Innovation at scale is critical: UOB

Singapore

For banks that aim to compete in a region as diverse as Asean, innovation at scale is a critical competitive edge, said a top UOB executive.

Not only is it more efficient as synergies are optimised across the different markets, it also results in speed to market as solutions and services get rolled out quickly without having to start from scratch each time, said Susan Hwee, head of group technology and operations at UOB. This enables banks such as UOB to stay nimble in the light of the stiff competition in the region, she added.

Ms Hwee said UOB's technology strategy and resources are focused on the bank's business priorities: to extend its regional connectivity to support its wholesale banking business; expand its omni-channel and digital strategy to target the rising affluent in Asean; and enhance regional infrastructure to optimise synergies and scale.

To enable these priorities, standardisation is required across the bank's regional network for a seamless customer experience across the region, she said.

UOB's IT architecture features standardised core systems on which an integration layer is built - this layer enables the bank to plug in new technologies as it innovates for customers and to scale up these solutions quickly across the region, she added.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

"At the same time, we are able to limit exposure to our core banking systems, thereby ensuring that we continue to meet our robust risk management frameworks."

Salient example

One of UOB's most salient examples is its digital bank TMRW, which was built in 14 months and deployed across Thailand and Indonesia in a matter of months.

While TMRW is the same digital bank in both markets, there are still some differences such as in the onboarding process to address the regulatory, technological and cultural nuances of each market, she said.

"By building on our modular regional platform, we have the agility to adapt TMRW to meet the different country regulatory requirements without rebuilding the digital bank from scratch."

Even so, this is no easy feat as Asean is so diverse, with each market having its own set of regulatory requirements and business dynamics. It takes perseverance, commitment and a multi-year investment to be able to build to scale, she noted.

Many organisations, even multi-national corporations, often do not stay the course to establish a standardised IT platform across their key markets due to the complexity. "This often leads to systems that work in isolation and in the end drive poor business outcomes," she said.

Another key pillar in UOB's technology strategy is technology partnerships.

One key consideration on this front is distinguishing between what will become foundational versus those that are "technology fads", Ms Hwee said.

"However, what has not changed is that banking is a highly-regulated business and we need to evaluate carefully and stringently the technology available and its longevity once implemented," she said.

"We also look at the partners in detail because many financial technology (fintech) firms are still in the early stages of their businesses and we cannot run the risk of the technology failing because the fintech startup fails."

The bank worked with fintechs Meniga and Personetics to build TMRW's digital engagement engine, using data analytics to personalise the banking experience for each customer.

Meniga cleans and categorises large volumes of transaction data which is then fed into Personetics' artificial intelligence-driven cognitive analytics solution to identify transaction patterns.

The bank then uses the results to provide customers personalised "insight cards" within the mobile app.

"Key for every technology solution that we adopt is that it must suit our business focus and fit our architecture," she said. "The agility of our purpose-built IT architecture means that we have the flexibility to plug-and-play out-of-box solutions, customise solutions to meet our specific needs and co-create new solutions where there are none available in the market."

However, one hurdle that the bank often faces is finding the right technology solution that enables the bank to meet its business aspirations and goals, even as the fintech industry in Asean is growing, she noted, adding that the bank has had to "cast a wider net" to invite global fintech companies such as Israel's Personetics to work with UOB and to launch their businesses in Asean.

The final piece of UOB's technology strategy is to balance innovation with a strong risk culture. "As a bank, we are highly regulated and this means we must be mindful of our obligations and how our innovations create a safe, smarter and simpler experience for our customers."

Ms Hwee pointed out that driving innovation at scale is not a one-way street where new products, services and processes are distributed from the hub.

UOB's regional standardised core banking platform serves as a cost-efficient "common kitchen" across its network where new innovations and best practices can be shared, adapted and adopted across all business units, she added.