DBS Bank - in­no­va­tion is part of the cul­ture

Banking Frontiers - - Highlights - Babu@bank­ingfron­tiers.com

An in­ter­ac­tion with Neal Cross, chief in­no­va­tion of­fi­cer

Sin­ga­pore’s DBS Bank is unique for us­ing tech­nol­ogy to make bank­ing ef­fi­cient, con­ve­nient and cus­tomer­centric. The bank’s CEO Piyush Gupta had bet big on tech­nol­ogy. To­day, the bank has the largest ap­pli­ca­tion pro­gram­ming in­ter­face plat­form for third-party de­vel­op­ers of any bank in the world.

Gupta had once said in an in­ter­view: “When we first started out along this road, we com­pared our­selves with emerg­ing fin­techs and the startup world and con­cluded that we re­ally had to dig­i­tize com­pletely, not just by putting on dig­i­tal ‘lip­stick’. We made killing pa­per a big mantra in the or­ga­ni­za­tion, for in­stance, and were de­ter­mined to go beyond just tack­ing on a bunch of dig­i­tal apps at the front end – that’s the easy bit. We wanted to go all the way through to mid­dle­ware and the back end.”

The bank has set up an en­ter­prise-wide Cen­tre of Ex­cel­lence (COE) in Ro­botic Process Au­to­ma­tion (RPA), mak­ing it the first-of-its-kind large-scale im­ple­men­ta­tion in the fi­nan­cial ser­vices sec­tor in Sin­ga­pore and the re­gion. Since the cen­ter has gone live, the bank has op­ti­mized more than 50 com­plex busi­ness pro­cesses across the bank. The RPA pro­gram is now be­ing pro­gres­sively im­ple­mented in other mar­kets in­clud­ing Hong Kong, China, In­dia, In­done­sia and Tai­wan. The bank be­lieves cog­ni­tive and ro­bot­ics process au­to­ma­tion is an im­por­tant ca­pa­bil­ity that will help with the nec­es­sary speed and agility to meet the rapidly chang­ing de­mands of cus­tomers and the evolv­ing fi­nan­cial ser­vices mar­ket­place.

Piyush Gupta be­lieves banks have to be like tech­nol­ogy com­pa­nies. Banks have to ‘em­brace’ the same tech­nol­ogy as other tech­nol­ogy-fo­cused en­ti­ties do and change their cul­ture to be ‘like a startup’, he said at a re­cent con­fer­ence. “One, we got to be able to em­brace the same tech­nol­ogy that these tech­nol­ogy firms do. That’s not tough, be­cause tech­nol­ogy is freely avail­able. To­day you go to Ama­zon’s web­site and you can get ev­ery­thing, open source gives you ev­ery­thing. But you have to be will­ing to re-ar­chi­tect your fun­da­men­tal tech­nol­ogy to be like a tech firm,” says he.

There is a whole lot of trans­for­ma­tion that is hap­pen­ing in the bank. One per­son, who is at the cen­ter of this trans­for­ma­tion is Neal Cross, Chief In­no­va­tion Of­fi­cer at the bank. He gives the per­spec­tives of this trans­for­ma­tion:

Babu Nair: What is the in­no­va­tion cul­ture at DBS Bank?

Neal Cross: At DBS Bank, more than 24,000 peo­ple are re­spon­si­ble for in­no­va­tion. The cul­ture at many banks and large cor­po­ra­tions are fol­low­ing that of the tech com­pa­nies. Tech­nol­ogy is eas­ily avail­able but build­ing the cul­ture is a chal­lenge. Hav­ing worked at Mi­crosoft, I am well-versed with the cul­ture of a large tech com­pany. At DBS Bank, we to build cul­ture of in­no­va­tion, where we func­tion like a 24,000-per­son startup. Adopt­ing this cul­ture boosts the morale of em­ploy­ees, where they be­lieve that they can achieve and in­no­vate. We are fo­cus­ing on in­no­va­tion to solve cus­tomer prob­lems. There’s a shift in the thought process - we are fo­cus­ing more on what cus­tomers and that is mak­ing bank­ing sim­ple, fric­tion­less and hope­fully in­vis­i­ble.

Can you define in­vis­i­ble bank­ing?

We are in a world where fi­nance is sep­a­rated from the cus­tomer jour­ney. We need to have a world where APIs are more preva­lent, and banks col­lab­o­rate with mer­chants for more ef­fi­cient bank­ing ser­vices. That doesn’t mean key things like se­cu­rity, and reg­u­la­tion are com­pro­mised. In In­dia, we rolled out the na­tion’s first branch­less, pa­per­less and sig­na­ture-less bank, di­gibank, back in April 2016. This was made pos­si­ble with Aad­haar. Bank ac­counts could be opened at a Cafe Cof­fee Day. We used a sim­i­lar model in In­done­sia last year.

How has the take-off been in In­done­sia?

The take-off in In­done­sia has been great. These past few years, we have trans­formed from a tra­di­tional bank to one that is cus­tomer-fo­cused. Con­sumer be­hav­ior is chang­ing very quickly, and banks need to keep up with their chang­ing pay­ment and trans­ac­tion habits.

What per­cent­age of bud­get is locked for in­no­va­tion?

Ev­ery sin­gle project in the bank is now treated as an in­no­va­tion project, with very few ex­cep­tions. We are cur­rently run­ning 350 of these in­no­va­tion projects. Ev­ery project we do, apart from work­ing on core

in­fra­struc­ture pieces, are now spec­i­fied as jour­neys which fo­cus on cus­tomers or em­ploy­ees. The DBS work­force cur­rently stands at around 24,000 em­ploy­ees, and 14,000 of them went through an in­no­va­tion project or work­shop in the last year. We want to in­spire our em­ploy­ees to do their best work, be it by help­ing them un­der­stand the cus­tomer jour­ney bet­ter, build pro­to­types, run ex­per­i­ments or use ag­ile soft­ware de­liv­er­ies. We fun­da­men­tally want to change the way projects are ex­e­cuted.

Is there any stan­dard process for in­cul­cat­ing cul­ture of in­no­va­tion?

Essen­tially it is de­sign think­ing and ex­per­i­men­ta­tion. We must un­der­stand the needs of the cus­tomer, rapidly come up with ideas to solve their prob­lems and go back to the cus­tomer to test it. Ev­ery year DBS does over 1,000 ex­per­i­ments, they range from small to large-scale. For ex­am­ple, we wanted to know if stu­dents would like free Spo­tify sub­scrip­tions as part of their credit card re­wards pro­gram. To test this, we cre­ated a brochure and talked to stu­dents around a univer­sity cam­pus to get their feed­back be­fore mov­ing ahead with build­ing the prod­uct and re­leas­ing it. My team’s job is to ed­u­cate, in­spire and guide em­ploy­ees through their projects. Peo­ple of­ten con­fuse dig­i­tal with tech­nol­ogy, but we keep say­ing “Don’t dig­i­tize your bank, dig­i­tize your staff and they will dig­i­tize your bank”. At DBS, we are at­tract­ing tal­ent we have never hired be­fore, and at the same time Google and Face­book want to col­lab­o­rate with us.

Apart from tech­nol­ogy what are the other things which can make bank­ing ef­fort­less?

APIs as an ecosys­tem strat­egy is es­sen­tial for ef­fort­less bank­ing. We launched the world’s largest bank on API plat­form in Novem­ber 2017 and now we have 185 APIs and over 70 part­ners plugged into us. They range from pay­ments, ac­count open­ing, check­ing bal­ance to book­ing a gym class us­ing your credit card re­wards points. We are adopt­ing data an­a­lyt­ics and ar­ti­fi­cial in­tel­li­gence to un­der­stand our cus­tomers bet­ter. It is one thing to be fric­tion-free to make bank­ing eas­ier, but an­other thing to have con­tex­tual of­fers for cus­tomers. Many cus­tomers who trans­act dig­i­tally with us have never spo­ken to any­one from DBS; so the only way to of­fer and ser­vice them bet­ter is through their data. An­a­lyz­ing their data will help us in giv­ing bet­ter re­wards on credit cards, and our cus­tomers value this.

How dif­fi­cult is it to in­te­grate tech­nol­ogy and in­no­va­tion to work like a sys­tem?

It has never been eas­ier than what it is to­day. We are im­ple­ment­ing tech­nol­ogy which will im­prove the lives of our cus­tomers. We do hackathons on new tech­nol­ogy, ex­per­i­ment, and build pro­to­types, but if it doesn’t add value to cus­tomer, then we don’t im­ple­ment it.

Is it true that 40% of tech cost goes into in­te­gra­tion of new tech?

It de­pends on where a com­pany is in their tech­nol­ogy jour­ney. DBS is at a stage where in­te­gra­tion of tech­nol­ogy is at a lower cost be­cause we have moved from out­sourc­ing ser­vices to in­sourc­ing, and we are us­ing tech­nolo­gies such as APIs and open ar­chi­tec­ture. These things have made in­te­gra­tion much eas­ier. In 2009, we started chang­ing our tech in­fra­struc­ture so that we could op­er­ate on a level that we are to­day. We don’t just dig­i­tal­ize for the sake of do­ing it, we are chang­ing our en­tire ar­chi­tec­ture, in­vest­ing in our peo­ple and in­fra­struc­ture, and this is how we plan on achiev­ing long term suc­cess.

What is your wish list or key things you’re look­ing for­ward to?

Reg­u­la­tion should catch up with what’s hap­pen­ing with e-com­merce gi­ants, tech­nol­ogy com­pa­nies and what fin­techs are do­ing. The Mone­tary Au­thor­ity of Sin­ga­pore (MAS) is do­ing well, RBI in In­dia is cer­tainly one of the leading reg­u­la­tors as well. It takes time to start bring­ing changes in reg­u­la­tion, but things are mov­ing very quickly and reg­u­la­tors across many coun­tries are catch­ing up. We want to get closer to businesses. As a bank, we can go beyond lend­ing to small businesses and get in­sights from them in or­der to play an ad­vi­sory role dig­i­tally.

How close should a bank get to a cus­tomer?

In data an­a­lyt­ics, you want to have enough in­for­ma­tion to add value to your prod­ucts and ser­vices, but with­out the risk of mak­ing your cus­tomers un­com­fort­able. I think all com­pa­nies are try­ing to work out the bal­ance of how much data is re­quired and to be used.

Neal Cross be­lieves it is essen­tially de­sign think­ing and ex­per­i­men­ta­tion, be­sides un­der­stand­ing of the cus­tomer, that brings in a cul­ture of in­no­va­tion in an or­ga­ni­za­tion

Hack­2Hire ses­sion in progress at DBS Bank

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