next frontier of financial services

the next frontierOF FINANCIAL SERVICESLeading insights on Asia’s trends, disruptions and innovations

2 The Next Frontier of Financial Services

PublisherFST Media #02-07/08 20 Cross StreetChina Square CentralSingapore 048422

Contents4 19

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Executive Summary A Unified ApproachAn interview with David Gledhill, DBS Bank

In Pursuit of InnovationAn interview with Sushil Saluja, Accenture

Redefining the FutureAn interview with Venkat Krishnan, Edelweiss Tokio Life Insurance Company

Breaking the SilosAn interview with Maryan Broadbent, AIA

Choice and ControlAn interview with Aniruddha Paul, ING Vysya Bank

Finding the Direct RouteAn interview with Neil Gardner, AIG

Harnessing the CloudAn interview with Michael Foong Seng Yiew, Maybank Group

A Community in the CloudAn interview with Michael Leung, China Construction Bank (Asia)

Analytics in ActionAn interview with Laz Cotsios, Medibank Private

Measuring SuccessAn interview with Vikram Sud, Citi Asia Pacific

Evolution, not RevolutionAn interview with Andrew Pitcher, SAP

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Executive Summary

In this edition, senior executives – including CIOs, CTOs and CMOs – share their ideas and vision for the future, as they respond to an increasingly digitised world.

The banking and insurance industry across Asia Pacific is meeting the challenges posed by disruptive technology head on. Technological innovation is the cornerstone of most – if not all – business strategies.

The Next Frontier of Financial Services is a series of in-depth interviews with the region’s leaders in financial services and their partners.

Mobile banking strategies for smartphones and tablets lead the agenda for investment priorities. Yet the varied nature of potential customers throughout the region means original products for traditional phones without an internet connection are also being developed across the board.

Cloud is becoming more popular, however there are few signs that financial services organisations will venture into the public cloud domain – yet. A number of the region’s banks are keen to investigate community cloud networks, which offer innovative business-to-business (B2B) payment solutions among other options.

While the banking industry launches a myriad of new products to enhance the customer experience, there is also considerable activity at the back-end to ensure core systems can meet the new demands of these front-end innovations. Whether this amounts to a core banking transformation project, or a more targeted program, the clear driver is the customer.

The insurance industry – acknowledged as lagging banks in terms of technology – is spending considerable investment dollars on leap-frogging into the new digital reality. This includes a vast range of programs from reconfiguring data warehouses, revamping offices and branch networks, to revolutionising the sales channels on offer.

The insurance customer’s position appears to be shifting as organisations have started empowering them with more information, reflecting the current love affair with big data. There is no doubt big data is at the forefront of both banking and insurance senior executives’ minds. However, as one executive notes, it is something that should be approached with due forethought and care.

The Next Frontier of Financial Services 5

A financial services executive might be forgiven for finding the current pace of change in technology somewhat daunting. Yet, Sushil Saluja, Senior Managing Director of Financial Services at Accenture, says these times can only be viewed as exciting – particularly for those in the Asia Pacific, where a combination of factors promises considerable opportunities.

It is a matter of several forces coming together, explains Saluja. “But what is not as appreciated is the change in trade flows across the world with a clear movement towards the Asia Pacific region.“

According to Saluja, world trade is forecast to increase by a multiple of 2.5 times from 2010 to 2020, with 60 per cent of all growth in trade derived from Asia, says Saluja. “In a way, that is not surprising given the change in demographics.”

Looking forward, Saluja also sees a shift in the predominant source of innovation. “Over the last 100 years, innovation has come from many places but there has been a lot from the US. If you look forward the next 100 years, I think innovation will be developed much more in the Asia Pacific region.”

Saluja points to the number of graduates being produced in the region in science, technology, engineering and maths “About 3.5 million graduates are being produced in China per annum in those subjects compared with 0.5 million in the US. Given those numbers, and the increase in calibre, this means innovation is changing.” He views this shift as inevitable given the region’s requirements. “We are seeing innovation in multiple ways because the needs are changing so dramatically and quickly.”

Chasing the CustomerDespite such promise, the region faces a number of challenges, acknowledges Saluja. But he frames these more as opportunities than obstacles.

“We see institutions with a heavy focus on transforming their domestic operations to service their customers better and to evolve to meet future needs – whether that is better wealth management, better access to day-to-day banking, or be that bringing even more people into the banking system.”

There is also considerable focus on regional and global expansion as organisations seek to serve their corporate

Sushil Saluja is responsible for setting the financial services group’s overall vision and strategy and guiding the development of client relationships. Saluja joined Accenture in 1988 and has held senior positions in its financial services division in the UK, Ireland and India.

AN INTERvIEw wITHSushil Saluja Senior Managing Director, Financial Services, Asia Pacific, Accenture

In Pursuit of InnovationAs a leading provider of management consulting, technology and outsourcing services, Accenture has been afforded first-hand insight into the world's most successful financial services organisations.

We are seeing innovation in multiple ways because the needs are changing so dramatically and quickly.


Asia Pacific is pioneering some of the more innovative solutions.

customers who are chasing trade flows. “You see many examples of banks in Australia and the ASEAN region, and even in Japan, looking to extend their reach across the region. On the other hand, you see global institutions wishing to be more prolific in Asia.”

Says Saluja: “What is common across all of these is the quest for growth and growth in support of customer needs is a huge imperative.” He says speed is of the essence right now, as is scale. “Scale stands as an opportunity – and impediment in some ways to speed. Look at the volumes of customers some banks in China have. I think that is a huge opportunity but also a challenge in terms of the pace you can effect change.”

Saluja believes technology sits at the heart of any changes in financial services. “Technology has a pivotal role to play in meeting customer needs, which is key in financial services. Our most successful clients are using technology to differentiate themselves in the way they meet customer needs. That is not just through point solutions but through the integration of the full customer experience – providing multi-channel access for retail customers and faster and more holistic processing for their corporate customers.

Of course, it is not all driven by the customer, notes Saluja. “Internally banks need to run themselves more effectively and the answers to that is greater operational efficiency.” And underlying all of this is the issue of risk and regulatory compliance. “That’s a recurring theme in the industry and again technology is being used to address some of the needs here.”

Saluja points to the many examples of creative concepts in the region. “Asia Pacific is pioneering some of the more innovative solutions.” Malaysia’s Easy by RHB is of particular note. Boasting a network of 400 branches, Easy was set up by RHB Bank but branded separately. “Easy offers customers numerous small-sized branches, typically in shopping malls and subway stations, that are

Malaysia’s Easy by RHB is cited by Sushil Saluja as an example of innovation where Asia Pacific is leading the world.


Learning to ListenSocial media has also been met with some caution but it is making significant inroads, says Saluja. “There is no doubt financial institutions are adapting to social media. I would say there is more to be done to really embrace it, but most institutions are getting better at listening to the dialogue that is going on. Increasingly institutions are becoming more active and engaging with their customers via social media.”

Saluja says the next step involves social media being a key part of the transaction process. This still requires a big shift in mindset for banks and insurers. “That is where further development is to be done and we will see more changes going forward.”

That said, the issue of reputational damage is becoming less of an issue. “Financial institutions are learning about balancing the different components that make up reputational damage. They are learning to embrace listening.”

In the meantime, institutions need to get their head around the next big thing, says Saluja. “It is all about digital – real time, anywhere, any time. It is a good way of encapsulating how people are leading their lives.”

the main challenge is institutions working out how to embrace it. But we are getting there; we are getting there quite quickly.

very heavily reliant on technology in the branch. They are very efficient way for customers to meet their needs.”

Then there is Citibank Singapore’s Citi Express – ATMs that meet nearly all its customers’ banking needs without having to visit a branch. The ATMs include a two-way video which allows for conferencing between the customer and the bank.

Saluja says this is an exciting development for the region’s rural communities, such as the Western provinces of China, where there are large numbers of people with lower per capita incomes who are less well served by the banking industry.

“For Singapore, it is about improving the customer’s banking experience. But if you transfer that technology to these rural communities, you suddenly transform that community with strong access to financial services. It is very exciting.”

A Learning CurveThe much-touted cloud solutions continue to gain traction in the Asia Pacific region, although concerns around security remain for now. “There are still some open questions about security and private cloud versus public cloud.”

Nonetheless, Saluja is upbeat. “Every client wants to have a conversation about cloud. There is a much better understanding of its benefits and how it might be used in an organisation. The main challenge is institutions working out how to embrace it. But we are getting there; we are getting there quite quickly.”

The mature markets want the benefits of cloud without removing their legacy systems, explains Saluja. This stands in contrast to the emerging markets which generally want to use cloud as an innovator, “to be more nimble and to do things more cost effectively.”

Saluja points to an Accenture client who was keen to exploit cloud for the benefit of its human resources division. As a financial services group with a regional footprint in the Asia Pacific, it was juggling the Human Resources (HR) needs of 10,000 staff across 10 countries. “They wanted access to core HR processes to be made much more readily available to employees,” explains Saluja.

Accenture designed a system which allowed the group to move its HR processing to a user cloud-based solution and rationalised everything it did across the 10 countries to a more standardised approach. “Within one year all 10 countries were using a redesigned and standardised solution for HR processes.”

The gains were felt at a number of levels, says Saluja. “The benefits were around employees being able to understand and get stuff done more effectively. They could access cloud solutions directly.” The company also enjoyed cost savings. But Saluja views the rationalisation of processes as particularly significant. “That is where cloud can really help. It facilitates standardisation," says Saluja.

Singapore’s Citi Express ATMs meet nearly all customers’ banking needs without having to visit a branch.


When it comes to technology, the insurance industry is some way behind. Rather than playing catch up, it is a question of stepping back and thinking about how to leap-frog, says Group Chief Customer Officer of AIA Group, Maryan Broadbent.

“In Asia, and globally, the insurance industry has been slower to adopt technology in terms of its customer experience relative to other businesses. But it is going through huge changes.”

AIA is among those insurers keen to transform themselves. “We are doing the obvious things such as mobile solutions and e-commerce. We are updating our infrastructure to a mass servicing framework to enable customers to interact with us in the ways they expect to be able to these days,” says Broadbent.

“I am not sure that any of this is individually unique, but for insurance, the combination of all of the changes is going to make it feel very different for the customer.”

AIA has spent the past year rebranding itself, putting the focus squarely on the provision of health and protection solutions. Explains Broadbent, “With an increasing focus on engaging in our customers’ lives, we are helping them to protect their families but also increasing our emphasis on supporting them to make the most of the future they and their family might have.”

Broadbent says AIA’s new focus stands as a huge change, “not to the core of the business but how we talk about our business and how we operate.” It goes some way to addressing one of the biggest challenges in the insurance industry. “We are typically a distribution-led business and in the past have tended to operate in silos. We have to find a way of bringing all aspects of our business together to centre them on the customer and the customer’s needs – to provide a more integrated solution that enables us to enhance the face-to-face experience, and to make our customers’ lives easier.”

Adds Broadbent, “The customer experience in insurance is a new conversation in recent years.”

vital StatisticsAn example of a technology-supported transformational initiative is the recent launch in Singapore of AIA Vitality – a science-backed wellness initiative that influences long-term behavioural change towards living healthier lives. Participants have access to a range of

Based in Hong Kong, Maryan Broadbent works across AIA’s 17 countries. Prior to her work at AIA Group she held senior leadership roles at the Royal Bank of Scotland, GE Money and Metlife.

AN INTERvIEw wITHMaryan BroadbentGroup Chief Customer Officer, AIA

Breaking the SilosAs the largest independent, publicly listed pan-Asian life insurance group, AIA prides itself on being ‘The Real Life Company’. Its new branding has made the most of technology to reshape its offerings to customers.

the customer experience in insurance is a new conversation in recent years.


assessments and health screens to help customers better understand their health condition, and to a network of partners offering products and services to reward the healthy behaviour of those taking part.

Broadbent sees it as a win-win for both sides. “While it motivates and rewards customers for monitoring and improving their health, it also provides us with an opportunity to increase customer engagement with AIA.” It does this by creating more customer touch points and providing information that will enables AIA to tailor its customer experience. “It also offers to build stronger relationships with our customers.”

Protecting PrivacyIt is generally accepted that big data presents a very real opportunity for the insurance industry. Broadbent is an advocate, but also believes that companies, including AIA, need to exercise care.

“The question is: how do we work out how to use the data to the mutual benefit of our customers, our distributors and ourselves?” says Broadbent. She highlights the importance of intuition in making the most of big data. “That despite being a really technical area, full of algorithms, huge data stores, and so forth, there is a significant human element too – there is a real need for interpretation, and a growing shortage in the skills needed to make the most of the potential that big data has to offer. It is the same with some of the technology.”

Broadbent points out that trust is fundamental to the insurance industry. “We are talking long-term products where we need to be there in moments of crisis or moments of opportunity for the customer. They need to trust us to be there.”

there is a real need for interpretation, and a growing shortage in the skills needed to make the most of... big data.

She says there are already signs that people are waking up to both the opportunities and threats of sharing personal data. “There are some interesting behaviours being talked about in the US. Some teenagers are de-activating every time they log off Facebook, while other people are loading up Snapchat photos that expire after 10 seconds. It shows an increasing consumer consciousness of the data trail they are leaving.”

However, at the same time, says Broadbent, other people are increasingly happy to share data – as long as the company is transparent about what it is going to use the data for. “It also needs to be clear to the consumer how they benefit from sharing, for example, through rewards or differentiated offers.”

Yet there are others who are still oblivious to such potential ramifications. “We need to protect these customers and our business by dealing with data responsibly and staying true to our brand aspiration

AIA vitality participants have access to a range of assessments and health screens to help customers better understand their health condition.


of being honest and authentic in engaging in our customers’ lives. We might never have the opportunity to harness big data if we have lost peoples’ trust.”

That said, Broadbent notes that Asia is in a relatively good position for now. While Europe’s corporates are talking about rebuilding trust, Asia is focused on keeping it. “In Asia we have not yet lost trust, but we have to make sure that we use data responsibly so that we are never in that situation. Once you break trust it is very difficult to get it back.”

Healthy PracticesBroadbent sees real opportunities for technological innovation in the area of health solutions. “Our involvement in Vitality and the increasing consumer focus on health is making us look at a lot of the health solutions technology.” She gives the example of radio frequency identity cards, which are being trialled by pregnant women in Chinese hospitals. The aim is to help better serve these women. “You can clock them in as they enter the car park and their bed is ready by the time they arrive to have the baby – a great example of using technology to improve the customer experience.”

Again, Broadbent warns against pursuing technological solutions just for the sake of it. “Technology has to be a means to an end not an end in itself.” Nevertheless, she adds, “It is not always about identifying a need and finding a technological solution. Sometimes we

We might never have the opportunity to harness big data if we have lost peoples’ trust.

are led by technology. The increasing availability of health-related apps is a good example – where you can scan moles to identify whether they are potentially cancerous, or use wearable technology such as Fitbits. I am thinking, what can we do with that? What can we do with a particular technology to make things better for our customers, employees or distributors?”

Grand DesignsBroadbent is also interested in the idea of design thinking and how it may benefit her industry. She points out that insurance is a mix of “fundamentally left brain management” – that is, analytical – and “essentially right brain agent” – in other words, more people-focused and creative. It is a matter of bringing these two different ways of seeing things together to allow for more holistic thinking. “Taking some of the analytics, some of the behavioural economics and wrapping them in right-brain creativity to design future experiences. That is going to be very powerful here.”

Future experiences include better communication. Broadbent points to a massive protection gap in insurance that needs to be narrowed. “People have anxieties in life; they have dreams and goals. They do not always understand that as an industry we have products and services to help them reach those goals. Many of our distributors are very skilled at explaining clearly and simply to the customer what our products can do to protect them and help them to meet their objectives. But we are not always easy to get in touch with.”

She says it is a matter of talking a lot more about benefits, customer propositions, not simply products. She also says it is a matter of listening to and understanding customers. That means taking unnecessary steps out of the process to make interaction easier. “It is a matter of using technology where it will make it easier for our customers and clients, our agents or our employees, to take the effort out so that we can focus on more value add for the customer,” says Broadbent.

The increasing availability of health-related apps leverage wearable technology such as Fitbits.


Life insurance is a growing business in Asia. So how do you attract customers if your business is limited to general insurance?

This is a very real challenge faced by American International Group (AIG) in the region due to the fact that in most markets the primary agency distribution channels are life insurance agents.

“That said, we are a key player in many markets in Asia and the largest general insurer in Singapore which demonstrates the value we provide the customer through our consumer products,” says AIG Chief Marketing Officer and Head of Direct, APAC, Neil Gardner. These products include auto, home, travel, accident and health insurance.

Furthermore, says Gardner, despite the strong influence of agents in the region, he has seen a change in consumers’ purchasing behaviour. “As the consumer and the market become more technologically advanced, we have witnessed an increased demand from the consumer to purchase products online. While many customers prefer to purchase their insurance products through an agent, companies simply cannot ignore that growing demand.”

Attitudes towards purchasing insurance products direct from insurance companies do vary from country to country, however, which is why it is crucial to understand each market and not roll out a blanket strategy, says Gardner. “For example, you have Vietnam where insurance is generally not part of the social fabric, compared to places like Korea where the industry is incredibly sophisticated.”

AIG pursues concurrent strategies. “If you want to be in every market in the region you need to segment the countries to have strategies that are relevant to groups of countries that may not be geographically close but are socially aligned,” says Gardner.

Getting TechnicalTechnology can offer solutions to these regional differences in attitudes towards insurance. AIG makes a point of providing simplified products that people can purchase efficiently and quickly by remote means.

“To be successful we need to have simple products that customers can understand but we also need to keep in mind that without the ability to recognise what

Neil Gardner has built up a wealth of experience in the region’s mature and developing markets, taking on lead roles in such organisations as GE Money in Australia and China and Citibank in Hong Kong and Singapore.

AN INTERvIEw wITHNeil GardnerChief Marketing Officer and Head of Direct, APAC, AIG

Finding the Direct RouteAmerican International Group, (AIG) is an international insurance company serving customers in more than 130 countries. It is pursuing a number of innovative strategies to help sell insurance directly to individual consumers in the region.

We have witnessed an increased demand from the consumer to purchase products online.


We welcome this new transition as it allows us to reach the customer without the labour intensive and expensive infrastructure required to operate in multiple markets.

Adds Gardner: “It is our strong relationships that we maintain with many life companies and agents in the region and unparalleled products that allow us to stay top of mind among agents in the crowded consumer product space.”

He says it is also important to note that some products are a better fit for online purchase portals than others. “Travel and auto insurance are already available through direct channels but have not reached the commoditised levels that can be seen in other parts of the world. For example, in China, car ownership is a luxury that is afforded by a small segment of the population and therefore usually sold through an agent.”

In response to the changing landscape, AIG has effectively started to make inroads away from the company’s traditional telemarketing business. Says Gardner: “We welcome this new transition as it allows us to reach the customer without the labour intensive and expensive infrastructure required to operate in multiple markets due to factors such as scale and multiple language requirements.”

Insider RewardsTechnology can only go so far in the external environment, says Gardner. Any engagement with

is happening in the environment and adapt to consumer trends as quickly as possible, an excellent product is not enough” says Gardner.

This works – to an extent. “We still find that if the product is sophisticated or people feel the need to understand the product more, they do tend to seek guidance from an agent – either our telephone-based agents or their insurance agent who could also be their life insurance agent.”


Getting the Timing RightAIG hopes to conclude all three projects within the space of two years. However, some nuances between AIG country life cycles have appeared. “Different countries are at different stages and it does not necessarily make sense to roll out the programs in the same order country-by-country,” says Gardner.

“In Vietnam you still need a wet signature on a piece of paper for insurance products. So how do you have an online strategy for personal accident insurance when you need to sign papers?”

Meanwhile, payment collection can be an obstacle in emerging markets because not everyone has a credit card. “We are taking a market-by-market approach, as we believe this is the best way to effectively serve the customer instead of launching the same mould in every market concurrently.”

Adds Gardner, “The organisation has many technology projects in flight. It is a matter of testing a concept in one market and then considering how it is that the solution can be effectively delivered across the board.”

Focusing on the FutureFor all the challenges, there is no lack of opportunity. In Hong Kong, for instance, AIG is looking at the segment of tourists arriving from mainland China.

“Seven million people live in Hong Kong, compared with 40-plus million visitors from the mainland each year. Clearly that is a much larger segment of the market to promote our travel products to,” says Gardner.

“We are looking at innovative solutions to tap into this segment.” Other cross-border travellers, such as Singaporeans travelling to Malaysia for the weekend, offer another unique market segment.

“Our focus now is on how we reach these potential customers and to enable them to transact.” The solution seems simple: “Of course mobile telephony provides you with a platform to reach these people.”

technology plays a very large part in driving efficiency internally, which is critical when you want to operate in multiple markets that have different language capabilities and scale.

the consumer is ultimately elective, social media being the perfect example. “You can build all the platforms, all the enablers you like, but in the less ‘exciting’ industries, including financial services, few customers want to engage with your brand socially unless they have a problem. In such industries, social media is commonly used as a portal for customers to express their dissatisfaction. The challenge is to keep the interaction and content appealing to the customer and relevant to the business.”

Where technology can make the real difference is improving internal efficiencies, says Gardner. “Technology plays a very large part in driving efficiency internally, which is critical when you want to operate in multiple markets that have different language capabilities and scale. Without a solid technology strategy you can spend an awful lot of money that ultimately may not be a good investment.”

That is where AIG is focused. “We have a significant quota of work underway at the moment internally,” confirms Gardner.

One project involves overhauling AIG’s entire customer relationship management (CRM) system. The aim is to ensure that whenever the customer returns to the organisation through any contact point – be it phone, internet or even old fashioned mail – the person serving that customer will be fully aware of their entire history.

AIG also has a data warehouse project underway, what Gardner describes as a customer information management solution. The organisation wants to be able to leverage both internal and external data, says Gardner, and to provide more campaign execution control and authority to the marketing and campaign teams in each country.

This involves integrating many different aspects including data segmentation of customers, workflow management and campaign successes. “At the moment it is a very labour intensive process to reconcile marketing campaigns and we are committed to fixing this.”

Yet another project involves re-energising AIG’s policy administration platform – the software that holds all the account and policy information. “We are moving to a single source platform across the region,” says Gardner. This will assist in AIG’s bid to provide simplified products and assist with providing economies of scale to smaller countries.

“Our new platform will allow customers to pick and choose in terms of how they want their products to be structured. So even though this can appear complicated, it is flexible from the customers’ point of view because they can say what kind of coverage they want and AIG can quickly package it together.”


Michael Leung has worked for almost 14 years at China Construction Bank (Asia), formerly Bank of America (Asia). He is also the President of the Hong Kong Computer Society and an Executive Committee member of the Hong Kong Institute of Bankers.

AN INTERvIEw wITHMichael LeungDeputy Chief Executive and Chief Information Officer, China Construction Bank (Asia), President of the Hong Kong Computer Society

A Community in the CloudFinancial institutions in Hong Kong are keen to pursue communal bank solutions, including mobile payments. That does not stop them from bolstering their own technological capabilities with the promise of of big data and advanced analytics.

It is true that competition remains fierce among the world’s financial institutions – particularly when it comes to leveraging the latest technology. But it is not all about rivalry, says Michael Leung, Deputy Chief Executive and Chief Information Officer of China Construction Bank (Asia). Solutions that use such innovations as cloud computing and Near Field Communication (NFC) have presented banks with an opportunity to build solutions together.

“Hong Kong’s banks are themselves working on a number of projects,” points out Leung, who is also President of the Hong Kong Computer Society and sits on the board of the Hong Kong Institute of Bankers.

One example is e-cheques. A digital equivalent of the paper cheque, it allows A to ‘issue’ a cheque to B just like the traditional paper-based cheques but electronically via the internet – whether that is a fixed or mobile device. It can make use of a community cloud network that is exclusive to the banking industry.

“Interestingly, this industry-wide project is sanctioned by the Hong Kong Monetary Authority, which is the banking regulator of Hong Kong. It is now in the early inception stage,” says Leung. Another example is mobile payments using the in-built processor, secure memory and NFC functions of a smartphone. Akin to an electronic wallet in a smartphone, it works as a contactless credit, debit or stored-value card like the Octopus Card in Hong Kong, providing payments solutions business-to-business (B2B), business-to-consumer (B2C) and peer-to-peer (P2P).

Leung says that while a few banks have gone ahead to do their own mobile payment solutions, several other banks are now working with Jetco, the ATM network operator in Hong Kong, “hopefully to come up with an industry-wide deployment solution and plan.”

Once again, the Hong Kong Money Authority seems to be keen to see this happen, says Leung, and to this end hosted a consulting session in November 2013.

Leung admits there is still some way to go however. “It can go a lot further. In Hong Kong we are seeing only the beginning of the development of mobile payment systems using smartphones.”

Customers also have to catch up. Despite impressive take-up rates of many of the banks’ new mobile apps, “many people still mainly use their mobile phones to talk and text,” says Leung.

We are seeing only the beginning of the development of mobile payment systems.


Keeping it PrivateSuch co-operation among the territory’s banks seems somewhat counter to the idea of ‘disruptive technology’. Then again, there is no doubt that an innovation such as cloud takes organisations well beyond their traditional comfort zone. Most banks remain cautious about stepping out beyond private cloud solutions and China Construction Bank (Asia) is no different, says Leung.

He believes that a raft of issues, including data security and service provider 'lock-in', will mean the public cloud domain remains off limits to banks for some time to come. “You probably will not see anything major happen there in the next couple of years.”

Harnessing big data and advanced analytics, however, does not seem to pose the same challenges. Leung confirms that like many other financial institutions, his team is working at developing its capabilities here, building on the data warehouse it constructed three years ago.

“We are putting the vertical applications on top of the horizontal data warehouse. We are making use of advanced performance analytic tools – what we call the management information or business intelligence tools like Cognos, OBIEE and SAS – to greatly improve our business performance and profitability analysis, as well as a whole heap of financial and risk management reporting and query functions.”

Says Leung: “It is a matter of making more sense of this information and extracting useful knowledge.”

He points out that big data is already being used to good effect. “It is just the beginning but we are already tapping into big data to check against money laundering and assess the credit worthiness of our customers.” It is also proving itself in the crime prevention space.

Following the RulesOf course technology is not all just fun and games. Like others, Leung feels the weight of all the regulatory requirements pressing down on the industry. “Unfortunately it is a really necessary evil. You just have to do it.”

Over the past months, the Hong Kong Money Authority has put a lot of emphasis on anti-money laundering (AML) due to a couple of recent transgressions. As a result, banks have been asked to strengthen their processes in this regard. “We are spending more time and effort on AML this year,” confirms Leung.

Other regulations big on the banks’ lists include the onerous Foreign Account Compliance Act (FACTA) – a United States’ regulation to prevent tax evasion through the use of foreign accounts – and Basel III. Both require considerable changes to the banks’ processes and systems. While Basel III might be less of a concern for Hong Kong banks given they are capital rich, quite a few would have little choice but to implement it if their partner or parent companies are in a jurisdiction that mandates it.

Liquidity management has also become an issue in Hong Kong, as has concentration risk. To a certain extent it is related to the fiscal policies in China. “We tend to lend more these days because China needs more funds,” explains Leung. “For some time many companies in the mainland could not secure foreign currencies domestically so they went abroad to borrow. Similar situations happened elsewhere, such as South Africa, from time to time.”

Leung says that regulators have become increasingly alarmed by the mismatch in funding requirements. It means yet another item on the banks’ lengthy “To Do” lists.

it is just the beginning but we are already tapping into big data to check against money laundering.


Boasting a 20-year international career, Vikram Sud became Citi’s Asia Pacific Head of Operations and Technology in 2011. Prior to joining the group, he held the position of Group Chief Operating Officer at Kotak Mahindra for five years, having held senior roles at Citi prior to that.

AN INTERvIEw wITHVikram SudHead of Operations and Technology, Asia Pacific, Citi, Asia Pacific

Measuring SuccessCiti’s Asia Pacific business spans 18 countries, making the most of its global capabilities to support locally tailored solutions. Technological innovations can be quickly rolled out across the region should they prove a game changer.

For Citi, there are three big trends which will continue to shape its business over the next 12 to 18 months: globalisation, urbanisation and digitisation. Ultimately, the international financial institution holds high hopes of become the leading digital bank globally.

“Our priorities have remained consistent,” says Citi’s Asia Pacific Head of Operations and Technology, Vikram Sud. “These guide our business as well as our operations and technology strategy. We develop innovative new projects and systems in partnership with our businesses to drive growth.”

Sud argues that it is a level playing field for corporates today, whether in technology or financial services or any other industry. “How innovative a company is and how quickly it can respond to the changing needs of clients is a prerequisite, not an option, to advance the business.”

He adds: “Financial institutions that start to behave like technology companies with banking licences will get ahead of others.”

Up Close and PersonalThere is no doubt Citi is keen to pursue original solutions. One of its highlights of recent times has been its new ATM, Citibank Express, launched in 2013.

One could argue that the revamp was somewhat overdue. As Sud points out, it represents the first major redesign of the ATM since Citi introduced unattended branches in the 1970s in the United States.

It was worth waiting for however. Taking up one-fiftieth of the space required by a typical retail branch, Citibank Express offers many new features compared with a traditional ATM. “It is about taking our Smart Banking to the next level,” says Sud. “It allows our customers to perform basically all the services available at a bank branch, providing greater convenience and accessibility.”

Over a phased release, clients can apply for loans, open accounts, post cheques, scan documents and instantly have their ATM, debit and credit cards issued. Inherent in this is the use of biometric identification.

One of its most engaging features perhaps is its video conferencing capabilities. “For a personal touch, customers can also see and speak with a CitiPhone officer via video conferencing at the machine.”

We develop innovative new projects and systems in partnership with our businesses to drive growth.


It is this ‘up close and personal’ aspect that helps make the new ATM a very real opportunity for Citi in the region and worldwide. “With more than 90 per cent of transactions in the region happening outside of branches, Citibank Express will expand our coverage across Asia, offering increased accessibility for our clients,” says Sud.

To date Citibank Express has been launched in Singapore, Malaysia and the Philippines. The next 12 months will see continuation of this momentum. “Over the next year, we are looking to roll out Citibank Express to in-branch and out-of-branch locations in the region before eventually deploying Citibank Express as a defining game-changer globally.” There is every sign that this lofty ambition will reach fruition.

Back in the LabCitibank Express was not an overnight wonder. It was the result of four years of research and prototyping in Citibank’s Consumer Innovation Lab in Changi Business Park, Singapore, says Sud. It also involved collaboration between the bank’s Asia team and Citi’s global innovation team, known as Citi Ventures.

As well Citi has another Innovation Lab focused on transactions services based in Changi Business Park, Singapore. In 2013, it was already pursuing more than 20 proprietary transactional banking solutions, with more than half a dozen being scheduled for launch within the next two years.

“At the heart of these impressive pilots is client engagement,” says Sud. “The fully-interactive and globally linked lab leverages new technologies to enable collaboration with both clients and global colleagues and allows for easy simulation of customised solutions.”

While the new ATM is already viewed as a success, Citibank Express is still in its early days, making it difficult to quantify its merits at this stage. However, even now the bank is working on fine-tuning the system based on the figures so far.

“While it is too soon to fully measure its success, we have gathered useful and crucial analytics since

With more than 90 per cent of transactions in the region happening outside of branches, Citibank express will expand our coverage across Asia.


the launch in terms of client usage, preferences and what they are looking for from Citibank Express,” says Sud. “Simultaneously, we are already working on incorporating more enhancements to Citibank Express, including greater customisation. Being able to capture a client’s unique financial transactions will further enhance the appeal of Citibank Express as an alternative banking channel for our customers.”

Project CentralIt is not the only project to have consumed Sud’s attention. The Citi team has also made significant headway in the tablet and mobile banking space over the past 12 months. This fits in with Citi’s stated aim of dominating the digital space in financial services.

“Mobile banking gives us greater flexibility to serve our clients where and when they need us and it plays an important role in our aim to be the world’s leading digital bank.”

Recent achievements include the 2013 launch of Citibank for iPad in six markets across the region. The bank also introduced the ability to trade stocks and to apply for credit cards via Citi Mobile – its mobile banking app – in select markets. Says Sud: “As mobile banking continues to grow as a preferred banking channel, our aim is to work towards incorporating more functionality into the smartphone.”

But the bank is also keen to tap into markets that do not have the latest technology. In the Philippines, Citi has introduced its one-time pin (OTP) generator on Citi Mobile. This makes it possible for customers “to really bank on the go,” says Sud, even without access to an internet connection.

In Hong Kong, meanwhile, the bank has enhanced its mobile payment solutions capabilities with the launch of 3 Citi Wallet. The multi-purpose mobile wallet service includes transaction history and a location-based special offer service and search function.

In addition, the bank has continued to improve its mobile payments solutions for its corporate clients in the region. In China, Citi launched the first and only mobile collection facility in early 2013. In India, the bank introduced its Mobile Payment Solution and Mobile Collect for both its consumer and corporate client bases respectively.

However, the new projects do not stop there – some being considerably bigger than others. In October, 2013, Citi unveiled its new CitiDirect Banking Evolution (BESM) next-generation electronic banking platform for corporate and institutional clients. “This represents a multi-year investment,” says Sud.

“The solution goes beyond providing traditional transaction management services through desktops, laptops, smartphones and tablets.”

On the markets side, Citi has progressed to Velocity 2.0, which focuses on optimising trading performance, making gains in desktop efficiency and customisation. “One of the best FX platforms in the business, the enhanced Velocity platform continues to help us capture greater volumes, placing us ahead of our competitors.”

Mobile SolutionsThe pace of projects shows no sign of slowing in upcoming months. Citi aims to work on data analytics and customer authentication over the next year using new technologies, says Sud.

The bank is also keen to further pursue innovation in mobile technology. “We continue to focus on the mobile in both the personal and corporate space. The adoption rates and cost curves are very encouraging.” He adds: “Now that we have transformed our branches and ATM, watch out for more in the mobile space!”

Mobile banking gives us greater flexibility to serve our clients where and when they need us.


Described as an industry veteran, David Gledhill has spent more than 25 years in financial services, the majority in Asia. Prior to joining DBS in 2008, he held progressively senior positions with regional responsibilities in JP Morgan. He last held the position of Head of Investment Bank Operations, Asia at JP Morgan.

AN INTERvIEw wITHDavid GledhillHead of Group Technology and Operations, DBS Bank

A Unified ApproachSingapore’s DBS Bank is a leader in the region. Not content to dominate its home market, the bank has been pursuing strong growth in recent years, supported by a number of critical technology upgrades.

Where we have been the most successful, the Ceo was driving all business priorities that needed to get done.

Ripping out and replacing your entire core banking system might sound dramatic. It is. Indeed, for DBS Bank, replacing its legacy systems became all consuming in its key countries of Singapore and Hong Kong. It got in the way of the bank’s overriding priorities which were to shore up its foremost markets and to pursue growth in the region, says DBS' Head of Group Technology and Operations David Gledhill.

Gledhill joined DBS at the end of 2008, just before the bank reconsidered its original program to overhaul all its legacy systems. Under Chief Executive Piyush Gupta, who took the helm in 2009, the bank had identified a number of priorities. As well as extending its reach, it aimed to become a customer-centric and staff-friendly organisation while building its capabilities in SME banking, wealth management, global transaction services and treasury.

This called for business-led technology solutions, says Gledhill. “You need very clear business sponsorship and ownership. Where we have been the most successful, the CEO was driving all business priorities that needed to get done.” He adds: “Otherwise they become a technology project.”

Gupta wanted the bank to be more flexible in its response to the market and its technology needed to do the same. “Core banking is all or nothing,” says Gledhill. “The bank decided it was more sensible to do smaller, bite-sized chunks, product by-product, rather than a rip out and replace.”

It allowed DBS to choose where it was going on a case-by-case basis, breaking things down into easily solvable pieces. It also helped the bank to stay true to its business objectives by reframing the issues at hand.

“For example, internet banking is pretty core but it is not traditionally bundled as core banking. Where does it start and end? We tried to stop thinking about it as a catch-all phrase.”

DBS’ payment system also did not fit a neat paradigm. “Some say it is core banking,” says Gledhill, “some say not. But the fact was we needed to replace it completely with a new payment engine.”

Emerging StandardsThis isn’t to say that DBS has ignored its legacy systems. One of the bank’s major projects in the past


few years has been the rolling out a new core banking platform in its emerging markets and overseas countries using Infosys’ Finacle. “In all of our growth market countries we completely replaced our core banking with an end-to-end solution. We decided not to cherry pick.”

The bank had little choice, says Gledhill. The 14 markets boasted a disparate set of legacy systems from different vendors, some systems facing end-of-life or end-of-support issues. On top of this there were decentralised hardware setups which resulted in unnecessary redundancies.

“There was a lack of standards everywhere,” adds Gledhill. “It was a big challenge to standardise them all.”

Completed by the end of 2011, the project took 20 months. The end result saw numerous benefits

including several new products on offer and an ability to handle high volume electronic payment requests from customers. The program also improved the bank’s risk management capabilities with better credit limit monitoring and an ability to handle tax deduction at source for pre-closed deposits.

The bank’s general ledger was standardised and a financial consolidator implemented. Productivity also enjoyed a boost with the automation of several manual processes.

Bite Sized ChunksIt was the main markets that proved the stumbling block when it came to replacing core systems. “Singapore and Hong Kong were hugely complex undertakings so we decided to simplify,” explains Gledhill.

Choosing smaller, more manageable projects instead has been no modest feat however. In Singapore, DBS has managed to reconfigure its loans and central liability for institutional banking clients.

The scope of the project comprised the full product life-cycle for servicing borrowing customers, from clients’ account opening experience to their credit assessment and facilities offering, all the while fulfilling DBS’s capital and regulatory reporting.

“It has been a massive amount of work cleaning up the credit structure,” says Gledhill. “But in the end it was a much, much better solution.”

We completely replaced our core banking with an end-to-end solution. We decided not to cherry pick.


The project has delivered clear results. All corporate client static information has been consolidated. This means all account information with credit facilities details has been moved from 10 legacy platforms to one. Meanwhile, all loans have been migrated from two current loan legacy systems to a single platform. This amounts to approximately 100,660 loans with a book value of about SGD 70 billion ($59.91 billion).”

In addition, the program has set up a standardised, single-touch process for maintenance of borrowing clients while there is now a single-customer identifier across all branches and group entities to improve on the group-wide consolidation of customer exposure. Capital reporting and Basel regulatory reporting have been streamlined as well, says Gledhill, down from two platforms to one.

While the metrics of the project are limited at this stage, tens of thousands of data records have been reviewed and cleaned up and about 800 duplicated fields eliminated. “Account creation and disbursement are 12 per cent and 23 per cent faster respectively.”

An Ideal SolutionThe launch of DBS’s customised proprietary online platform, IDEAL 3.0, marks another important achievement for its technology team. Replacing the bank’s ageing IDEAL Classic, it is described as a first of its kind – offering a single platform for corporate customers to manage their cash and trade finance transactions.

This means customers can use the one end-to-end platform to go from creating trade finance instruments, such as letters of credit and shipping guarantees, to payment settlements. It is made possible, says Gledhill, by using a service oriented architecture (SOA) framework with tight integration into the regional product processor.

IDEAL 3.0 also offers an integrated payments solution which supports seamless local and cross-border funds transfer – with more than 40 payment types – again using the common SOA framework. Another feature is its bulk file transfer module designed for a client’s transmission of a single file regardless of payment type or currency.

“The key measure of its success is the increase in adoption rate by our corporate customer base and its monthly transaction volumes,” says Gledhill. “We are currently acquiring 1,900 new customers a month, which is a record high in the history of IDEAL.”

Focusing on the Business Gledhill feels confident that ultimately DBS has chosen the better, more intuitive path. “There was religious fervour that core banking was a goal in itself,” says Gledhill. “We shifted from that perspective to digging deep into what were our real business priorities.” He says that while replacing your legacy systems might solve certain problems, it can detract from other issues.

Gledhill says it is a matter of knowing your business priorities. “You have to think why you are doing something. You always need to frame it as a business problem.”

Gledhill says how banks respond is critical in the current landscape. Where they put their investment dollars is key. “You need to get minds around the fact that things are changing rapidly and that you need to take some investment risk. If there is not that level of consciousness, you have problems.”

It does not mean banks know where things are heading necessarily. “One of the biggest challenges is working out what the end game will look like. That is where the fun is. One thing is certain, technology will cause major disruptions. At the moment we have built traditional banking on the go but we are working on what will be a new experience.” That will change in the next five to 10 years, says Gledhill.

Part of the challenge is to decide whether you will be a leader or a fast follower. For DBS, it is a matter of being both a leader and fast follower, says Gledhill, depending on the area. “We are making conscious decisions in that regard.”

one of the biggest challenges is working out what the end game will look like. that is where the fun is.


Sometimes it is a blessing to be the newcomer on the block. For India’s Edelweiss Tokio Life Insurance Company – just two and a half years young – it means creative new ideas can reign supreme, unfettered by the constraints of an ancient legacy system.

This has certainly been the experience for Chief Technology Officer Venkat Krishnan, who joined the life insurer in July 2013. “Old companies have the baggage of legacy systems to deal with. Any innovative ideas are limited as a result. It means they always have to think about the existing systems and work out how the two can complement each other.”

Krishnan says that being a young organisation allows Edelweiss Tokio to avoid such drawn out processes. “We can collapse those system constraints and as a result we do not have to take on a lot of risk by potentially compromising those controls.”

He says the relative youth of the insurer’s chief executive has also helped to spur innovation. CEO Deepak Mittal welcomes new ideas and drives any technology project from the top down, says Krishnan.

“We have a CEO who is young so it means we experiment with a lot of technology. It gives us the comfort to do things that are very different.”

Finding a New wayKrishnan has established a number of priorities as Edelweiss Tokio’s new CTO. Driving profitability through operational efficiency is one of them. “By that I mean trying to find bottlenecks that are there in the system, occupying most of our bandwidth from a business perspective. Driving operational efficiency will automatically give us benefits.”

Another priority is to redefine the distribution of financial products through the implementation of leading technology. “We want to redefine how we sell to the regions, how we can sell through various channels much more efficiently.”

A large part of this comes down to the human element. It is about trying to recognise and meet customers’ needs, at the same time as understanding what the agent does and needs. “This ties in well

Venkat Krishnan joined Edelweiss Tokio Life Insurance Company as Chief Technology Officer in July 2013, having spent 15 years in information technology in the areas of banking and insurance.

AN INTERvIEw wITHVenkat KrishnanChief Technology Officer, Edelweiss Tokio Life Insurance Company

Redefining the FutureIndia’s Edelweiss Tokio Life Insurance Company is a joint venture between Edelweiss Capital and Japan’s Tokio Marine. It aims to exploit its advantage of not having a restrictive legacy system to weigh it down.

We want to redefine how we sell to the regions, how we can sell through various channels much more efficiently.


with our organisational philosophy that understanding a customer’s needs first are far more important to us and only then do we offer any solutions,” says Krishnan.

“We are trying to understand the psychology of the customer; the psychology of all the actors in the system,” says Krishnan.

As part of the solution, Krishnan aims to improve efficiency and transparency through the digitisation of data, to ensure “what you see is what you get.”

He says having the right kind of data available is one of the big challenges of India’s insurance companies. “Effective data warehousing − where you can slice and dice data and send out the right kind of information, from the branch officials to the central office − is very important to us.”

Among other things, it will benefit the product team, he says, enabling it to analyse the various trends before creating a new product.

However, it does not stop there; one of his major projects in the next 12 to 18 months will be the end-to-end virtualisation of the entire data centre [See box: On the Job].

This will help to minimise the insurer’s “technology footprint,” says Krishnan, while at the same time building the resilience of the insurer’s infrastructure. “We are looking at making it much leaner in terms of set up while at the same time running more business applications.”

We want technology to make the process easy for the end customer, while also empowering our branch offices in the regions.

Growing PainsThe virtualised data centre will also help to address some of the issues around decentralisation of the insurer, as it expands into India’s many regions. Growing an organisation successfully without over-reaching can be a challenge. Edelweiss Tokio’s new CTO frames it as an opportunity, saying “we want to look at what can we do remotely – and much more efficiently.”

The aim, he says, is to ensure effective delivery to and from the branches while making certain that the integrity of the system remains intact. “We want technology to make the process easy for the end customer, while also empowering our branch offices in the regions.”

Enterprise Portal/Mobility

Platform

Intranet Portal

Customer Portal

Customer

Agency Portal

Service Agency Portal

Call Centre Executive

Third-Party Administrators

Internet

Internet

Internet

Internet

Employee

Partner/Agents/Bancassurance

Edelweiss Tokio manages its business ecosystem using Enterprise Portal/Mobility Platform, a technology-agnostic channel that enables better customer service delivery and consistency across all service partners.


Edelweiss Tokio Chief Technology Officer, Venkat Krishnan, has a number of projects to tackle of the next 12 to 18 months. Some of the largest are:

➜ Implementation of an effective enterprise portal and mobility strategy

➜ Re-engineering of business processes and building an enterprise content management platform

➜ End-to-end virtualisation of entire data centre

➜ Implementation of a highly secure Bring Your Own Device (BYOD) strategy

You can build a beautiful platform but at the end of the day, the key is that it should get used.

To this end, Krishnan will implement a mobility strategy, which at the same time simplifies the available technology with the aim of “enabling our people to handle more business in a more efficient manner and with fewer issues.”

In all this it is important that the central office fully supports the operations and underwriting in the branch offices, says Krishnan. “So if people get stuck with processing a particular product, they can invoke a foolproof mechanism whereby a centralised agent or help desk can help them to complete that process while still in the branch.”

This would include an effective logging mechanism to ensure nothing was compromised from a security perspective, says Krishnan.

“We will thereby be able to understand what person has given control to the central office.”

Going LiveKrishnan aims to improve communication between the end customer and the product specialist sitting in the central office through the use of video conferencing. “It means that if an agent or branch office gets stuck, they can invoke a video conference application right in front of the customer. The customer can ask a query and the central office can respond. It will be a much more effective communication medium.”

The benefits of video conferencing do not stop there. Krishnan points to its potential in effective underwriting as well. “People are well versed in telephone underwriting. We want to experiment with video-based underwriting using whatever kind of device a customer has," says Krishnan. The idea is that underwriters will gain a greater understanding of the customers, says Krishnan, which in turn will have a bearing on the policy premium, making it much more accurate.

Driving ChangeOne of the biggest hurdles can be the issue of whether employees will choose to embrace the new technology, says Krishnan. “You can build a beautiful platform but at the end of the day, the key is that it should get used.”

According to the CTO, he benefits from the fact that any technology project at Edelweiss Tokio is essentially a top-down initiative.

“The CEO is driving the entire project so it means we have the right kind of interest and the right kind of support for that technology. It ensures that any challenges regarding usage are minimised.”

It also helps that the financing of technology is about the bottom line rather than the top line, says Krishnan. “Our business strategy and IT strategy are driven by very basic parameters, which are operational efficiency and product knowledge. Always we are measuring our operational dashboards and our financial ratios to ensure that we know our bottom line. We want to improve that on a year-on-year basis.”

on the JoB BYOD is a key priority in 2014


Aniruddha Paul joined ING Vysya in 2007 as Head of IT change delivery. He was elevated to the position of CIO in July, 2013. Previous appointments include senior roles at Cerulean Infotech and Citibank, India.

AN INTERvIEw wITHAniruddha PaulChief Information Officer, ING Vysya Bank

Choice and ControlING vysya – a merger between India’s 80-year-old Vysya Bank and the Dutch ING Group – stands as the seventh largest private sector bank in India with a network of more than 1,000 outlets across India.

our it team's biggest achievement has been to build and commission a brand new data centre on schedule and migrate the contents of the old data centre with zero downtime to business operations.

ING Vysya Bank prides itself on being a financial services institution where “innovation and transformation are the way of life.” Certainly the Indian bank is proving its ability to keep abreast of the latest technology, launching its second generation mobile apps in July, 2013.

But sometimes it is about pulling off the more pedestrian of projects – carrying out transformations that revolutionise the bank’s back end, far from the public gaze. In this vein, Chief Information Officer Aniruddha Paul points to the replacement of his bank’s ancient data centre as a significant feat for his team.

“Our IT team’s biggest recent achievement has been to build and commission a brand new data centre on schedule and migrate the contents of the old data centre with zero downtime to business operations.”

What made the new data centre particularly challenging was the fact that it had to be done in the same physical pace that hosted the old data centre. “The team had to be extremely careful to ensure normal operations were not disrupted even in the slightest,” says Paul. “And all of this in the middle of one of the busiest IT change calendars in recent times in our bank.”

He says that such a project is critical if the bank is to continue pursuing business-led innovations. “In many ways, data centres are at the heart of IT. For the last half a decade, we have focused on what I call business IT – that is, IT enabling the business transformation agenda of the bank. This year, we have returned to core IT – re-examining our IT infrastructure stack, and the way we manage our application and infrastructure monitoring and deployment processes so that we can assure our business counterparts on IT capacity, reliability and availability aspects.”

There is no doubt ING Vysya desperately needed a new centre. “We were literally running out of room in the old data centre!” says Paul. “We have now ensured we have enough capacity to serve our business needs for the next seven years.”

However, there were other challenges to overcome, the physical design of the data centre included. This led Paul and his team to design their own server racks and wiring deployment systems rather than to buy off-the-shelf. Their gamble paid off. “Their custom designs have worked really well in packing in more server density without compromising on manageability,” says Paul.


Bells and whistlesThe revamp included significant investments in advanced tools to manage the data centre. “The new centre comes loaded with state-of-the-art technology in terms of physical security, infrastructure and application monitoring capability,” says Paul.

The bank also deployed a private cloud in the data centre for captive use. “We like the extent of scalability that cloud provides, but we draw the line at hybrid or public cloud.”

Paul sees cloud, along with social media and mobile solutions, as an inevitable part of the new landscape. “They represent disruptive IT and business models. It is quite likely that newer entrants will embrace these technologies by default and craft suitable go-to strategies for the marketplace, and it is important for established businesses to make informed decisions on their existing business models, or they will lose relevance.”

At the same time the bank has been keen to give its data architecture a bit of a makeover. “We have made some important incremental improvements to our data architecture in terms of shielding our online transaction processing (OLTP) systems from analytical overheads,” says Paul. It was achieved by building operational data stores for this purpose and leveraged largely for operational reporting.

The bank also made progress in implementing logical data models for regulatory reporting. “We are preparing ourselves for the next big steps in establishing domain specific data marts for analytical reporting and predictive analytics,” explains Paul.

Appy TimesOf course, from the outsider's perspective, it is all about the front-end. But ING Vysya has progressed here too with the launch of its second generation mobile apps in 2013. Currently available on the Apple iOS mobile platform, the apps will soon be extended to other platforms such as Android, BlackBerry and Windows Phone.

The new app allows customers to use their mobile devices to pay utility bills, transfer funds to other accounts, view mini-statements, request cheque books, stop payment of cheques, among a whole host of progressive features.

it is important for established businesses to make informed decisions on their existing business models, or they will lose relevance.


ING Vysya chose IBM Worklight to help develop and manage the cross-platform apps and, in fact, was its first client in India to go live with a publicly downloadable app. Says Paul: “We have leveraged the IBM Worklight platform to create intuitive, user-experience design led, rich client applications for our clients who have smartphones.”

The response has been encouraging. “Our customers seem to like what we have delivered. Our iPhone app, for example, has received a lot of positive feedback on the app store.”

Financial InclusionAt the same time, the bank has kept in mind its varied customer base. “At the other end of the spectrum, we have innovated with SMS-based banking, beyond the conventional informational aspects of obtaining alerts and balances.”

This means, for instance, that the bank’s customers can open and close fixed deposits simply by sending an SMS.

“We always keep in mind that our customer base has wide variety, and we must innovate at both ends of the spectrum to be relevant,” says Paul.

This view is in line with ING Vysya’s plans to reach out to new customers and to expand into new market segments.

That means finding ways into India’s remotest regions and meeting the needs of its significant base of unbanked poor.

Paul is keenly aware of the fact that half of India’s population remains outside the banking sector altogether. “At a societal level, the biggest challenge for banking in India is in becoming relevant to the 50 per cent of the population that is as yet unbanked.”

He says that even while banks roll out new products, platforms and channels for the already-banked – a prime target for new banks that are slated to enter the Indian market in 2014 – the focus must also be on technologies that bring the rest of the population into the financial arena.

This necessitates a multi-pronged approach, says Paul, which includes:■ Reducing the cost of customer acquisition through

employing user authentication tools e-KYC and Aadhaar for financial inclusion, along with data mining and analytics for crossing-selling and up-selling to the already banked.

■ Lowering the cost of the banking footprint using such technologies as virtual desktop infrastructure (VDI) and video conferencing.

■ Lowering cost of banking transactions through, for example, peer-to-peer money transfers and biometric authentication. These approaches aim to address the banking

challenges in India at the societal level. At the

enterprise level, says Paul, banks will have to invest in technologies that enhance security, lower risk and ensure 24/7 availability of banking services.

Back to BusinessFor Paul, the next 12 to 18 months are a time to refocus on the business opportunities. “We spent 2013 re-tooling IT to ensure that we are in good shape to deliver business priorities in the years ahead. I see us returning to ‘business IT’ in 2014 and beyond, in terms of channels, process automation and business analytics.”

i see us returning to ‘business it’ in 2014 and beyond. in terms of channels, process automation and business analytics.


Prior to taking charge of strategy and transformation at Malaysia’s Maybank Group, Michael Foong Seong Yew spent 17 years as Managing Director of Accenture’s Management Consulting division in Malaysia.

AN INTERvIEw wITHMichael Foong Seong YewChief Strategy and Transformation Officer, Maybank Group

Harnessing the CloudMaybank Group is Malaysia’s largest financial services institution, with plans to become an undisputed leader in the region. At the same time, the bank is rationalising its internal workings with a focus on straight-through processing.

Maybank Group’s projects are in the “highly confidential” sphere just now. But watch this space throughout 2014, says its Chief Strategy and Transformation Officer, Michael Foong Seong Yew.

Like others in the industry, Foong is only too aware of the obstacles facing the banking sector. “We are facing reduced net interest margins, increased operating costs and increased competition that narrows the margins we can charge our corporate and other customers. Those are the key challenges we have to address over these next two to three years.”

For Maybank, the solution is twofold and will underpin the bank’s strategy over the next few years. Firstly, says Foong, automation is critical. To this end, Maybank is considering a series of technology projects that focus on straight-through processing.

“Straight-through processing is something we want to implement not just within one country but on a regional basis,” says Foong. “And that means straight-through processing not only through new technologies, but through the centralisation of Maybank’s processing plants across the region. That is something we want to look at.”

But this will rely on the second part of the solution: process re-engineering. Foong says deconstructing the bank’s value chain and removing those parts that don’t add value is essential. “Obviously we are not going to automate processes that are inherently inefficient. We are looking at ways to slim down the processes before we start automating them. That will be enabled more by good old fashioned process reengineering and six sigma methodologies rather than just by technology.”

He says it makes good financial sense. “We will achieve the greatest bang for our buck when we invest in technology only after we reinvent our processing capabilities so that we can deliver our products and services in a much faster fashion – as well as enable greater responsiveness to customer queries and requests.”

Once things are slimmed down, Maybank will rely on technology to take it to the next level, says Foong.

Of course, this raises another issue for the region. Asia Pacific suffers from a scarcity of skills throughout the entire spectrum of technology project delivery. It is a problem that has existed these past five years and sees no sign of abating, says Foong. “You can talk about the

Straight-through processing is something we want to implement not just within one country but on a regional basis.


scarcity of skills in project management, in coding, in the ability to manage and direct large scale changes, as well as in technology architecture.”

Investing BigYet Maybank is as keen as other banks in the region to overcome such obstacles in its bid to pursue the current wave of opportunities in technology. Foong believes big data leads the pack. “I think in the future if you don’t have big data you will be at a severe competitive disadvantage in all lines of business, including investment banking but particularly in retail, insurance and asset management. If you don’t develop capabilities in big data and analytics I think you may lose competitively.”

Also squarely on Maybank’s radar are solutions which harness the likes of cloud, promising to dramatically reduce costs in infrastructure to deliver the same level of service. “You could call it a combination of cloud solutions, or just getting the right hardware platforms

plugged in to be able to pay on a variable basis rather than a fixed cost.”

Foong sees this as essential in the current environment. “If you don’t come to grips with that, you will continue to lose a lot of money on the table by having to invest large amounts up front.”

It also enables banks to be more agile in their solutions. “It means you get to market sooner. You can experiment, learn about a particular tool or solution, and then scale up. That is quite different to the old school years where you spent two years designing an industrial solution. You would wait for the end of the second year to launch it and by then the market might have changed.”

The Right PartnerTo this end, Maybank is looking at opportunities to team up with technology vendors. The new reality makes selecting a suitable partner ever more important. Foong says Maybank chooses its partners based on their approach to long-term relationships. “That is really important to us. Anyone that is transactional in nature is not that interesting to us as a partner.”

A vendor that can achieve results fast is high on the bank’s list too. “Quick proof of concept and quick generation of value is very important to us.”

There is also the need for a partner that can work with Maybank to quickly scale up once it creates a solution. Waiting for three years to launch a product simply is not attractive, says Foong.

“We do recognise that some solutions require time to bake but we are looking for opportunities to reduce that turnaround time.”

in the future if you don't have big data you will be at a severe competitive disadvantage.


Australian health insurer and solutions provider Medibank Private (Medibank) has many ideas about how to revolutionise the insurance space and technology plays a large part in all of them.

The primary aim for Group Executive of Private Health Insurance, Laz Cotsios, is to provide members with greater information so they can make more informed choices. “As a society we are data rich but information poor. One of the issues we suffer from as consumers is an asymmetry of information. It is skewed in favour of the health sector and not the consumer.”

To this end, Cotsios believes big data represents a huge opportunity for Medibank. Ultimately he envisions the overlaying of data from numerous sources to give members a more complete picture.

“As an organisation, we will become more relevant to our members as we provide a whole lot of information around health and well-being, allowing them to make more informed choices.”

Yet at this stage it remains on Cotsios’s wish list. “We are very much in the early days,” he acknowledges.

Nonetheless, his vision ties in with another recent initiative by Medibank: becoming a Coles Flybuys loyalty scheme partner in July 2013. As Coles is one of Australia’s largest retailers, this will give Medibank access to huge amounts of information about its members. Cotsios is the first to point out that there were other reasons for the arrangement though. “That was really a loyalty play for us. One of the biggest issues we have is recognition of loyalty.”

Under Australia’s Private Health Insurance Act, insurers are unable to offer no claim bonuses. “That means we are looking for other ways to recognise customer loyalty, including Increasing claim limits based on tenure, for example, dentists or optometrists.”

In addition, Medibank wants to encourage members to eat well in line with its health care mandate. Consequently, the insurer is giving members three FlyBuys points for every dollar spent on fruit and vegetables at Coles.

Insuring the FutureCotsios is also keen on mobile applications. “I think they are the way of the future.” He imagines today’s static policies becoming far more fluid. “I foresee with

Laz Cotsios has notched up many years experience in the energy and finance industries running and transforming large scale operations which included back office processing, call centres as well as IT ‘run and change the bank’. Prior to Medibank, he was Chief Operating Officer and Managing Director at UBS Wealth Management in Australia.

AN INTERvIEw wITHLaz CotsiosGroup Executive of Private Health InsuranceMedibank Private

Analytics in ActionMedibank Private is Australia’s largest provider of private health insurance and health solutions. In an industry beset by slim profit margins, the group is keen to embrace the latest technology to offer much more for considerably less.

As an organisation, we will become more relevant to our members as we provide a whole lot of information around health and well-being, allowing them to make more informed choices.


handheld devices that you should be able to dial up your policy – put a child on, take a child off; increase or lower your excess – so your policy becomes flexible.”

Also inevitable, says Cotsios, is cloud. He sees it as a huge opportunity for Medibank’s insurance arm to leverage. For now, everything is deployed in-house. “We operate a very slim margin business and the cost of technology is concerning. I don’t subscribe to the fact that we have to own everything and build everything. I think absolutely cloud is the way of the future – only paying for the services you use as opposed to building infrastructure that potentially becomes dated.”

That said, Medibank’s Health Solutions group has already adopted cloud, albeit in a limited form. At this stage all data is stored within Australia or on-site. [See box: Towards the Cloud]

It is a controversial issue, the overriding concern being privacy. “Privacy is always a concern and unfortunately health privacy is a major issue,” says Cotsios. However, he does not believe a solution is too far away. “We just need to make sure we can satisfy regulators that we have robust controls around information.”

Ultimately, he says, technology will be the big disruptor in health care. Until now, “technology has been seen to get in the way of healthcare”. He envisages a day, not too far away, when people don’t have to attend their doctors’ clinics for routine tests.

The Need for SpeedMoving more nimbly is vital in the current insurance environment, says Cotsios, forcing the group to up the ante in response to market pressures.

To this end, the insurer has released seven products in the last eight months, compared with three in the last three years. It is a significant difference but the group executive doesn’t see these pressures abating anytime soon.

“The market is changing and consumer needs are changing. We have seen increased competition in the market place so we need to respond in a more timely manner,” says Cotsios.

Cotsios also notes that price has become a major issue for a number of consumers. “We have had to respond to that challenge.” It is a big ask, given profit

Medibank’s Health Solutions group has already adopted cloud. At this stage all data is stored within Australia or on-site.


toWArdS the CloudMedibank’s Health Solutions group has already made the move to cloud – albeit in a limited capacity at this stage. The group has opted for solutions that enable in country or onsite data storage. “Due to data sovereignty requirements the use of standard cloud solutions is generally not something available to MHS,” says Medibank Chief Information Officer Brett Winn.

Yet there are still benefits to be had. “For application development, web hosting and other non-clinical systems the use of cloud services has expanded our ability to build and test software at a reduced cost base [compared to] hosting the equivalent systems internally.”

Not only does it save money, if offers ease of use and speedy deployment, says Winn. “Cloud technologies are very robust and highly configurable which enables complex business to undertake a range of activities using either public or private cloud services.”

We have an aging population. We have increasing medical technology costs and disease.

workplace”. That comes as something of a relief given it was one of Medibank’s concerns in setting up the activity-based work environment.

Indeed, the original plan had been to rotate different teams through the pilot program. However, the decision was made to hold off as it became clear employees found it too hard to revert to their old technology ways.

“Most people who are working in there cannot see themselves working in the old environment again. It is hard to take them out, take their technology away, and give them the old technology.”

Adds Cotsios: “The days of the old functional type of organisation are coming to an end.”

margins are wafer thin already and show no sign of improving any time soon.

“We have an aging population. We have increasing medical technology costs and disease,” points out Cotsios. This means that costs are escalating at a far greater rate than the insurance industry’s premiums putting considerable pressure on profit margins.

The insurer has also taken great strides to improve its product lifecycle by reinventing its workplace set up. In January 2013 it began an activity-based work pilot in preparation for the move into its new Melbourne-based building, slated for completion in August 2014. The results were particularly gratifying. The group saw its product build process time slashed from 49 weeks to a mere seven.

The idea of the group’s activity-based work place is to bring people together for a particular project so, as Cotsios explains, the subject experts are no longer on an entirely different floor from the IT.

“We found in building a product, 60 per cent of the time was messages sitting in email trails waiting for people to make a decision. By getting people in the same location, you get to the heart of issues extemely quickly,” says Cotsios.

Cotsios says management has witnessed improved staff engagement through the pilot. Meanwhile, “employees are excited now at the prospect of the new


For all the disruption wrought by the flood of new technology, some question the extent to which it has changed the fundamentals of financial services.

Yet to be delivered in many instances is significant and sustainable business transformation, according to Andrew Pitcher, Senior Vice President and General Manager of Financial Services, Asia Pacific, at SAP. “We have seen many organisations invest in new, innovative and lower cost technologies. However, in all but a few cases, the fundamental metrics of the organisation have not changed.”

Pitcher’s wish list for financial institutions is long. He believes further investment is required to deliver deep customer insight at the point of sale in real time – including pricing, risk and settlement. He also highlights the need for omni-channel business processes for customers and staff, straight-through processing, innovation in payments, flexible technologies that provide business control, substantially improved data management capabilities and innovative deployment methods that will significantly reduce the total cost of ownership of technology in the 'new financial services industry'.

That’s not to say the banking and insurance industries are sitting still – far from it, says Pitcher. He has observed considerable innovation in financial services in Asia Pacific over the last three years and points out that most of SAP’s customers have Chief Innovation Officers who operate across their businesses, not simply in technology.

“We see a lot of focus on innovation in customer experience, in payments, in the cloud – with business-to-business (B2B) solutions – and in the way social media is being leveraged.”

Adds Pitcher, “financial services organisations have finally started to work out how to bundle products for their customers and to price risk in a more dynamic and real-time way.”

Getting Comfortable with CloudPitcher believes cloud is making a significant impact on the region’s markets. “Cloud take-up is accelerating. Twelve months ago many countries said cloud was off limits, we now are seeing take up of cloud almost everywhere, as the need to reduce capital expenditure has dominated.”

Andrew Pitcher has spent 21 years in the financial services industry, the last 17 at management and technology consulting company Accenture. He joined SAP in July 2013, taking on the newly created role of General Manager of Financial Services, Asia Pacific.

AN INTERvIEw wITHAndrew PitcherSAP Senior Vice President and General Manager of Financial Services, Asia Pacific, SAP

Evolution, not RevolutionWith locations in more than 130 countries, SAP AG is a world leader in enterprise software and related services. In 2013, SAP expanded its reach to Asia Pacific and Japan, to introduce its innovative technologies for financial services.

Cloud take-up is accelerating ... as the need to reduce capital expenditure has dominated.


He warns that financial services institutions need to move quickly. “In some markets there is a lack of understanding of how cloud can reduce the total cost of ownership and improve speed-to-market. Those organisations who embrace the new deployment models will have a significant financial advantage. We would recommend a full assessment of the available opportunities and comprehensive consideration given to data security, supplier management and commercial models.”

The Benefits of InsightSocial media is also finding its place in the region’s financial sector, says Pitcher. “The majority of our

organisations who embrace the new deployment models will have a significant financial advantage.

He admits that there remains caution around customer and financial data in banking, capital markets and insurance. However, he points out that many non-customer facing and enterprise processes are being moved to the cloud, either within country or outside.

“For the most part, SAP customers are using cloud for customer relationship management, B2B exchanges of financial information, in enterprise resource planning and data management.”

Pitcher notes there are now many mature and flexible solutions available in all the sub-industries across financial services. These include SAP’s Ariba (Procurement) and Success Factors (HRM), both of which are established players across the banking, capital markets and insurance sectors in Australia, South East Asia and Japan.

Adds Pitcher: “Interestingly, our financial services network, which links corporates directly to their banks via the cloud to improve cash management, treasury and payments, is also gaining traction with our clients in the US, Japan, South East Asia and Australia. It could be a game changer.”

Pitcher views cloud as primarily reducing capital expenditure but agrees that there are significant benefits from business process standardisation and speed-to-market from off-premise solutions. “We have results in all markets from the movement to cloud.”

SAP’s in-memory capabilities (SAP HANA) will help banks not only process large volumes of data faster, but more importantly aid in turning that new capability into tangible value.


customers are hard at work in the implementation of their customer-centric strategies. As part of these strategies, financial services institutions are most interested in gaining insight about their customers to ensure they are best equipped to address their customers’ needs and concerns.”

Pitcher points to Ovum’s Business Trends Survey, which found that Asia Pacific banks, on a global basis, were the most advanced in use of social media, and were more focused on developing social media strategy then their global counterparts.

Social media for banks falls into three main areas, says Pitcher: awareness and marketing; products origination (in conjunction with other channels); and customer servicing. He says that converting this insight into tactical and strategic refinements of the sales and services strategy is critical.

“As an example, several of our clients in the region are changing their sales and service platform strategy and offerings to respond to direct customer feedback received on a sustained basis through social media. Allied to this is the desire of customers to be able to purchase new simple banking products via social media channels.”

Pitcher believes that reputational risk and social media are closely interlinked and cannot be ignored. “The winners will be those who use advanced analytics to intimately understand the sentiment of social media and those who then invest in driving increased customer advocacy, like some of our clients in South America.”

Customer advocacy describes the willingness of a customer to continue to use and openly support the financial services organisation in the marketplace. Says Pitcher, “Positive customer advocacy is normally only achievable following significant organisational investment and focus in customer understanding, customer-centricity, sales and service enhancements and, increasingly, loyalty and rewards programs.”

Real Time ProcessesSAP sees many opportunities in analysing big data and as a result has been busy creating solutions. “As it relates to big data, SAP’s in-memory capabilities (SAP HANA) will help banks not only process large volumes of data faster, but more importantly aid in turning that new capability into tangible value,” says Pitcher.

To get the most out of the big data, SAP offers predictive analytics solutions “to not look at how the world was, but how it will be,” says Pitcher. “The faster a bank can analyse data, the better the predictive value of it, and as a result we see the industry moving from batch to real-time processing.”

Pitcher believes that faster data processing and sophisticated analytics to achieve a 360-degree view of the customer will be crucial in developing true relationship-based pricing, and answering the question, “How do banks make money from data being held in their back systems right now?”

the winners will be those who use advanced analytics to intimately understand the sentiment of social media.

Transformations Run Deep Today’s technological innovations are not all about the customer experience. Pitcher notes that financial services organisation across the world are facing considerable challenges when it comes to addressing risk and regulatory compliance and reducing the costs and complexity within their business.

The business transformation that Pitcher sees among SAP’s most successful clients go well beyond point solutions. “These transformations are centred on the customer experience and straight-through processing but also operations efficiency and risk and compliance.”

It sounds like a lot to process. But there is no sign that it will slow down anytime soon. According to Pitcher, the next step is ‘real-time’ everything – customer information, leads, origination, underwriting, analytics, financial information, fraud detection, compliance, settlement.

Pitcher concludes: “Making all business processes real-time, using data management and analytical capabilities that are a step-change to what we see today, is the future. No question.“

SAP Asia Pte Ltd. (Regional SAP Headquarters) 30 Pasir Panjang Road

#03-32, Mapletree Business City Singapore 117440

Phone: +65 6664 6868 Fax: +65 6664 7000

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