Over the past few years, DBS bank has been accelerating its digital transformation agenda. This includes embarking on a comprehensive and holistic mission of building a start-up culture, re-architecting the bank’s technology infrastructure, and leveraging emerging technologies such as Artificial Intelligence, Big Data and Chatbots to re-imagine banking for its customers. Neal Cross, Managing Director and Chief Innovation Officer, shares insights with Nivedan Prakash on how the bank has reinvented the way it provides banking services through constant innovation.
Some edited excerpts:
DBS is one bank that has created a culture of innovation. How are you catalysing innovation across the organization?
Before I joined, the bank had undergone the process improvement to get the basics right and in turn, create a better customer experience. Then they started looking at design thinking training and did well on the culture movement. When I came on board, my immediate task was to regroup as well as rebuilt the innovation team and as a first initiative, we started engaging staff like startups. The first rule set up was that the innovation group would never ever invent products or services. Secondly, we will not hire technology people or business experts. With this approach, we have turned the entire bank into an innovation group.
As part of the innovation exercise, the bank staff run workshops either on their own, or in collaboration with startups, students, and corporate partners, wherein they figure out the issues and come up with creative ways to solve them. This has worked really well for us, as it not only helps the bank in understanding customer problems but also finding accurate solutions. The objective of all these is to make the whole organization more experimental and scientific in producing solutions for customers. Our goal is to make DBS the world’s most innovative bank.
Last year, 5000 bank staff across functions like HR, finance, corporate banking, and consumer banking among others were enrolled for an innovation program so that they could achieve what they intend to. Besides, we organized hackathons for the staff so that they could innovate new products for the bank. Out intention was to develop and bring in the culture of startups within the bank.
We have recently built Asia’s biggest banking innovation center in Singapore, called DBS Asia X (DAX), which underscores our ongoing commitment to shaping the future of banking and emracing the future of work.
What sort of digitization efforts are being put in to accelerate digital transformation at DBS bank?
One of the tangible outcomes of DBS’ digital transformation journey is the development of DBS digibank, India’s first mobile-only bank, which allows customers to access bank services from their smartphones or tablets without having to visit a physical branch.
On the digital piece and creating new businesses around it, we spend a lot of time in India with the digibank team while tyring to understand the consumer psyche, what they want to achieve, and be there with friction-free, highly contextual offering for them to fulfill their financial need. Moreover, we spend a lot of time in training the digital team. We run hackathons across India so that startups could help us understand how things would look like and work in the country.
DBS digibank has been live since last year and we went from zero to half a million customers in 6 months. This is an incredible growth like an startup. For us, it is not just about the products but how businesses can reinvent themselves. Like, for the talent development program, HR is running a hackathon where startups are inovled. We also run another program wherein we pay $25,000 to our staff and coach and mentor them like startups. With no strings attached, we are first company in the world to take such initiatives. We take no equity, as this is simply for the staff benefit. Hence, we have a developed a typical culture within the organization, which a way more than powerful than any form of innovation.
How are you actively engaging with the Fintech ecosystem?
We have been engaging with fintech startups more than any other bank across the globe. Besides, we use fintech as well. The classic example is our chatbot system deployed in India. Then, we have partnerships with fintech companies for crowd lending, micro lending, social payments, etc. Besides, we have enhanced our engagement with the start-up community with the launch of DBS HotSpot, a pre-accelerator programme for fintech, social enterprises and digital start-ups to encourage entrepreneurialism.
DBS has collaborated with fintechs to create state-of-the-art customer offerings. For example, digibank comprises artificial intelligence technology from US-based Kasisto, an intelligent budget optimiser from Singapore-based Moneythor and a soft token solution by Singapore-based V-Key.
Additionally, we are establishing the FinTech Foundry, a start-up engagement initiative, where fintechs will be encouraged to partner with DBS staff to prototype ideas, as well as develop mobile and web banking solutions via an eight to 12-week programme. The initial focus will be on delivering customer-centric concepts related to insurance, deposits, payments, wealth management and cybersecurity. This programme will leverage DBS’ tech specialists, user experience designers, ethnographic specialists and data scientists.
DBS is one of the first banks to deploy chatbots. How has been the experience so far?
The implementation of chatbots has been very successful. Today, 92% of the customer requests are serviced by chatbots and we have received a lot of positive feedback from happy customers. We use chatbots in multiple ways. For example, they can understand your spending, give past transaction details, balance left in the account, and accordingly guide your future spends. It’s a very high quality chatbot and we took a long time to get it right.
In order to sustain the momentum of being future-ready, what are the specific technological initiatives being taken?
While I can’t be very specific about our initiatives and projects, the technologies that are being closely looked upon are Artificial Intelligence, Blockchain, and Big Data Analytics – all these are progressing at good rate. Again reiterating, it’s not just about the technology, but the culture that is being developed within the organization to harness these technologies in the best possible way. We have around 340 projects running currently and we have to keep delivering each one of them. But having said that, among all the megatrends, we are very excited and bullish about Internet of Things, as it creates transparency to drive efficiency. Our future can be reinvented with the help of IoT.
You mentioned about Blockchain. How do you see its potential and the areas where it can be leveraged?
Except for Nasdaq, which is a financial institution, none of the banks in the world have gone live with the production of Blockchain. Currently, the banks are just experimenting, doing pilot projects, POCs, and talking around Blockchain. There are certain areas where Blockchain can prove effective. This includes trade and finance across borders where multiple parties are involved, ownership of mortgages, and detecting and reducing fraud. While it’s highly unlikely that Blockchain is going to totally reinvent finance, it will definitely make finance cheaper, better, and quicker. We are in the very early stages of Blockchain.
The need of the hour is to leverage the cloud to bring down operational costs, get better data management and APIs out so that we can connect to new ecosystem and partnerships, and then create positions like Chief Ecosystem Officer to mange all these.
In your bid to be future-ready, how is DBS building the workforce with relevant skillsets?
The first thing we ensure is that we hire the right people. For example, at the DBS Asia Hub 2 in Hyderabad, we are going to organize a hackathon in the first week of April this year, wherein we will pick the very top developers and give them an opportunity to work with us. Through this recruitment drive, DBS Hack2Hire, we will hire 100 technology skilled professionals in emerging and disruptive technologies across cloud, machine learning and Big Data. We have collaborated with leading technology providers such as Amazon Web Services, Cloudera and Pivotal for conducting this hackathon.
We are seeing rapid advancements in banking technology using cloud, machine learning and Big Data, which are paving the way for a new world of seamless banking. We want to bring developers well-versed in these new technologies into the bank to accelerate our digital transformation efforts. We believe that recruiting via a hackathon is an innovative and effective way to attract the right talent. Meanwhile, we recently conducted a similar initiative in India named ‘Ideathon’ to identify talent from top business schools across India. This was part of the bank’s campus engagement and communication strategy, aimed to make DBS Bank the preferred place to work for millennials.
Besides, on a regular basis, we organize a lot of ‘lunch and learn’ sessions, wherein we invite industry thought leaders who talk on digital currency, Blockchain, IoT, robotics, and other areas. We have a daily newsletter that goes out to staff around highlighting all the innovations being done across the globe. Then, we have startups working with internal staff, wherein from the technology perspective, they get to see the new tools and techniques. We have also rolled Office 365 to improve our collaboration. We have started a strategic technological initiative, called ‘GANDALF’, which stands for Google, Amazon, Netflix, DBS, Apple, LikedIn, and Facebook. From each of these businesses, we learn different things. For example, from Netflix, we learn how to run experiments and from Amazon, we learn how to manage data.
How do you perceive the Indian talent vis-a-vis other countries of this region?
When you look at other countries in the region, China has strong tech talent and very well known for its hardware manufacturing. But they haven’t explored the potential of software and exports well. And that’s the reason you don’t see any big Chinese software platform or system integrators that people are familiar with. Whereas, India as a country is known for manufacturing, system integration, and great products. We know that India has got talent but it’s time for the country now, to think about the next level. For example, India must think how different vertical industries can reinvent themselves in this age of disruption.
Besides, India has a strong infrastructure in place. The recent demonetization exercise has driven a lot of people towards digital platforms like UPI. Currently, China is the ‘Fintech hub of the planet’ but nobody wants to use Chinese Fintech outside of China. Here lies the opportunity for India that is poised to become the ‘Fintech capital of the world’ and the country can achieve this feat in the next 3 years, provided the decisions are taken quickly. India, truly, has the potential to become the Fintech capital of the world. The huge ecosystem of startups, corporates, and government agencies can make it possible.