An Interview with Leonardo Koesmanto, Executive Director & Head of Digital Banking, DBS Bank
"Banks and other fintech players continue to elevate solutions for current fraud and data theft threats and their provenance, online risks, privacy and security considerations, and explore controls to mitigate and manage the risks. Sometimes, or a lot of times the security breach is not coming from failure in the technology itself, but failure from the human factor..."
FST Media: What are your digital and business priorities for the next 6 months?
Koesmanto: At DBS, we foster a culture of innovation in an organization that has more than 22,000 employees. The key is to ensure that innovation is not just "owned" by a single unit or entity, but extended to the entire organization. We realize that seeing things from customers’ point of view is essential. Achieving greater efficiency and bringing better customer journey is now being part of the transformation. The big win is driving better innovation, as it leads to strategic advantage. This what also driven us in DBS Indonesia, we strive to innovate and collaborate to providing better customer journey through continuous innovation. One of the key priorities in the next coming months is to launch the mobile-only bank that does away with forms and is a "completely paperless, signature-less and branchless bank". This will be our dedication in bringing a more seamless, intelligent way to bank.
FST Media: What technology is proving to be the biggest game changer in the banking industry at the moment?
Koesmanto: From my point of view, technology will help banks to completely become paperless and will require no physical branches – technologies like biometrics, conversational artificial intelligence (AI) platform, and natural language recognition and processing to provide its services are going the biggest game-changer. We are embracing technologies that can make banking more interactive and intuitive for customers.
FST Media: What role does innovation play in the banking sector?
Koesmanto: Innovation plays a big part for us. Over the past three years, DBS has been deeply immersed in furthering its digital transformation agenda. This includes embarking on a comprehensive and holistic mission to changing the culture and mindset of staff, re-architecting the bank's technology infrastructure, and leveraging Big Data, biometrics and artificial intelligence to reimagine banking. For any enterprise, the heavy lifting of digital transformation is always the organizational change behind the scenes, and DBS is no different. We have setup a dedicated innovation group for this purpose – to help cultivate, influence, and champion DBS employee to become the bank’s game changer.
We don't just invent products or services. Instead, we analyze customer (internal and external) journeys – its strengths as well as challenges. This way, we can ensure that the solutions that are developed will actually be able to help the business and improves our customers' lives. For instance, a key initiative that the innovation group has introduced is the incorporation of hackathons to drive their staff's talent development programme. Another tangible outcome of DBS’ digital transformation journey includes the development of digibank product in India – this is a mobile-only bank that allows customers there to access bank services from their smartphones or tablets without having to visit a physical branch; which soon to be also introduced in Indonesia as we continue to adopt digital culture as our journey ahead.
FST Media: What are the key challenges bank faces in developing resilience technology against fintech disruptors?
Koesmanto: I think the key challenges for the bank is how the bank can evolve and improve its business processes to be more agile to compete (in a positive way) with the speed of the fintech disruptors. As we are embracing technologies that can make banking more interactive and intuitive for customers, so we consider fintech is merely as potential partner instead of being a threat. Together we can collaborate to improve the way we serve our customers.
FST Media: Where will digital banking be this time next year?
Koesmanto: 2018 will be an exciting period where all of us will see many developments made, particularly because several banks will launch their digital banking initiatives. We will see a couple of developments in the area of biometric verification, the use of artificial intelligence, alternative payment solutions, algorithmic lending, etc.
We see this as part of the transformation on how Indonesian society is going to adopt digital culture in deeper level. For many organizations undergoing digital transformation, the technology is front and center. But for us in DBS, the better the technology, the less visible it becomes. To make banking joyful and create great user experience, make the banking part less visible. We strive to make people live more, bank less.
FST Media: What are the main Cybersecurity risk facing digital banking at the moment?
Koesmanto: One of the bank's main value is about security. Banks are challenged to make efficient, seamless, convenient for the customers, yet ensuring security. This presents a big challenge in keeping abreast with the latest security technology. However, more importantly is the education about online-security. As internet and mobile device use continues to grow and become more widespread in this digital banking era, banks are looking up for more ways to leverage off them Cybercrime and online banking fraud is still going to be a threat for financial institutions, retailers, and consumers. Banks and other fintech players continue to elevate solutions for current fraud and data theft threats and their provenance, online risks, privacy and security considerations, and explore controls to mitigate and manage the risks. Sometimes, or a lot of times the security breach is not coming from failure in the technology itself, but failure from the human factor.
FST Media: What does it mean for a bank to stay "agile" with its digital initiatives?
Koesmanto: It means that the bank should continuously going through innovation process and provide the best customer journeys. This needs to be formally led by an organization within the bank to ensure realization. As I mentioned earlier, in DBS we do have an Innovation Labs that continuously create innovation driven programs by working with both internal "innovation council" and external parties such as universities, and startups.
FST Media: Where do you look for emerging technology trends?
Koesmanto: I read latest news on technology, following podcasts, attending seminars and also visiting some of the center of technology and innovation like Silicon Valley.
FST Media: What is the next big thing for DBS and how will you measure its success?
Koesmanto: Our next big thing is combining the digital banking that we are launching soon with the new business that we just acquired. As already announced publicly, we are acquiring the retail banking portfolio of a major regional bank. The doubling in business size and the new business, combined with digitalization is going to be an exciting challenge for all of us within DBS. We are leveraging Big Data, biometrics and artificial intelligence to reimagine banking.
FST Media: What do you enjoy doing outside of work?
Koesmanto: Watching my kids grow, and casually enjoying photography.