New technologies allow faster scale on thinner margins this spells trouble for banks that are unable to make the digital switch fast enough, said Venky Srinivasan, a vice president at Oracle Financial Services, in an interview with finews.asia.
Venky Srinivasan, artificial intelligence is making inroads into banking. Isn’t this a threat to jobs in the financial services industry?
Rather than being a threat to jobs, artificial intelligence (AI) and machine learning can actually create value in the customer relationship by offering relevant products via chatbots and ‘next best offer’. I see AI bringing fresh insight into customer behavior as it helps with delivering a superior customer experience and better pricing for loyal customers.
Financial crime, AI and machine learning algorithms can help leapfrog a lot of compliance processing by automating highly manual and time-consuming processes. In a labor-intensive yet talent-starved industry, this means freeing up resources for more customer-facing and innovation-driven roles. The use of AI can help optimize resource utilization rather than lead to job losses.
Is Oracle establishing an innovation lab in the region, and are you working with fintech start-ups?
We onboarded leading fintech capabilities on our open banking and digital experience platform as well as curated fintech and banking APIs in our API marketplace to help financial institutions reach the market quickly and generate revenue faster.
These capabilities are now gaining ground in Singapore, one of the most important fintech hubs globally. The Oracle Startup Cloud Accelerator has been established in Singapore and was part of this year’s Innovation Lab Crawl in conjunction with the 2017 Singapore Fintech Festival.
«The digital switch in Asia spells trouble for banks that are unable to adapt»
In addition, two of the top 20 of the Global Fintech Haccelerator – ERNIT, the world's first smart piggy bank that empowers children to manage money, and SnapCheck's digital checking platform – are using our open API platform and Oracle digital banking experience APIs to build market-ready solutions for the financial industry.
Which countries in Asia do you see benefiting most from the technology leap?
Open banking, fintech and APIs will trigger a «digital switch» in Asia, toward omnipresent service. New technologies support faster scale on thinner margins. These trends spell trouble for banks that are unable to make the digital switch fast enough.
The fastest growing financial services organizations in Asia are non-banks. Fintechs and financial data collectors are quickly adopting the latest in analytics, artificial intelligence, robo-advisory to solve front-end customer problems. These include Mint, PayTM in India, Kakao in South Korea. Technology giants like Tencent and Ant Financial in China are vying to provide payments, lending and other financial services.
«Digital and technology adoption continues to thrive in Singapore»
In countries such as Indonesia and Singapore, new business models emerge around peer-to-peer lending and payments, and the needs of overseas workers or small businesses. To be successful, one will need to leverage the potential gaps of under-served market segments and redesign engagement models with banks and financial services.
In Singapore, initiatives led by the Monetary Authority of Singapore (MAS) make the city-state a global fintech hub, leading to new bank offerings such as PayNow. Digital and technology adoption continues to thrive in Singapore. In a global consumer survey soon to be released by Oracle, 70 percent of locals are using at least one digital product to perform banking services. Among 16 to 36-year-old citizens, the figure reaches 75 percent. Singapore also ranks number one for usage of online banking.
With a savvy customer base, my view is that banks need to differentiate, customizing offers via digital channels, rather than provide undifferentiated services to a large mass of consumers.
Many private bankers believe their wealthiest clients want human relationships. Is there any part of the banking industry that technology cannot control?
In recent years, a new type of banker emerged, a specialist who uses technology to offer the best advice through data- and analytics-driven decisions.
«Trust ranks highest in terms of what people are looking for in a financial services provider»
Banks are still trusted highly so human interaction has a role to play, but this should be driven by data insights empowered by technology.
Trust still ranks highest in terms of what people are looking for in a financial services provider. Yet as private wealth customers are becoming more technologically advanced, more aware and better informed, trust can easily be retracted if one does not meet other criteria such as convenience and service experience.
Banks need to capitalize on technology as their customers expect the companies to use the data available to provide them with better returns, more convenience and a better service experience.
Does Oracle focus on one particular segment of financial services in the region?
We are active in enabling challenger banks or digital-only banks with new business models and are also empowering corporate banks to make the shift to digital-led transformation.
In the area of RegTech and finance transformation, we provide tools that enable banks to better manage their risk, data and regulatory compliance needs with the use of sophisticated data analytics, artificial intelligence and machine learning.
With insurers looking to reinvent their products and services for the new digital customer, we are helping to build the insurer of the future with our core processing platform for health insurance, life and annuities.
Venky Srinivasan is vice president, Asia Pacific and Japan, of the Financial Services Global Business unit at Oracle. He is responsible for sales of Oracle products that focus on banking, insurance, and capital markets in the region. He is looking back on a 15-year-career at Oracle and, previously, at i-flex solutions (acquired by Oracle in 2005).
