Innovation and Banks
Business and Innovation are closely related. Banks prefers Human Centered Design for the betterment of their services. Today Banks are leading in Innovation economy. Mobility, cloud, big data, robotics and AI trends have influenced the customer service interface of Banks too and now Banks are moving toward omnichannel banking, digital wallet, wearable technology, P2P payments, cognitive technologies, digital branch and blockchain. At the same time, all these technologies have a potential to turn banking more vulnerable to frauds and cyber attacks therefore for securing these transactions use of biometrics (touch ID, eyeprintID, voice print authentication), encryption technologies, EMV chip technology and PFM app for mobiles etc. has become popular.
During last few years, Banks have adopted startups and business innovation culture too. Innovation and entrepreneurship are necessary elements of innovation economy. Here I would like to quote Mr. George Gilder as he used to say that economic growth is driven by unpredictable human actions and creativity. Gilder identifies entrepreneurship and innovation as the central contributors to economic growth and that financing entrepreneurs is a necessary corollary.
I believe that entrepreneurs are playing the role of change agent in innovation economy and banks are actively supporting them…to fuel entrepreneurship culture banks are investing in incubators, accelerators and hackathons, such initiatives have created a positive environment for entrepreneurs.
Our Prime Minister Mr. Narendra Modi used to say that 21st century belongs to Asia. Last month he addressed ASEAN summit and he said that “India and ASEAN are natural partners, our ties date back to ancient times. ASEAN’s ten member countries form an economic powerhouse. ASEAN has emerged as one of the largest economic zones in the world. Last fifteen years have seen your rapid and yet stable growth. Your Macro-economic stability has been the main reason for growth and stability in South East Asia. With good governance, futuristic infrastructure and focus on new age technologies, you have created excellence”.
This year in the month of March, finance ministry representatives of ASEAN signed Banking Integration Framework to strengthen the regional bank’s competitiveness. The ASEAN Banking Integration Framework (ABIF) will allow the qualified banks to operate across ASEAN as if they were a local bank. I believe this is a significant step for the ASEAN banks.
Singapore is the second-largest source of foreign direct investment in India and it is India’s 10th-largest trading partner. Singapore and Malaysia has a dominant presence in other countries through its financial giants such as DBS Group, United Overseas Bank, OCBC Bank and Maybank.
Singapore’s financial sector is vibrant and when it comes to innovation, technology and startup culture there is no doubt that Singapore is leading in the region. Singapore finance minister Mr. Tharman Shanmugaratnam in his budget speech mentioned that the government has added “advanced robotics” and “additive manufacturing” – 3D printing in other words – to a list of areas Singapore should be a leader in.
Some Interesting Facts: DBS bank of Singapore is popular for its innovative capabilities. In 2014 DBS bank announced that it will invest 200 million SGD over next three years in Digital Banking. Recently DBS is lauded for having the world’s most Innovative Business Model at the 25th Private Banker International Global Wealth Summit. DBS’s top management is committed to innovation and their focus is to impart innovation in the culture of organization as DBS’s CIO Mr. Neal Cross used to say that focus of corporate innovation at DBS is not to produce new products and services, but rather to change mindsets so that when employees return to their desks they are thinking of new ways of doing their jobs.
DBS bank is running HotSpot Pre- accelerator program, with 11 selected startups, 35 mentors and 21 partners (top venture capital firms, top accelerators, technology companies, research labs/institute and academia) it aims to promote entrepreneurship and intrapreneurship in Singapore through experimentation, mentorship and funding. This programme support FinTech, Social Enterprise and all Digital startups from ideation to execution phase. DBS is running similar accelerator programs in Taiwan and Hong Kong too. Innovation team under Mr. Neal Cross is doing great work, this year they worked with 145 tech startups and created some 120 new prototypes. Innovation team is running hackathon and series of other events to infuse innovation in organization. DBS Bank also launched a venture debt programme to provide financing to technology start-ups and expand capital-raising options for technopreneurs. DBS started some research labs and innovation center too, it has started an in-house human center design lab in partnership with Institute for Infocomm Research- A* Star, DBS joined hand with Singapore Management University (SMU) and opened a research lab ‘Life Analytics’, around 10 researchers of this lab are involved in processing data collected from social media platforms such as Facebook and Twitter. DBS also started an innovation center called Silicon Alley. DBS introduced an enhanced version of DBS iWealth- its all-in-one digital wealth management platform. Another interesting product that it launched is RM Mobility, which provides relationship managers with an integrated mobile platform that is used to engage customers from the very beginning of their banking experience with DBS. And DBS bank is IBM’s first Watson customer in Asia, last year DBS entered into an agreement with IBM Watson to use cognitive computing for the betterment of its customer experience and services.
United Overseas Bank (UOB) and Infocomm Investments have partnered in a joint venture to launch “FinLab” an acceleration programme to promote and accelerate the growth of the FinTech start-ups and innovators. It will look for Fintech startups that are less than three years old and with working prototypes in areas like payments and collections, risk management, big data analytics and wealth management. The FinLab is also open to all UOB employees, Mr. Janet Young, head of group channels & digitalization at UOB said that “Fintech startup within Southeast Asia will be guided by experts at The FinLab, ranging from software developers to product managers and senior bankers from UOB. The FinLab will bring together Asia’s most promising startups and UOB employees to help transform emerging technologies into what could be the future of financial services. UOB has long believed in nurturing businesses to their full potential.” Under this programme, some 30 Fintech will be offered up to S$30,000 of funding, a working space, software access, and mentorship from UOB bankers. They will run a three months cycle of building and pitching products. UOB has also entered into an agreement with Temasek an investment company, to provide venture debt financing to start-ups in China, India and Southeast Asia. The UOB-Temasek joint venture will provide up to US$500 million in venture debt loans over the next five years to high-growth, innovative start-up companies operating in sectors such as technology, consumer, healthcare, and clean technology.
In 2013 OCBC Bank has launched MILLENNIALS, a platform to hear ideas from bank employees on how they can improve the experience of both OCBC’s external customers and employees. OCBC is also running an “innovation lab” where bank staff at all levels including interns gather to brainstorm and incubate ideas. As per their official records since the opening of the lab, over 7,000 ideas have been collected from 1,500 employees, of which 200 ideas have been implemented.
In 2011 OCBC Bank has launched an initiative called Frank by OCBC that aimed at young people and students. OCBC set up Frank by OCBC Stores in malls and other shopping areas that mimicked retail stores. OCBC also partnered with Playmoolah, a Singapore based startup, which uses games and videos to teach pre-teens about using money and the basics of concepts such as credit, charity and debt. Last year OCBC Bank launched a new feature called “Pay Anyone” for its iOS consumer app, this feature allows instant money transfer via Facebook, email, or SMS within Singapore. OCBC is also planning to launch venture debt for young companies which have earlier raised capital from venture capitalists or angel investors.
It is visible that Singapore’s banks are playing a smart role in technology and innovation. At the end, I would like to say that Innovation is creating something fresh for the betterment and Banks should include this as one of the best practices of their work culture.