Han Kwee Juan, group executive and country head of DBS Singapore, explains how technology helps to create personalized experiences, added value and greater sustainability.
Global Finance: What benefits is AI bringing to DBS, and what are your predictions for the future of AI in banking?
Han Kwee Juan: Over the past few years, we have increased the use of AI across all parts of the bank, leading to significant improvements in customer experience, risk management and reducing toil for our employees.
The application of AI technology has enabled DBS to personalize client interactions, make better financial plans, and assist in working capital planning for small businesses. Our employees have benefited from its implementation, too, with early warning systems for system disruptions, engagement recommendations and demand management. AI has enhanced our risk and control processes through early credit warnings and better anti-money laundering and fraud-prevention mechanisms. These efforts are delivering economic benefits of $350 million Singapore dollars [approximately $260 million] in 2023, and in the next five years, we aspire to increase it to S$1 billion of benefits.
As we look toward the future, the dual impact of generative AI trained on large data sets and cheaper computing power will lead to banks delivering more personalized and relevant customer experiences. At the same time, integrating AI into work processes, ranging from coding to servicing, will increase efficiency and effectiveness across the industry.
GF: What is the secret to ecosystems that open embedded finance opportunities?
Kwee Juan: Collaboration, seamless journeys for embedded finance and unlocking mutual value with partners are key ingredients to successful digital ecosystems.
DBS brings the strength of its balance sheet, brand and digital capabilities, while partners bring extensive client networks and collection and distribution capabilities. Their alternative data sources augment our credit models. We can embed our banking services seamlessly within our partners’ customer journeys through ecosystem partnerships. In so doing, we generate new business opportunities while addressing their customers’ pain points.
Today, we work with nine ecosystem partners across the region. They include large and fast-growing fintechs in Indonesia like Kredivo, big tech giants in China like Ctrip, and entrenched finance companies in India like Bajaj. With JD Logistics in China, we provide supply chain financing solutions to merchants using their platform. We provide instant loan offerings to customers through our AI-driven lending models and data from the platform. The same data points provide us with real-time information on the customer’s ability to service the loan, enabling us to work with customers proactively to manage risks better.
These partnerships have delivered exponential growth for DBS. In 2022, customers acquired from digital ecosystems more than doubled year on year, contributing to 30% of total customers outside Singapore. Our new secured and unsecured assets from digital ecosystems grew 80% year on year, contributing to over 65% of total bookings outside Singapore.
GF: How is technology helping you promote sustainable solutions?
Kwee Juan: First, technology empowers our clients and ourselves to make better-informed decisions on sustainability—technology that enhances our ability to source, process and analyze vast amounts of complex data. At DBS, we have installed software and related devices such as IoT sensors that allow us to source and measure many sustainability-related inputs, such as electricity and water usage in our offices. As another example, in our corporate lending business, we started experimenting with AI and machine learning to analyze our clients’ public disclosures and quantify their Scope 3 emissions.
Second, technology enhances how we can deliver sustainable advisory and financing solutions to our clients. For our large corporate clients, we have developed an in-house analytical tool to help relationship managers assess each client’s greenhouse gas emissions and compare these to the client’s peers and the decarbonization targets we set in 2022 for our lending and financing activities.
Third, we launched DBS LiveBetter for our retail clients in 2021 as part of the bank’s efforts to encourage eco-conscious living among our five million customers. An industry first, the one-stop digital platform is accessible within every customer’s DBS digibank app, making it simple and easy for them to access an array of sustainability-centric educational resources and products and services that empower more sustainable habits. This includes sustainable financing, investment solutions and opportunities to offset carbon emissions.