Leaning away from legacy systems

DIGITAL transformation is, by now, a largely ubiquitous strategy across banks in an era of mobile-first customers and an increasingly diverse fintech scene. To that end, technology on its own is not a new or foolproof solution to stay ahead of the curve, says Praveen Raina, OCBC head of group operations and technology.

"The true power of technology can be realised when it is used to meet customers' needs and enhance their experience. Organisations that leverage tech to differentiate their product offerings are the ones that will survive because everyone out there has similar product offerings," he notes.

OCBC has tapped into a new technology stack - a combination of new types of software development tools, applications, services and infrastructure, among others - to develop innovative products and services.

"We leverage heavily on the new technology stack to enhance customer journeys because the legacy system can't keep up with evolving customer needs," says Raina.

Banking in the age of Covid-19 entails meeting the fast-evolving needs of individual and business customers as they shift from in-person branch interactions to largely online-only transactions today.

Solutions can range from something simpler, like enabling customers to use their SingPass to access digital banking services, to the more complex task of digital account opening for large corporates.

"The question is can we provide all the services a customer needs on their mobile banking app? How can we fulfil those needs in real time? Every customer will have a specific need, so how do we serve them without them having to come down personally to the branch? Personalisation at scale is the driving force behind our technologies and application feature developments," says Raina.

For example, OCBC's digital account opening service enables small- and medium-sized enterprises (SMEs) to open an account with the bank online, ditching the paper trail entirely.

Companies with fewer than two directors can apply by leveraging national digital identity service MyInfo, while larger SMEs can set up a virtual meeting with an OCBC staff to complete the onboarding process.

"For SMEs to open an account, they typically need to submit five or six forms at the branch. In the past, large corporates would need a whole book of supporting documents," says Raina. "The required submissions depend on the nature of the businesses as they have different needs and there are lots of regulations."

In the first three quarters of 2021, about 98 per cent of the bank's new SME accounts opened in Singapore were done digitally.

"Digital onboarding and digital account opening have empowered customers to do this remotely and at their own convenience, they don't have to queue up at the branch with stacks of paper," says Raina.

To serve SMEs' needs more efficiently, data from their banking transactions are analysed to offer more tailored services. "For example, a company may need to make an invoice payment and require some working capital. Based on our data analytics and understanding of the company's needs, we can provide a pre-approved loan to help them manage their cash flow," says Raina.

Since last year, retail and business banking customers have also been able to use digital signatures for transactions such as large corporate account opening applications and investment product application forms.

Take the case of a large corporate, which often has a more complex structure with more signatories in multiple markets.

In the past, documents would have to be couriered to be physically signed but digital signatures eliminate this step. It is now possible for loan letters of offer to be signed and turned around within the day, whereas in the past, it could take a week, says Raina.

The bank had in 2020 completed a proof-of-concept for a cross-border transaction with Sign with Singpass, with the service set to be fully implemented later this year.

Raina observes that OCBC's private banking arm, Bank of Singapore, has also seen its fair share of tech advancements and digital transformation.

With the advent of digital trading applications, it has become easier than ever for private clients to trade around the clock and on the go, on their smartphones and laptops.

"Data security and risk is a big concern. We have to ensure that robust and effective risk controls are in place at all hours. Cyber-security features in our technology facilitates a more secured platform to build greater trust with our customers," says Raina, adding that high net worth individuals typically have a larger ticket size compared to retail investors.

One way to ensure that the appropriate risk controls are in place is by analysing investors' trading behaviour, such as trading patterns and investment preferences, to detect potential anomalies in their trading activities.

Based on one's unique trading behaviour, net worth and product holdings, the private bank is further able to offer hyper-contextualisation of product recommendations and research reports. As clients' needs and interests evolve over time, the technology system is able to adapt accordingly and push out relevant content, says Raina.

At the retail level, OCBC is the first bank to enable the use of SingPass to access digital banking services.

It is also the first in Singapore to collaborate with the Inland Revenue Authority of Singapore to integrate the tax authority's payment API (application programming interface) with the bank's digital platform, OCBC Financial OneView.

This enables taxpayers to view and pay their income and property taxes on the bank's digital banking platform without the hassle of navigating between multiple platforms.

While such solutions are not rocket science, they contribute greatly to the seamless digital banking experience, says Raina.

As Singapore's new digital banks gear up to launch next year, along with the rise of more fintech ecosystems, the incumbents may see fierce competition ahead.

But for now, OCBC views these digital upstarts as potential ecosystem partners over direct competitors. "Fintechs start by looking at a problem that banks may not be paying as much attention to. We don't necessarily see fintechs as competition - they are a good complement.

"Fintechs are more nimble and can respond to market dynamics faster. This raises the bar for the entire banking industry and encourages us to evolve and offer better products and services for customers," says Raina.

The bank is no stranger to fintech partnerships, having developed its robo-advisory platform RoboInvest with Singapore-based startup WeInvest, for example.

OCBC, GuocoLand and local fintech Doxa have also partnered to develop and pilot the built environment industry's first end-to-end digital workflow platform to streamline the procurement and payments workflow processes for projects, removing the need for hard-copy invoices.

The new platform will also be able to convert quotations into purchase orders and generate cost analysis reports.