Hu Yoshida

Digibank: Digital Transformation in Banking

Blog Post created by Hu Yoshida Employee on Jul 5, 2016

Banking convenience is usually measured by how many branches and ATMs are in your local area. Could it be possible to bank without any branches or ATM’s? 

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Digibank, powered by DBS, is an entire bank that is squeezed into a smartphone. You can sign up in 90 Seconds by downloading an App from Google play or Apple AppStore, without the need to go into a branch bank and sign paperwork. Digibank is a branchless bank. By downloading the App you get an electronic wallet with a virtual debit card, bill payments, funds transfers, budgeting, expense tracking, and powerful customer support which lets you set goals and draw out a plan to achieve them through artificial intelligence. Digibank’s digital offering stands out because of an inbuilt dynamic security system that takes away the need for one-time password authentication and a natural language interface that allows customers to use voice commands to transact. You can also set up a digiSavings account by completing your biometric authentication at any of their partner food and beverage stores. And with DigiSavings you get 7% interest from your first rupee, a zero minimum balance zero-maintenance account, with free unlimited ATM withdrawals at any ATM in India.

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Yes this is for rupees, as in India. Unfortunately, it is not available elsewhere. The reason is that India has Aadhaar, a 12-digit unique identification (UID) number for all the residents of India. This number is linked to the resident's basic demographic and biometric information such as photograph, ten fingerprints and two iris scans, which are stored in a centralized database. Authentication for Digibank and digiSavings is through the use of the Aadhaar and fingerprints.

 

DBS is the Development Bank of Singapore, and has branches and offices in 15 countries, including China and the United States. In India it only has 12 branches due to policy restrictions between India and Singapore. Digibank was a creative response to this restriction. Who needs branches in this new digital age?  While many other banks have talked about this, DBS has gone ahead and done it. Having UID and biometrics in India, was a key enabler.

 

The use of AI in their customer support center is also very innovative and is being implemented in other countries. The technology that DBS uses comes from Kasisto which provides KAI. KAI is a conversational AI platform with deep financial knowledge, which makes engaging with customers as natural as chatting. This is a robotic call center that replaces the need for thousands of call center operators. Unlike call center operations where turnover is high and staff need to be trained, KAI is self -learning, and gets smarter with each call. The Kasisto founders came from the same group that developed SIRI. This is a digital disruptor for call centers.

 

One of the drivers for digital transformation is serving the unmet needs of new markets. Piyush Gupta, chief executive officer at the bank is quoted as saying: “We are going to focus outside our affluent banking base and we hope to be a mass consumer banker through this product. We hope to get 5 million customers over the next 3-4 years through digibanking,” Currently, DBS Bank is estimated to have 35,000-45,000 customers in India.

 

Other large Indian banks such as State Bank of India, ICICI Bank Ltd, HDFC Bank Ltd and Bank of Baroda are building digital channels with an aim to garner new customers and serve existing ones better. HSBC bank has announced that they are reducing the number of their branches in India from 50 to 26 and focus their retail banking through digital channels. HSBC said that they would also focus on technology to better serve their premium customers as well..

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