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Bank to the future

SINGAPORE — There was a time when going to the bank meant gearing up for a long wait — well-used passbook in hand — just to make a deposit, withdraw cash or perform most banking-related tasks. Then came the advent of digital channels and an array of financial innovations.

Ms Anju Patwardhan, Chief Innovation Officer of Standard Chartered Bank. Photo: Low Wei Xin

Ms Anju Patwardhan, Chief Innovation Officer of Standard Chartered Bank. Photo: Low Wei Xin

SINGAPORE — There was a time when going to the bank meant gearing up for a long wait — well-used passbook in hand — just to make a deposit, withdraw cash or perform most banking-related tasks. Then came the advent of digital channels and an array of financial innovations.

As banks seek to strengthen their position in the digital space globally, with their sights trained on harnessing future technologies, the biggest changes — from a consumer’s perspective — are mobility and a reduced reliance on physical branches, said Standard Chartered Bank’s first group chief innovation officer Anju Patwardhan.

“Today, it is all about coming out with applications and processes in making services conveniently available to consumers round the clock, in a fuss-free manner, in a way they want it and on devices of their choice. Banks will have to rapidly evolve accordingly,” she told TODAY.

Just days into her new role at StanChart, Ms Patwardhan — who was previously the bank’s group head of Risk Innovation — is all geared up to roll out a string of innovation-led strategies to take the bank to the next level. “I am focusing on the use of emerging technologies and data science and how we can process this data for actionable insight. After all, data are the new natural resource to be mined with more and more smartphones … In many parts of the world, I have seen people with more access to smartphones than drinking water or electricity,” Ms Patwardhan, told TODAY.

To build on its digital progress, StanChart is looking at setting up an analytics partnership with A*Star for data science projects.

“We are going to do a partnership with them to work on very specific data science projects that require a level of expertise that banks usually don’t have,” she said, pointing out that data science is being increasingly used for financial crime and cybercrime analytics and that going ahead, collaborations between banks and security agencies such as Interpol will increase.

Meanwhile, according to industry experts, banks are also increasingly embedding innovation hubs within their systems to brace for the new crop of Fintech companies such as Bitcoins and other cryptocurrencies that have caught banks off-guard, leaving their traditional business model disrupted.

“We are analysing what bitcoins and crypto-currencies mean for us. We are watching the space, but what looks important to us is the underlying blockchain technology. We engaged in discussions with Infocom Development Authority (IDA) of Singapore and quickly zeroed in on using this technology in trade finance — an area of common interest for the Republic and us as a bank. This is also different from what others are doing with blockchain technology,” she said referring to several companies using it in financial services space including settlements, derivatives and foreign-exchange.

Rapidly eating into the banking sector’s domain too are also newer financial services such as social and peer-to-peer (P2P) payments and crowdfunding. According to a Goldman Sachs Global Investment Research report, banks in the United States earned about US$150 billion (S$203 billion) last year. They estimate that about US$11 billion, or 7 per cent of annual profit, could be at risk from non-bank disintermediation such as P2P and other shadow banking companies over the next five years.

“The biggest business model innovation in banking to my mind is P2P lending,” she added. “Though it hasn’t really reached Asia in a big way, it is relatively big in China. We are actively monitoring it … It is interesting to note the increasing number of competitive collaboration between banks and P2P companies,” she noted.

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