobike and other leisures. Treating the Gen X would become an art now—managers can’t function and lead the teams the way they did 2-3 decades back. So, organisations will need to adopt and evolve themselves to retain the next generation talent and also understand that this is the generation that is building the AI, digital tools and bringing transformation at workplace.