If someone had stepped into Block 79, Ayer Rajah sometime in March this year, the person would have found himself witnessing a most unlikely scene. For here at the newly expanded JTC Launchpad @ One-North, 100 of our senior bankers and some 20 start-ups from the region were working side by side to create prototype mobile apps.
If this is an uncommon sight, it is because bankers and start-ups have never been viewed as the most natural of bedfellows. Start-ups embrace starting small, moving quickly, failing fast. Banks have traditionally not been known for our nimbleness. Start-ups are not encumbered by legacy processes and systems that often get in the way of customer centricity. Many banks, unfortunately, are. And start-ups are, by definition, more inventive.
In organising the DBS hackathon, which is now a regular part of the DBS training curriculum, we were looking to break the stereotypes that define banks. We wanted to revolutionise the way we trained our people so that they would embrace a digital mindset. We sought to foster a cultural exchange between our employees and start-ups. We created a sandbox for our people to experiment like startups, utilising lean startup methodology and human-centred design to identify and act on opportunities quickly.
If the approach sounds somewhat radical, it is because we recognise that we cannot stick to the status quo.
Banking is undergoing cataclysmic disruption, driven by three trends:
The first is mobile computing, which is changing the nature of the game, because it allows banking to be integrated into people's lives instead of being a detached activity. The second is Big Data, which enables banks to introduce products and services that could not be imagined before. The third is social or the network economy. This dramatically changes the way economic agents ? whether individuals or merchants ? interact. As an example, banks have historically been lenders of money, and consumers the borrowers. Today, consumers lend money to other consumers in peer to peer networks.
Compounding the threat to banks is the encroachment into our turf of FinTechs such as Tencent and Alipay.
The rising importance of FinTech is not only changing the way people pay, lend and invest; it is also instigating change to traditional banking models.
At DBS, we don't see this as necessarily a bad thing.
While disruptive technology is a challenge, we believe we can turn the discontinuity into an opportunity for growth. Banks have innate advantages: we have robust networks and infrastructure, established risk management frameworks, and are generally seen as safer and more trustworthy. If we can marry these strengths with the agility, customer-centricity and inventiveness of FinTechs, there is no reason we cannot continue to thrive in the new world order.
In fact, we are already seizing new possibilities thrown up by the digital revolution:
Today, while DBS already has over 280 branches in 18 markets, given our Asian banking ambitions, we continue to grow our franchise. If we are able to leverage FinTech, and offer banking through digital channels, the need for a large geographic footprint in order to scale up in large geographies such as China, India or Indonesia becomes less of an imperative. A successful digital banking strategy will enable us to accelerate our access to emerging markets without the need for a large and expensive brick and mortar network.
Secondly, we have, over the years, leveraged Big Data to improve customer service, such as by pre-empting cashouts at ATMs or better anticipating client needs. We are taking this to the next level, for example, by experimenting with the use of artificial intelligence to provide even more customised advice to our wealth clients.
In the payments space, our mobile offering DBS PayLah! already allows customers to pay each other through a few simple taps on the phone. We continue to explore new emerging technologies through collaborations with research labs such as A*Star in Singapore. In Hong Kong, we have created the DBS Accelerator programme which provides us with a first look at emerging FinTech innovations, which we hope to learn from, and perhaps integrate along the way.
50 years ago, Singapore differentiated itself by creating a first-world infrastructure (both hard and soft) in a third-world region. I believe she can again set herself apart in the next 50 years by being the world's first truly digital city. Singapore has a unique capacity to do so because she is a citystate, and has the technology, resources, fiscal capacity as well as intent to become a Smart Nation.
Likewise, all of us at DBS ? whose growth has mirrored Singapore's ? are committed to leveraging FinTech to shape the future of banking, find ways to serve and engage customers better and to make banking joyful.
Piyush Gupta is the Chief Executive Officer of DBS Group Holdings.