Shee Tse Koon, Singapore country head of Asian financial giant DBS — formerly known as the Development Bank of Singapore — believes some banks just want to put on "digital lipstick" when it comes to modernizing their technology functions, but that is not the way to go.
"We want to be digital to the core," said Tse Koon, who leads the bank's digital banking-related efforts in the country. The digital banking ecosystem has already grown fast in Singapore but is seeing more momentum after the
This will inevitably bring new competitors to Southeast Asia's largest bank, but DBS is OK with that, Tse Koon says. The bank, which
In some ways, as Tse Koon describes it, the bank has far exceeded its original business model as a bank and operates more like an Alibaba or Amazon. Customers who bank with DBS are part of an "ecosystem." They can shop at DBS's marketplace for non-financial services such as airline tickets, hotel bookings, utilities packages, homes, vehicles, education and health care products and services.
They can pay with an e-wallet, known as DBS PayLah!, which was the first e-wallet launched by a financial services company in Singapore. Today, 80% of Singaporeans use an e-wallet for payments, and over half of them, around 2 million, use PayLah!, according to the company spokesperson. The bank uses artificial intelligence and machine learning to provide what it calls "intelligent banking nudges" personalized to each customer. It also offers a wealth management platform called
We spoke with Tse Koon to learn how DBS got to this point, how they see their peers in the industry and what DBS plans to do next.
This interview has been condensed and edited for clarity.
With digital banking and all these features that you have, how does that fit into the broader picture of banking in the region and patterns of banking in the world?
SHEE TSE KOON: In Singapore, we have this whole concept of making Singapore a smart nation. It is a whole national effort to drive digitalization, to try and drive more disciplined retirement planning. And these are real issues I think many countries are facing with an aging population, pensions, etc. I think one thing Singapore has done well as a country is public-private partnership. [Consumer] adoption [of digital banking], actually has, a lot of times, involved [a] very close partnership between private-sector players like us and multiple relevant government agencies.
What do you think is holding back peers in banking from implementing more comprehensive changes that you think could be more mutually beneficial, in terms of generating greater profit and also meeting many customers' complex needs in this environment?
In fairness, I think a lot of players are fast catching up. I guess it probably started with the ability for them to appreciate the changes that were happening around the world. We saw that megatrend around 2013 of the rise of fintechs, multiple players trying to disrupt and break up banking into little services. We saw the rise of big platform companies, tech companies who are trying to come into the financial space and hence the term [fintech]. We also came to this realization that technology is not the sole proprietary right of any one party. People have access to technology; we do as well. And many of these technologies today are open source technology anyway. So we went through that transformation early on, because we saw the mega trends. The entire transformation journey does require a lot of structured discipline to go to the core of it, and that's really all about leadership and cultural change.
When you look around you among the people who are doing things in digital banking right now, at traditional banks and fintechs, who out there do you admire or envy?
We do see, in some cases, a very clear distinction between fintechs and banks. We admire the tech companies. Why? They use a lot of the technologies in a much more effective way which we are learning from. A lot of that has to do with, for example, artificial intelligence and machine learning. The ability to experiment rapidly, do multiple experimentations and let the machine learning deal with the data, and feed data, and then churn out insights and continuously learn. These are areas where we have built technology and continue to work on it. So I think compared to many financial players, I do think that we are quite leading edge in this space. We already [generate] 30 million customer insights every month. But the big tech companies do do some of these things, I think, better than financial. So we look up to that.
You've been telling me about some of these products that make life very convenient, including hyper-personalized nudges. What I'm also wondering is how you plan on balancing that with concerns that might come up around privacy and security.
All our data actually has got multilayer protection. And we have two ways to ring-fence. There have always been attempts, not just with us, but anybody and everybody else [to steal data]. And in our cybersecurity unit, there is a whole command center where at all times, there are people monitoring, even activities in the dark web. And we actually take down a lot of false sites. So it's not just about attempts to hack. You see that happening for some companies. We have the measures first and foremost [to] stop DDoS attacks, but at the same time, we actually have the ability to do the same. We find dark players out there and we also counterattack.
But I think what's more important for us, apart from cybersecurity, is privacy. The No. 1 question for us is, is the data used for the purpose that the data was intended to be for? No. 2, is it surprising? When a customer receives something from us, the customer should not be surprised at all, that gets a little bit creepy. Three, is the way that we go about [it], how we craft our messages and all that. We've got to do it in a respectful manner. And then four is, is it explainable? So everything that we do is subject to scrutiny from the customers or our regulators and must be explainable. And in all fairness, banks have always use[d] data anyway. Like, why would I lend this person or this company so much, versus that [one]. It's all down to using data, behavior, analytics and all that. It's not totally new. It's just, in this new age, probably done a lot more.
What are you looking forward to doing next? What else is out there for you?
I think the next steps are really about just how we talk about AI and ML. We've made good progress, but it's an ongoing journey. Leveraging AI and ML is one of those things that we'll continue to double down on. [In] the digital asset space as well, we've already put the infrastructure in place now, but we are actually now moving towards self-directed self-service for customers.
