Singapore, famend as a monetary hub and the outstanding digital financial system in Southeast Asia, is spearheading digital transformation in monetary providers, together with its incumbent banks.
Whereas conventional banks have been sluggish to modernise previously, this current digital transformation push has been additional exarcebated by the Financial Authority of Singapore (MAS)’s endorsement of fintech startups and digital-only banks.
The award of digital full financial institution licenses in December 2020 to GXS Financial institution, Sea Restricted’s Mari Financial institution, and Belief Financial institution has sparked a digital revolution amongst Singapore’s three main banks: the Improvement Financial institution of Singapore (DBS), Oversea-Chinese language Banking Company (OCBC) and United Abroad Financial institution (UOB).
The digital transformation methods of banks in Singapore, aimed toward competing with rising fintechs within the aftermath of surging digital adoption by customers and companies post-pandemic, are poised to function a blueprint for different conventional banks in Southeast Asia.
In the long term, these digital transformation methods may higher equip incumbent banks outdoors of Singapore to deal with key points plaguing their international locations similar to giant unbanked populations, unmet buyer wants, know-how modernisation, and expertise gaps within the digital sector.
So how is the ‘Huge 3’ of Singapore banks every tackling their digital transformation agendas?
DBS: Embracing tech firm considering
Not like most main banks, together with these within the US and continental Europe, DBS has made vital strides to determine itself as a tech-minded firm for years.
As a part of its digital transformation journey which kicked off in 2014, DBS has made sizeable investments to overtake its know-how stack, making it cloud-native. At the moment, a exceptional 99% of its purposes are both cloud-native or cloud-enabled, showcasing the financial institution’s dedication to cutting-edge know-how.
In a strategic transfer in 2018, DBS established the Platform Working Mannequin. This progressive mannequin brings collectively personnel from throughout areas and roles to collaborate on 33 platforms — facilitating the sharing of information, sources, and reusable property throughout the financial institution.
This collaborative mannequin has confirmed notably fruitful within the Client Banking Group, the place, in that very same yr, groups constructed a man-made intelligence (AI)-powered engine to supply clients self-service digital choices.
A key side of this award-winning digitalisation course of has been the collaboration with Amazon Net Companies to coach over 3,000 DBS staff in digital instruments, AI, and machine studying.
DBS has developed 85% of its know-how in-house throughout its cloud-based tech infrastructure transition, harnessing knowledge for personalised intelligence and analytics to higher comprehend clients’ wants.
The financial institution has adopted a startup mindset, embracing a hybrid multi-cloud infrastructure to scale back prices and concentrate on customer-centric processes. As a big step in its digital journey, DBS launched the DBS Digital Alternate throughout Singapore’s post-COVID-19 financial transition, enabling self-directed buying and selling of assorted digital property, together with safety tokens and cryptocurrencies, by way of its digibank app.
In the meantime, the collaboration with JP Morgan to co-create Partior, a blockchain-based cross-border clearing and settlement supplier, signifies the way forward for digital funds.
DBS’ Danger Platform is one other testomony to the financial institution’s digital prowess. It options digitalised and simplified end-to-end credit score processing, tapping the ability of on-demand, cloud-based design, analytics, and machine studying. The platform represents the financial institution’s centered efforts to combine superior know-how into its core operations.
Over time the financial institution has arrange or participated in a assorted assortment of forward-thinking digital initiatives, that has seen or not it’s repeatedly hailed as among the many finest retail banks globally.
Nonetheless, DBS has additionally encountered technical points throughout its digitalisation journey, with on-line banking and cost providers disruptions occurring not less than 3 times within the span of 18 months, prompting MAS to mandate a further S$1.6 billion of regulatory capital to make sure enough liquidity.
With regulators seeking to crack down on unscheduled service interruptions of important IT infrastructure at Singapore banks, MAS and customers each decried the “unacceptable” disruptions, drawing questions on DBS’ digital transformation roadmap.
The current interruptions are reportedly the primary since November 2021, when DBS skilled 39 hours of disruption — the financial institution’s worst outage in a decade. CEO Piyush Gupta issued an apology following the newest incidents, and an investigation by the Particular Board Committee with an impartial exterior skilled is underway to evaluation DBS’ know-how resiliency.
UOB: Harnessing rising tech and expertise
UOB has invested closely in large knowledge, synthetic intelligence, cloud, and robotic course of automation to digitally rework its operations. A good portion of its annual ICT spending, estimated at US$475 million for 2021, is devoted to software program, ICT providers, and {hardware} acquisitions.
UOB has integrated quite a lot of rising applied sciences to spice up its operational and repair capabilities. An enterprise-wide large knowledge platform helps UOB collect important knowledge insights to tell enterprise enhancements by AI, machine studying, and analytics.
UOB’s technology-based initiatives have been quite a few and assorted, together with the launch of the AI-powered digital monetary administration device Mighty Insights in 2019. This device integrates with the UOB TMRW (previously UOB Mighty) app, providing clients a simple technique to handle their funds.
UOB was in actual fact the primary financial institution in Singapore to launch an AI-driven service on its cell banking app UOB TMRW, offering personalised insights that help clients with their monetary planning.
Furthermore, UOB has developed an AI-driven chatbot, full with reside chat and in-app voice name capabilities, to reinforce buyer expertise digitally. This resolution is a mainstay characteristic for UOB’s digital financial institution, TMRW, in Indonesia and Thailand.
Blockchain know-how is progressively being embraced throughout UOB, together with its use within the Know Your Buyer (KYC) compliance course of as a part of TMRW’s buyer onboarding journey. The progressive know-how has been instrumental in enhancing effectivity and velocity, whereas concurrently assuring safety and transparency.
The established financial institution states that it’s constantly in search of people with proficiency in areas similar to utility programming interface (API) improvement and cloud computing. Technologists becoming a member of the workforce may have the chance to play a vital function in designing and growing options that can gas enterprise enlargement within the area.
However UOB’s suite of cell and web banking providers usually are not with out their justifiable share of issues. Platforms together with UOB TMRW/Mighty, UOB Private Web Banking, and B2B digital banking service UOB Infinity have all drawn flak for service interruptions and system delays.
In June 2019, UOB apologised for widespread disruptions to its “ATMs, card funds, web banking and [then-]UOB Mighty providers” and promised to resolve points shortly. But the next month, each its digital and cell banking providers skilled temporary delays once more, presumably highlighting the shortcomings of interdependent digital infrastructure.
The revamped UOB TMRW app was nonetheless experiencing errors the app crashing repeatedly, as late as mid-2022.
OCBC: Leaning on open supply agility for progress
As Singapore’s inhabitants turns into more and more reliant on cell banking apps for varied transactions, banks should make sure that their apps are safe, user-friendly, and functionally numerous. OCBC has embraced open supply know-how in its digital transformation journey, offering the financial institution with the agility and scalability required to modernise its know-how structure.
This method differs considerably from DBS’s technique, leveraging open supply tech as a resilience measure towards dependency on proprietary know-how. OCBC believes this may speed up its innovation edge and energy its data-driven options.
OCBC is updating its IT infrastructure on two fronts. The primary focuses on core channels similar to web banking, cell banking, and make contact with centre apps. The second centres on the Enterprise Knowledge Science Platform (EDSP), which is able to improve its AI deployment.
OCBC is adopting a hybrid cloud mannequin to scale back dependency on any single supplier, whereas sustaining auto-scaling capabilities to assist platform wants. Because it migrates its core apps and providers to the cloud, the financial institution is beginning with customer-facing purposes, digital channels (web or cell), and make contact with centre purposes. Subsequently, it plans to sort out core banking capabilities like cost and mortgage purposes.
OCBC’s EDSP, leveraging Purple Hat’s OpenShift platform, helps streamline the financial institution’s inside knowledge science processes and facilitating the event of smarter enterprise apps. The EDSP is driving progress in areas of credit score analytics, buyer chatbot optimisation, and anti-money laundering (AML).
The shift in the direction of a microservices-based ecosystem is making the rollout of latest merchandise quicker and more cost effective, changing the historically cost-prohibitive, monolithic legacy banking infrastructure.
Like many international locations, Singapore skilled an upsurge in cyber phishing scams within the wake of COVID-19, resulting in the banking sector as a complete ramping up measures to boost consciousness and forestall cyberthreats. Amongst these impacted was OCBC Financial institution, which confirmed that a few of its clients had fallen sufferer by offering their on-line banking login credentials to phishing web sites masquerading as official OCBC platforms in fraudulent SMS texts.
To handle this, the financial institution launched an immediate ‘kill change’ characteristic to present its shoppers extra autonomy within the occasion of a suspected rip-off, enabling potential victims to instantly freeze all related present and financial savings accounts together with joint accounts, debit and bank cards, ATM entry, digital banking, in addition to OCBC Pay Anybody app entry.
As well as, OCBC made goodwill payouts to a few of its affected clients, promised investigations and wider trade oversight to tighten anti-fraud detection and prevention measures. To that finish, OCBC plans to launch a brand new AML utility that makes use of AI operating on OpenShift.
Specializing in enhancing buyer and worker experiences, the financial institution is additional leveraging its digital capabilities, together with rising applied sciences like Web3, in its ongoing journey of AI deployment.
