What can the Financial Sector learn from the best Bank in the World?

AI, ML, Financial services

The unstoppable technology boom has birthed a modern generation of tech natives creating a ‘generation gap’ that is opening up new customer challenges for today’s traditional business.

Nowhere is this more evident than in the financial sector. Many financial organisations were established in the pre-digital era so it’s no surprise they are encountering adaption problems in today’s world. Armed with a following of loyal customers from previous generations, it can be difficult to embrace new technology and transform customer engagement practices to entice a new digital savvy audience while retaining existing customers.

But many financial institutions are now waking up to the realisation that their growth prospects will be severely limited if they don’t adequately serve the needs and expectations of the digital generation. Slowly but surely, the industry is beginning to understand that there is a need for an even bigger shift – moving from the traditional bricks and mortar buildings with an over-the counter service to providing on-demand invisible personal digital financial assistants.

In 2016, KPMG predicted that by 2030 the rise of invisible banking would become mainstream. The concept of invisible banking revolves around consistent and frequent interaction that is bespoke, meaningful and, crucially, hands-free. Driven by the development of AI, customers will receive a service that integrates into their lifestyle and provides them with a seamless banking experience that is more convenient, faster and enjoyable. But how close are we to making invisible banks a reality?

Most financial service organisations in the UK have started to embark on their digital transformation journey.  It could be taking the first steps into public cloud, to embracing big data and AI. But many are still very much struggling to rid themselves of legacy back office systems which are holding them back. For some real inspiration we need to look to the other side of the world where one organisation is already taking huge leaps to tap into the world’s ever-growing population of tech-savvy audiences.

“Live more, bank less”

DBS Bank (Development Bank of Singapore) was formed in 1968. Born and bred in Asia, the company has a fast-growing presence in Southeast Asia, Greater China and South Asia but to continue their growth and expand their customer-base, they knew they needed to break away from the legacy technology that was holding them back. So, in 2009, they invested heavily in cloud computing, micro-service architectures, open source, APIs and machine learning to provide the technology backbone that would enable them to become a leading digital bank with a drive to eventually become ‘invisible’.

Since then, the bank has conducted over 1,000 experiments to create a culture of innovation leading to a number of new experiences and opportunities for DBS and its customers. These innovations included the advanced adoption of machine learning to keep back office staff numbers to a minimum, wearable technology to allow school children to pay for food, a personal mobile wallet and state of the art mobile applications for customers to engage with bank services online.

In making these changes, DBS were able to gather data to better understand their customer’s needs. What they realised is that their customers didn’t enjoy banking. They wanted to live their lives, spend time with the people, do the things they loved and worry less about their finances. Equipped with this understanding, DBS strived to make the entire banking process more simple, streamlined and invisible and it’s certainly paid off. They now have over 5.2 million customers using online and mobile services. Profits are also up from 1.5BN (2010) to 4.4BN (2017) and this year they were named the Best Bank in the World by Global Finance. 

So, what can the UK financial sector learn from this?

Customers are increasingly expecting their financial providers to understand their needs and preferences and providers that fail to do this will lose valuable customers.

DBS migrated to public cloud almost 10 years ago but most financial service organisations in the UK are still battling with archaic back-office systems and toying with the idea of migrating to cloud. DBS will prove to be a crucial projection of what the financial services industry could look like in the UK in 10 years, providing we follow suite, fast.

Evidence of digital transformation is already underway with Fintech promising to transform processes, engagement and business models but we’ve still got a long way to go and as DBS has shown, transformation requires long term thinking, risk taking and excellent execution.

The clock may be ticking, but the future for finance certainly looks promising for today’s tech savvy generation.

To find out more about how Fintech is transforming the face of Financial services, click here.



Posted by Helen Thomas