Featured Interview: Neal Cross, Chief Innovation Officer, DBS Bank

Published on September 6, 2018

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Neal Cross is a strong advocate for innovative thinking. As the Chief Innovation Officer of Singapore-headquartered DBS Bank, Neal Cross is driving the bank’s innovation agenda regionally. He is uniquely focused on turning the entire bank into an innovation group to enhance customer experience. With more than 20 years’ experience in technology, innovation and financial services, Neal Cross has helped DBS emerge as a digital leader in the banking sector. Under Neal Cross leadership, Euromoney magazine has recognised DBS as the World’s Best Digital Bank.

What are some elements that have underpinned the bank’s technology-driven transformation?

I wouldn’t say it’s a technology driven transformation. That’s just one part of the puzzle. I always say don’t digitise your bank, digitise your staff and they will digitise your bank. Banks also need to understand the customer and what the customer is trying to achieve in their life. No customer wakes up and says, ‘I need to do a payment’. They wake up and say, ‘I want to buy a mountain bike or I’m getting married soon and I need to buy an apartment’. Banks need to really tap into the customer journey. It’s also about bringing that start-up, innovation culture inside the organisation. Getting people to be more ambitious, connecting them up to ecosystem partners like FinTechs and other start-ups as well and then fundamentally changing how the bank delivers products and services in a more innovative manner. For us, our innovation strategy involves never inventing anything. The bank is comprised of 24,000 staff members and they all have an innovation role. And it’s our job as a group to make them successful. So that’s what a lot of companies forget with regards to digitisation. It’s about the staff and the way they operate.

Is culture important for banks seeking to digitally transform?

It’s about implementing a start-up mindset and getting them to understand design thinking, experimentation, prototyping and agile teams. Really though, for me, you need to give staff four things. One is as a leader, I give my staff protection, so they can go and experiment and try new things. Secondly, it’s freedom. This is where you have a day job where work needs to get done but in your free time you can invent your own programs and start new conversations with partners. You have the freedom to explore. Thirdly, it’s education. Providing staff with the tools of innovation. The final aspect, which is probably the most important, is inspiration. So, inspire the staff to do their careers best work. If you can inspire your people to do their careers best work, then you are unbeatable as a business.

Why are banks grappling with digitisation?

The problem isn’t that banks need to go digital. The real problem is that digital is coming to banks. This is a massive time of disruption. So, if your company’s strategy is to take your mobile banking platform and try to make it a little bit sexier and re-release it and say, ‘my digital strategy is done’, then you’re at the wrong end of digitisation. At the end of the day, Google, Alibaba and all the FinTechs are coming into finance. At DBS, our strategy is a lot more ambitious and involves going digital to the core. There is this term ‘digital lipstick’ and that’s what a lot of companies are doing. They are just putting digital lipstick on current products and services and believing the job is complete. So, while some companies are doing an amazing job, especially the banks in China, other banks are just putting lipstick on, while others are running the wrong way, and most aren’t focused on the culture piece. Banks are hierarchical, risk averse and don’t collaborate. In a way, that is the culture of most companies. So, changing that culture is the key to success I believe.

DBS has adopted customer-centric design thinking to guide its operations. How has technology played a role in this design thinking?

You shouldn’t confuse technology and innovation or design thinking. Technology is like the cement to building stuff. Where companies go wrong I feel is that they put too much focus on the technology first. However, design thinking is all about what problem you are solving and for whom? We do prototypes and experiments, such as playing card games with customers to discuss wealth. Innovation is solving problems in an elegant manner that’s successful. The important thing is understanding the problem. Technology is the sand and cement of what you are building. There are other things to consider as well, such as the business model, ecosystems and people. There are all these parts that make up a solution to solve a problem. And that’s why I don’t hire technology experts in my technology group. We want people who don’t jump to a technology answer straight away. Instead, we spend time understanding the customer and what the customer is trying to achieve and looking at how we can fulfil that.

What is DBS currently focusing on from a technology and innovation standpoint?

We are trying to solve business problems. At the end of last year, we launched the world’s largest banking API developer platform which has been widely successful. We are also going through an agile transformation across the business to get people to work in these cross-functional teams. We are also focused on improved alignment of technology and business which involves turning technology into platforms which is co-owned by business and tech. For me, it’s always about two levers. It’s ego and ambition. So, a person who has a big ego is usually successful but a company which has people inside it with ego and ambition can be detrimental. What you must do is drive ego down to more eco-system thinking, which involves being open to collaboration, learning new innovation methodologies and working with FinTechs and start-ups. So, driving ego down and then driving ambition up so we don’t benchmark ourselves against only the banks is important. Instead, we benchmark ourselves globally against many different areas, such as the tech and e-commerce giants.

AI, Big Data, cloud and blockchain are rapidly transforming the banking sector. What are your views on these disruptors?

It comes back again to focusing on the problem you want to solve and then working out what’s the best technology to solve that. It’s obvious that the big thing affecting finance from a technology standpoint is cloud. Regulators are now allowing more banks to use cloud and of course, it reduces the cost of operations. The smart banks are then reinvesting that saved capital into more innovation for their products. Blockchain, well, we are still waiting. It may be the year of blockchain. AI is having a massive impact. From chat robots to totally reinventing operations. Big Data, the term, I don’t think will be around much longer. It’s all essentially moving to AI. As a trend, Big Data will merge into AI and machine learning. It’s an exciting time to be in the banking sector and it’s all about solving problems in an elegant manner that’s successful.

These insights from Neal Cross are drawn from the Experteq Banking Industry Report 2018. Read the full report here.

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