Tag: social media

Banks and financial institutions must take a leaf out of social media companies’ book to provide digital and seamless experience beyond the core banking facilities, said Taimur Baig, MD & Chief Economist, DBS Bank Singapore.

“It is no longer about bank branch, site, doing certain transactions is not enough. Customer demand and want more. banks can introduce robo-advisory, that does not require face to face interaction and is a simple model to use,” Baig said while delivering the keynote address at the ETBSI Virtual Summit, Baig spoke about the four pillars which can hold banks and the financial sector in a good state.

Listing augmented, open, cognitive and automation banking as the four pillars that can hold banks in a good state, he said, “New ways of interacting with customers will provide value to customers and bring them joy, hence they will continue to come back.”

Augmented banking

Under augmented banking, banks can introduce robo-advisory, that does not require face to face interaction and is a simple model to use.

“They can eliminate handmade signatures and enable biometric signatures. They can enable digital onboarding allowing customers to upload PDFS and do digitally and seamlessly. They can provide intelligence services like newsletters, articles through apps, websites etc,” he said.

Open banking

Open Banking is allowing banks within the banking system as well as the broader financial sector to come with pipes, so that the information, payment instructions can move freely and cheaply across the financial sector. “Combine the services you offer as a bank with other vendors, banks. For example, bank tying up with food service, taxi service company as a result payment services, information can move freely providing value and convenience to customers which translates into higher revenues for banks,” he said.
Citing marketplace for api, credit, reserve management, cross border payments as other areas for open banking, he said, “Having marketplaces where other participants can come and work as a peer providing better services to customers, institutional customers across retail and wholesale will be critical.” No discussion of open banking is not complete is without blockchain.

Underscoring the importance of blockchain in open banking, Baig said, “Normally when we have cross border transactions, we have many parties, companies, Banks, many payments companies in the middle, all of those can be brought into transparent context.”

Cognitive banking

Cognitive banking as the name suggests is about the intelligent ways of coming up with customer solutions for clients. “It is like the way when you surf tTik Tok, Facebook or Instagram. The algorithm of particular apps will know about your usage history and will provide you with set of content made just for you,” he said.

“Why cannot we do it as banks. We have a lot of data with us. Why don’t we make use of these data and develop tailor-made solutions for them?Cannot we create a recommendation engine for our clients based on that, Baig asked.

Automated banking

Automated banking is about automating bank’s services such as organisational resources, fraud analysis, anti-money laundering aml-cft type work, AI, audit tracing, loans approval. “All of those things should not be subject to many days of process, many human interaction, lot of errors in decision making. This should be a part of seamless process done automatically, very very cheaply but using data, using cutting edge machine learning and AI,” he said.

Learnings from the pandemic

Fifteen months into the pandemic we could confidently say that banks all over the world have held themselves well, Baig said. “The Indian bank system has had a tough time in last 5-6 years in terms of bad loans, they themselves did not fall into a significantly deeper hole because of pandemic happening last year or so, he said.

Even though it looks very bleak right now, this will pass, he said.

“We know better it is also about the economic dimension. We know how to help people in need, we know how to bring assistance to them, and it was fairly successful. We know how to keep factories growing, agriculture growing even if there is an outbreak. Because given last one year experience we know how to keep this activity going even if the statistics show alarming numbers of outbreak.”

It will be tough going this quarter and perhaps also next quarter, but this time there are certain factors different from the last time.

The call for the wholesale downfall is premature, downfall risk has increased but still there are know-how protocols which will allow to rise through this storm, he said.

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