Sandeep Chordia, COO, Kotak Securities is driving a slew of upgrades and new technologies:
Ravi Lalwani: Name 3 emerging verticals on which Kotak Securities is strongly focused?
Sandeep Chordia: Kotak Securities is strategically focusing on 3 key emerging verticals. First, in automated trading, we are leveraging advanced algorithms and data analytics to provide faster, more efficient, and technology-driven trading solutions, enabling clients to capitalize on market opportunities with precision and speed.
Second, we are strengthening Margin Trading Facility (MTF), offering investors the ability to trade with greater leverage, thereby enabling them to take larger positions with limited upfront capital. This move aims to attract more active traders and improve market participation.
Lastly, the company is heavily investing in Customer Service Automation using AI & ML technologies for quicker query resolution, personalized interactions, and round-the-clock support, ensuring higher customer satisfaction and engagement.
What are the key products/services availed by clients in these emerging verticals?
In automated trading, clients primarily access services through Kotak’s Trade API, which seamlessly integrates with third-party fintech platforms. The recent SEBI consultation paper on algorithmic trading is expected to provide much-needed regulatory clarity, fostering wider adoption and establishing industry standards. For MTF, although the concept is not new, increasing interest from discount brokers has expanded the market considerably.
We have responded by offering one of the lowest MTF interest rates in the industry under its Trade Free Pro plan, a key factor in boosting client adoption and driving growth in this segment. We are harnessing platforms such as WhatsApp, chatbots, and IVR systems to manage client queries efficiently.
What is the expected business growth in these verticals over the next 2 years?
In automated trading, current adoption remains limited due to regulatory ambiguities. However, with clearer guidelines expected from SEBI, the company foresees at least a 2X increase in client adoption. The MTF segment is expected to grow in tandem with market sentiment. In a bullish market phase, Kotak Securities projects that its customer base in this vertical could double. On a broader scale, the industry’s overall funding volumes in MTF are projected to grow by approximately 50% over the next 1-2 years. As for Customer Service Automation, although automation levels are currently low, with rapid advancements in AI and natural language processing, we expect this to be the fastest-growing and most transformative vertical in the broking landscape.
Describe 2–3 innovations/customizations introduced in these verticals?
In automated trading space, we have launched an in-house product, Strategy Bot, which enables clients to build and deploy their own trading strategies with ease. Additionally, we are working towards formalizing partnerships with exchange-empanelled algo platforms to further broaden automated trading ecosystem. For MTF, we have prioritized user convenience with features such as instant activation and 5-minute pledge processing. The platform also supports auto pledge for collateral, aligning with industry best practices and significantly improving the overall customer journey. For customer service automation, we identified high-volume contact points and are systematically rolling out automated workflows to address them. A notable example is during tax season, where clients can instantly retrieve their tax documents via WhatsApp, completely eliminating the need for human intervention and streamlining the support process.
What customized software solutions have been developed for these verticals?
For automated trading, we introduced Strategy Bot, a robust tool that allows clients to seamlessly build and deploy their own trading strategies. For MTF, features like Instant Activation and 5-minute Pledge Processing have been implemented to streamline access and improve user convenience. For Customer Service Automation, we rolled out automated workflows such as WhatsApp-based document delivery and intelligent chatbot integrations, significantly reducing the need for manual intervention and enabling faster, more efficient customer support.
Briefly describe the risks and compliance challenges in serving these verticals?
Automated trading has traditionally operated in a regulatory grey zone, prompting Kotak Securities to take a cautious and measured approach – even if it meant sacrificing some market share. To address increasing transaction volumes and evolving risk scenarios, the company has made strategic investments in automation of risk management processes, the deployment of a next-generation back-office system designed to support scale and ensure regulatory compliance, and a strategic shift in its risk management philosophy-from post-facto execution to pre-emptive analysis.
