Piyush Gupta: Banking, Fintech--A Potent Force

2017-09-01 IMI

This article appears in OMFIF's fourth annual Global Public Investor report. Piyush Gupta is Chief Executive of DBS Bank. The digital revolution has been accelerated by the merging of mobile technology, networks and big data. Between them, they have redefined many industries. From transport to retailing, whole sectors are being disrupted, and companies such as Uber, Alibaba, and Airbnb are seriously challenging the status quo. These businesses have succeeded by combining innovation with better customer experiences. Alibaba’s vision is to ‘become more a part of peoples’ lives and ‘fulfil all their needs’. It has moved beyond its core activity of e-commerce to offer digital platforms and mobile apps that enable customers to invest, secure loans, make travel reservations, and consume digital entertainment and news. All these services are supplied by Alibaba’s companies or its partners, and are accessed through Alipay, its payments platform. Alipay is one of the biggest payment companies in the world with over 450m users. It processes 170m transactions daily. The extensive networks created by Alibaba, Facebook and Google have allowed them to encroach into financial services. These platform providers, not fintech companies, are the biggest competitors to financial institutions. All is not lost for banks, though. While disruptive technology is a challenge, that discontinuity can be turned into an opportunity. Banks have innate advantages: robust networks and infrastructure, established risk management frameworks, and generally being seen as safer and more trustworthy. In recognition of this, fintech companies are turning to partnerships with banks so as to benefit from their expertise, capital and networks. In return banks want access to fintech companies’ agility, customer-focus and inventiveness. DBS has over 280 branches in 18 markets, and is continuing to grow. Harnessing fintech and offering banking through digital channels is enabling it to expand into countries such as China, India and Indonesia without a substantial bricks-and-mortar presence. In April last year, DBS launched digibank in India, a mobile-only operation underpinned by technology that includes biometrics, artificial intelligence, and an intuitive recommendation engine. DBS worked with a number of startups and fintech companies: the artificial intelligence technology came from Kasisto, a US-based fintech; while Singapore startups Moneythor and V-key supplied the recommendation engine and virtual key. Digibank has allowed DBS to penetrate the retail banking sector without the need for an expensive branch network, and in 10 months has acquired more than 840,000 customers. Plans are underway to establish digibank in Indonesia. To ensure DBS is involved at an early stage with emerging technologies, it is running pre-accelerator programmes for fintech companies in Singapore and Hong Kong. Its innovation facility – DBS Asia X – which launched last November, is fostering even greater collaboration with the fintech network. Across the bank, staff are being encouraged to be more ‘fintech-like’ in their thinking and way of working. The focus is on the customer experience, experimentation, and not being afraid to fail. Last year, the bank ran more than 1,000 experiments. Big data analytics are being used in branch auditing and by the bank’s operations staff to rethink the cash cycle, while human resources uses analytics and predictive technology in its recruitment. DBS is certain that leveraging fintech is integral to the future of banking.

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Piyush Gupta: Banking, Fintech--A Potent Force

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