How DBS Bank leads on innovation

According to DBS Bank chief innovation officer Neal Cross, leadership, autonomy, education and inspiration underpin the bank’s culture, supporting its ability to digitally transform.

Cross, (pictured), was one of the bank leaders interviewed in the inaugural TAS Banking Industry Report. The report surveyed delivers insights from over 50 banking executives across Australia’s finserv industry.

In a first-hand look at key findings from The TAS Banking Industry Report, insights revealed that the top two priorities for bank investment over the next yearers were transformation and technology (37 per cent) and digital strategy and leadership (33 per cent), followed by alliance partners (19 per cent).

The findings are consistent with other industry research. KPMG data also found that for many chief executives, implementing a digital strategy is one of the biggest challenges for the sector. “Put simply, if you master the transition to a digital and data-driven bank, then you have a greater chance of gaining a competitive advantage,” the report said.

“This is why digital strategy and leadership is the second rated strategy by the leaders we interviewed to get ahead.”  In the TAS report, Cross highlights how the Singapore-headquartered bank drives its innovation agenda.  

Cross said leadership needs to ensure staff are confident to experiment with new ideas while autonomy, which Cross describes as freedom, allowed his team to invent their own programs outside their commitment to their day-to-day job.

Education is also key in “providing the tools” to innovate while inspiring our people to do their best in their careers makes “you unbeatable as a business”.

The bank is also going agile across the business to get people to work in cross-functional teams.

“We are also focused on improving alignment of technology and business which involves turning technology into platforms which is co-owned by business and tech.,” Cross said.

For the chief innovation officer, the two levers in his business is ego and ambition. “A person who has a big ego is usually successful but a company which has people inside it with ego and ambition can be detrimental,” he said.

“What you must do is drive ego down to more eco-system thinking, which involves being open to collaboration, learning new innovation methodologies and working with fintechs and start-ups.”

Digital lipstick

This approach is also important as it ensures the bank doesn’t “benchmark ourselves against only the banks.”

“Instead, we benchmark ourselves globally against many different areas, such as the tech and e-ecommerce giants.”  

The bank includes 24,000 staff members and for Cross, they all have an innovation role. “It’s our job as a group to make them successful. That’s what a lot of companies forget with regards to digitisation. It’s about the staff and the way they operate.”

In the report, he also shares his views on how banks are grappling with the challenges of going digital.

“The problem isn’t that banks need to go digital. The real problem is that digital is coming to banks.

“This is a massive time of disruption. So, if your company’s strategy is to take your mobile banking platform and try to make it a little bit sexier and re-release it and say, ‘my digital strategy is done’, then you’re at the wrong end of digitisation.”

According to Cross, banks also tend to apply a ‘digital lipstick’ approach to innovation.  For DBS, its strategy is “more ambitious and involves going digital to the core”.  

He adds, “there is this term ‘digital lipstick’ and that’s what a lot of companies are doing. They are just putting digital lipstick on current products and services and believing the job is complete.”

He acknowledges “while some companies are doing an amazing job, especially the banks in China, other banks, however, are just putting lipstick on, while others are running the wrong way, and most aren’t focused on the culture piece”.

“Banks are hierarchical, risk averse and don’t collaborate. In a way, that is the culture of most companies. So, changing that culture is the key to success I believe.”

Its approach to leadership has paved the way for DBS to lead on innovation. At the end of last year, DBS launched the world’s largest banking API developer platform “which has been widely successful”.  

He also spoke on the latest technologies adding that regulators are now allowing banks to use cloud which has reduced the cost of operations. “The smart banks are then reinvesting that saved capital into more innovation in their products.”

Indeed, the TAS report also highlights that other banks in the sector, most notably in Australia, lag in adopting the latest technology.

Only 9 per cent of leaders interviewed appear to be investing in the very latest technologies, including artificial intelligence automation, robotics or blockchain.

The inaugural TAS Banking Industry Report will be officially launched at an industry event on August 16 in Sydney. Speakers at the event will include TAS CEO, Shane Baker, Ryan Gonsalves, retail banking strategy and innovation, AMP Bank and Catriona Wallace, founder and CEO, Flamingo.

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