Bidyut Dumra, head of Innovation, Technology and Operations at DBS Bank, talks about internal and external innovation.
Global Finance: What drives innovation at DBS?
Bidyut Dumra: The banking industry is being profoundly impacted by new technologies and changing customer expectations. Fintechs and nontraditional banking players like Alibaba are attacking the financial services value chain. In such an environment, our future success depends on our ability to innovate, harness the digital revolution and completely reimagine the role of banks and the customer’s experience.
We are thinking deeply about customers’ true needs and how we can extend our reach into larger geographies without an extensive physical branch network. Over the past few years, DBS has been embracing various forms of digital technology—such as cloud computing, artificial intelligence and data analytics—to improve the customer experience.
GF: Is it better to partner with fintechs or better to develop expertise in-house?
Dumra: For DBS, it’s a blend of both. We have developed our own technology in-house, but we also see the value in partnering with fintechs and other tech companies.
If you look back 10, maybe 15 years ago, banks perceived fintechs as a threat. That has changed. Fintechs also realized that the best way to ensure their survival is by working with banks. Fintechs are agile and nimble; they have the ability to create new products and services quickly. But they lack the customer base, the financial knowledge, approvals from regulators and trust. Banks, on the other hand, work closely with regulators; and over the years, they have gained the trust of customers.
With this in mind, we decided to think of new ways to partner with fintechs. We launched our API platform, the world’s largest financial-developer portal, in 2017, to boost our ability to create new customer-centric experiences. It enables us to collaborate better.
We also launched Startup Xchange last year, focused on four areas of frontier technologies, to help us stay relevant in the long run. Already, Startup Xchange has successfully matched 21 startups with units within the bank as well as the bank’s SME clients to solve business pain points, resulting in the successful rollout of 10 emerging tech solutions, with another 10 expected to launch in the next 12 months.
Startup Xchange allows startups to showcase the solutions they developed for DBS and name the bank as an anchor client when raising capital. One example of a successful Startup Xchange project is with impress.ai, a Singapore-based startup and DBS SME client that partnered with DBS’ HR team to create JIM, Southeast Asia’s first virtual bank recruiter.
GF: What will the DBS of the future look like?
Dumra: Banks of today look different from the banks of yesterday, so banks of tomorrow will look fundamentally different from banks of today. We believe the future of banking is one in which the bank is invisible, where our services are seamlessly and intuitively embedded into our customers’ lives.
This is why we will continue to be deeply immersed in our digital agenda, whether it is changing the culture and mindsets of our people, rearchitecting our technology infrastructure, or leveraging technology to improve our products and services. We hope this would make banking simpler and more efficient for our customers, so they can have more time to spend on people and things they care about.
GF: Which recent innovations would you say are proving to be most useful in practice?
Dumra: We’ve seen a lot of success with our use of data analytics, cloud computing, machine learning and artificial intelligence, as well as chatbots. We use data analytics to improve customer experience and to streamline our operations—for instance, to forecast demand and to optimize loading schedules for our ATMs in Singapore, one of the most heavily utilized networks in the world. We have successfully reduced cash-outs in our machines by 90% over a three-year period. Success is being able to have a framework to assess all the above but to be guided where to place the big and small bets.