By Madanmohan Rao


Large enterprises are catching up in the innovation race by engaging with startups in a number of ways: accelerators, hackathons, demo days, tech challenges, investment, acquisition, and more (see YourStory’s framework of 15 innovation tips here, as well as the Startup Hatchprofiles of incubators and accelerators).

Deepak Sharma heads Kotak Mahindra Bank’s digital initiatives for consumer, SME, and institutional segments across lending, payments, investments, insurance, trade and foreign exchange services. He also leads the Innovation Lab, Design Studio, fintech partnerships and the startup ecosystem participation for the bank.

Some of the bank’s products include Hashtag Banking, Bharat Banking, M-Store, Whatsapp Banking, Kaypay, API & Open Banking, conversational banking Bot ‘Keya’, BYOD Biometric Banking, cross-border remittances on Blockchain and robotic process automation (RPA).

On November 21 this year, the bank launched its Open Banking platform as a step towards a collaborative ecosystem for enterprises, fintechs and app developers. Over 30 partners have already signed up to tap exponential opportunities for rapid innovation in this space.

Objectives include the creation of frictionless and convenient products and services, powered by the bank’s ABCD charter: AI enriched app, Biometric-enabled Branch, Context-enhanced customer experience, and Data-empowered design.

The bank launched the UPI 2.0 Hackathon on August 29 in partnership with NASSCOM and iSPIRT, to help catalyse merchant and enterprise payments in areas ranging from business loans to foreign remittances. The prize money was Rs 3.25 lakh, and winners also got the opportunity to work with the Kotak Innovation Lab. The solutions were judged based on clarity of the concept, uniqueness, use case, business viability and technical feasibility.

Out of 178 entries, the three winners were Hexadots Technologies (digital billing), Fingage (professional invoicing), and GalaxyCard (mobile-based credit cards). The six finalists were Daily Plus (payments for local retailers), Netwin (Blockchain-based invoicing), Acyclic Labs (smart contract solutions), Nukkad Shops Technologies (kirana commerce), Samyag Shah (cashless piggy bank for kids; smart alternative to ATM); and KIEONA (retail management software).

On March 7 this year, the bank launched a collaboration programme for startups and fintechs in association with NASSCOM. It evaluates their pitches and supports them with mentorship and pilot launches. Of the 133 fintech applicants, six were selected for further evaluation: Automaxis (micro-automation platform), Dairy Plus (payment digitalisation for dairy distribution businesses), Nukkad Shops Technology (kirana commerce), MyCarIQ (IoT for car tracking), Highway Delight (highway services for smart roads), and FTL Technology (retail loans for banks).

Deepak joins us in a chat on the bank’s innovation engagement strategy with startups, and tips for aspiring entrepreneurs in the fintech space. Edited excerpts below:

YourStory: What are the technologies and working models for which Kotak Mahindra Bank engages with startups?

Deepak Sharma: We have different fintech engagement models and interact with fintechs on a regular basis. We evaluate solutions in terms of their problem-solving capability, business viability, technical feasibility and scalability. Based on this, we engage with the startup on a proof of concept (PoC) and thereafter, depending on the success of the PoC, we go in for a commercial release.

Over the last three to four years, we have completed over 100 PoCs and have collaborated with over 100 fintechs in the areas of AI, automation, lending, payments, API banking and Blockchain.

YS: What is the mission of the Innovation Lab, and what are some activities so far?

DS: Kotak Mahindra Bank’s Innovation Lab in Bengaluru was launched in 2016 with the aim of providing our customers with superior services by being at the forefront of the digital revolution and tapping into the future of technology.

The Kotak Innovation Lab Incubates unique solutions across diverse areas in banking and finance through internal initiatives as well as in collaboration or co-creation with fintechs and startups. The lab focuses on advanced technologies such as AI, Blockchain, and open banking and how they can be leveraged in our context to build a minimum viable product (MVP) around the solutions.

Activities undertaken at the Innovation Lab include:

  1. Incubation: Digital incubation activities cover problem validation, solution validation and building MVP to validate value proposition with customers and adapt the solution to meet the fast-changing consumer demands and needs.

The Innovation Lab ensures business viability of projects before development. We have incubated or are in the process of executing (either internally or in collaboration with partners) solutions in the following areas: AI (chatbots for mobile and web channel; facial recognition for visitor management systems), Blockchain (Ripple for cross-border remittances), and open banking platform (already live with 35+ partners, and an additional 40 under integration). 

  1. Fintech Collaboration: The Innovation Lab is building a partnership ecosystem of fintechs, aggregators, and startups. We have already partnered with 100+ startups in the technology and business space.
  1. Design Studio: The Innovation Lab houses a Design Studio which engages in user research, market research, UI/UX and building prototypes to validate business problems and solutions.

YS: What hackathon activities have been conducted so far? What has been the participation level and outcomes?

DS: In March 2018, we launched our maiden payment co-creation programme for startups and fintechs in association with NASSCOM. The twin objectives of the Kotak Payment Co-creation Programme were to provide an impetus to fintech-bank partnerships and build an ecosystem of collaboration and innovation for startups and fintechs in the digital payments space.

In a two-week timeframe, 133 fintechs submitted applications; 12 shortlisted candidates pitched their offerings, of which six were selected. The winners get to work with Kotak’s Innovation Lab, receive mentorship, and the opportunity for a pilot launch in a live environment.

We also organised the country’s first UPI 2.0 Hackathon in August 2018. The Kotak UPI 2.0 Hackathon was designed to give a platform to startups, fintechs and students to design innovative solutions encompassing merchant and enterprise payments on the newly launched UPI 2.0 platform. The Hackathon received a total of 178 entries, of which we selected three winners and six finalists. We are already engaged with the winners and finalists and are rolling out solutions.

YS: Does Kotak have a venture fund for investing in startups?

DS: We have a fund allocated for investing in startups and keep making regular investments. However, our primary focus with our fintech partnerships is strategic and not necessarily investment-centric. Our model is one based on collaborative partnerships. We are constantly on the lookout for strategic partners to invest in and do make selective investments.

YS: In what other ways does Kotak engage with startups?

DS: We have partnered with the NASSCOM 10,000 Startups initiative to support and co-create solutions that are relevant for India. We also work with Vizag Fintech Valley, Fintech Hub – Maharashtra, iSpirt, VC firms, other accelerators, global banks and partners to help us engage more deeply with startups.

Q: It is generally difficult for large corporates to successfully engage with startups – how are managing this?

DS: Digital at Kotak works as a horizontal layer, and transformation works across functions where digital acts as a catalyst and Centre of Excellence. In addition, we have a dedicated team as part of the Kotak Innovation Lab to access and engage with startups and introduce new technology and customer experience solutions.


Our focus areas combine technology stacks like AI, API banking, Blockchain, and advanced authentication tools including speech, facial, and geo-location solutions. We have an in-house evaluation framework which we use to evaluate and assess startups for commercial deployments.

YS: Is the Blockchain environment improving for banking and fintech players?

DS: Blockchain use cases are dependent on the evolution of the ecosystem. For example, widely-adopted use cases have been in the areas of payments and trade finance. Since its adoption depends on growth of the ecosystem, the adoption is slow.

YS: What do you see as the key emerging opportunities for Indian startups in the area of digital payments and financial services?

DS: Some of the key emerging opportunities are lending at the POS, lending to thin file customers using alternate credit score, security in payments, robo-advisory services, and leveraging payment stacks like UPI 2.0, e-NACH, and AEPS to build enterprise and retail payment solutions.

YS: What do you see as the key challenges facing Indian startups in this space?

DS: There are challenges for startups such as regulatory changes (eg. ruling on Aadhaar), data governance, privacy, security, access to funds and mentorship. This could be addressed by governments and the support ecosystem such as incubation centres set up by various governments and financial institutions. Startups should focus on solving real world business problems and build viable and sustainable business models

YS: What is your vision of where your Innovation Lab will be in the next 5-10 years?

DS: In today’s unpredictable world, five to ten years is a long time. However, innovation is at the heart of what we do and our initiatives in this area will keep evolving. The Innovation Lab will focus on future trends, cutting edge technologies, ecosystem partnerships and its implementation in the BFSI space combining data, customer insights and technology.

YS: What do you see as the long-term impact of AI in banking and finance? How can fears of job loss be addressed?

DS: AI would have an impact in every aspect of banking starting from the front end (chat bots, voice banking, authentication, facial recognition) to the back end (process automation through RPA and OCRs, real time fraud detection, RegTech). These new opportunities will add new workforces. The existing workforce needs to be reskilled for the same.

YS: What are the components for design success in customer experience?

DS: The key to the success or survival of any business is customer experience. The key components for design success are:

1) Build apps and multi-digital channel interfaces like wearable, chat, voice, messaging

2) Connect with the customer in an engaging and fulfilling manner

3) Ideate, build and validate with a customer frequently via an incremental approach.

YS: What is your parting advice or words of inspiration for the aspiring entrepreneurs in our audience?


1) Address real-world problems. Focus on deep insights.

2) Build solutions through customer validations at every stage.

3) Build for the world. Think Scalable.