Wednesday, 17 July 2024

Highlights from the Singapore Fintech Festival – The future of banking

5 min read

By Richard Hartung

The Fintech Festival’s second day saw panellists plunge into discussions regarding the future of banking, digitisation, technology, and preparations for the changes that lie ahead.

  • Financial institutions need to go digital, reduce the price point, and modernise in order to maintain their competitive advantage
  • Day two of the Fintech Festival saw discussions on digitisation, an investment in technology by Standard Chartered Bank, ANZ’s goals to take advantage of tech, and what bankers need to do to prepare for in the future
  • There are two types of changes ahead – one revolves around transactional finance and strategic finance, the other involves shallow work and deep work

During a “fireside chat” during the Singapore Fintech Festival, ANZ group executive for digital banking, Maile Carnegie, discussed her role in using existing technology to transform the bank and create a better experience for both customers and employees.

Even though she only recently joined ANZ Bank, after 25 years working in consumer-focused innovation spaces, her remit is massive. She has the objective of helping ANZ transform itself so that the bank can take advantage of existing and emerging technology to provide a better experience for customers and employees.

What keeps her awake at night is not competition from other banks or financial technologies (fintechs). “I see fintechs as potential partners. What keeps me awake are the tech giants. They are setting the bar in customer experience. Security is good. They have a route to market. They want to get into financial services. In the short term, it’s the tech giants.”

To stay ahead, she’s focusing on partnerships. “I don’t see any organisation winning going forward unless they’re excellent at partnerships,” she said. “Consumers increasingly demanding. I don’t think there are sole organisations that can deliver on their need. The only way we’re going to get great partnerships is if we are a great partner.”

Her advice to start-ups is not to shy away from the obvious space. “Going where the herd has gone, and how you differentiate – I encourage people to go into a busy space.”

Going digital: The $3 billion Investment by Standard Chartered Bank

Going digital is a priority for most banks, and one bank that has put in large amounts of money as well as effort is Standard Chartered Bank.

The bank decided has put $3 billion aside for digitisation, said Michael Gorriz, chief information officer at Standard Chartered. “We are striving to be the digital bank with the human touch. Throwing money at it is not solving the problem immediately.”

The bank has a range of programs to make that change. It set up an accelerator in 2016 and is extending it to Hong Kong and other countries. The IT department installed agile technology and embarked on the cloud journey, and has also embraced the application programming interface (API) journey to the extent that all new services have to be API-ready. And finally, the bank is collecting data and putting it into one central data lake for data science.

The future of banking

Taking a look forward at what bankers need to do to prepare for the future, Orogen Group chief executive officer (CEO) and former Citi CEO Vikram Pandit discussed the outlook for banking globally and then joined a panel that focused specifically on the future of banking.

To bring finance to the larger public, Prudential Corporation Asia chairman Kai Nargolwala said, financial institutions have to find a way to lower the price point. Doing all the customer checks at the same time during on-boarding at Prudential, for instance, creates a better experience and reduces the price point.

There are two types of changes ahead, Pandit said. One revolves around transactional finance and strategic finance. For a corporation, for example, strategic finance asks, “who would I buy?” For an individual, it is how to plan for their children. Transactional finance, on the other hand, focuses on activities such as buying food or a car. “The shift in the US is that transactional finance is getting unbundled and going to whoever has a need.” The other change involves shallow work and deep work. “The pace is fast. The line between strategic and traditional finance, deep work and shallow work, is happening.”

To prepare for the future, Nargolwala said, boardrooms are focused on digital, treating customers better, and lowering price points. Rather than having an army of people reviewing 15,000-20,000 fraud alerts a day, for instance, banks can use machine learning to find the 5%that need to be sent to the regulator. “It’s taking those tasks and getting those people to do higher value stuff. There’s a lot to be done.”

Pandit said banks also need to realise that they can’t have a 21st century frontend and a 20th century back end. “Redo your supply chain. And, redo competition. Every institution has to modernise.”

Keywords: Singapore Fintech Festival, ANZ, Standard Chartered Bank, Orogen Group, API, Technology, Security, Supply Chain, Digitisation
People: Alicia Garcia Herrero, Eugene Tarzimanov
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