Neal Cross: software developer, hotel owner, orangutan conservationist, former Chief Innovation Officer at the Development Bank of Singapore (DBS) and co-founder of PictureWealth. We spoke with Neal on his remote Sumatran island about his vision for the future of banking and the role that culture plays in effecting lasting change.
Is the future of banking all about technology and digitalisation?
Tech and fintech companies may be disrupting the industry by making finance cheaper and easier to use, but at some point in most industries the old and new approaches tend to re-merge.
E-commerce is a prime example. At their outset, Amazon and other e-commerce companies heralded the end of physical stores. Now Amazon has bought back into bricks and mortar through its Whole Foods acquisition.
Fintech similarly was supposed to eradicate banks. Now, as they face up to the cost and difficulties of distribution and client origination and compliance, many are seeking to partner with traditional providers.
I don’t see digital and AI replacing humans. It will be some sort of hybrid future.
What should banks consider during their digital transformation journeys?
This is a great opportunity to realise why you’re in business, which is to solve customers’ problems. Can you solve those better following the transformation?
The easiest thing to get right is technology. It is incredibly simple today and gets easier every year. Obviously technology is important. But focus on the people first, because they will have to deliver the transformation.
Don’t digitise your bank. Digitise your staff and they will digitise the bank. But you have to give them a digital mindset.
What does it take to instil this digital mindset?
Change has to come from the top, from the CEO down, and from the bottom. Banks talk a lot about culture change, but I’ve rarely seen it happen. You can’t mandate change. You need people to aspire to it.
Part of the problem is banks are hierarchical. There are multiple levels and you do what your boss says. Tech companies have flat structures. You’re encouraged to think and challenge senior staff.
A willingness to experiment is also important. Tech companies experiment with small initiatives, fail, learn, move on. As a business, banks take risk and monetise it. But internally they’re resistant to experimenting, whether it’s changing the infrastructure or hiring different people.
Key to DBS’ digital programme success was to start outside our core Singapore market. We began in India and Indonesia where DBS didn’t have a big presence, which enabled us to be ambitious. We then took what we’d learnt into other markets.
How do you create that change mentality in staff?
Ultimately you want every employee to be inspired to do their career best work.
As a leader, I give my teams four things.
- Protection – Anything that happens in my team is always my fault. It allows people to experiment, as they know their leader will look after them.
- Freedom – I don’t buy your time. I’m buying your smarts and your execution.
- Education – How do you teach people non-traditional stuff so they will think differently? In my innovation group we did sales courses, advertising courses, we took them trekking in the jungle.
- Inspiration – Too often we limit ourselves. Our goal should be to make everything world class. Innovation is about finding the best way to do something and asking every day how we can do it better.
What does it take to create a world-class digitalised bank?
A combination of culture and technology.
Your greatest assets are your people. Create an environment that fosters a digital mindset in staff, with frameworks and new ways of working that give them the scope to deliver transformation, then turbocharge them with smart technologies that give you flexibility and scale.
But think carefully about how you move into the digital world. Digitise everything and you become a commodity. Customers like having someone to talk to about their concerns and dreams, which they can’t get from Google. So don’t throw away your physical assets without a lot of consideration.
How do you see the future of banking?
Finance should focus on improving customers’ lives, their financial literacy, helping them achieve their dreams and allay their fears.
Customers may be excited about buying a new house or starting a business, but the effort of approaching a bank and applying for a loan crushes that excitement. Banks collect so much information on our lives, so why isn’t the process more personal? Why do we have to fill out a long form and go through a credit check every time?
The future lies in solving customers’ problems in a better way, to maintain that level of joy by making banking quick and easy. I see that happening more in China, where a bank and fintech company are leading the way. So the race is still winnable for any party.