Differentiating Transaction Banking, One Keystroke at a Time
When DBS Bank in Singapore looked at how to gain a
competitive advantage, as it set about developing a new internet banking
platform for its transaction banking business, it started with the customer. Tom
McCabe, the bank’s head of global transaction services, says that he leveraged
his prior experience in consumer goods to run focus groups, for example, and
have consulting firms run time and motion studies.
He also looked
at what chief financial officers (CFOs) and their teams strive to achieve.
“Every CFO has three areas of focus,” says McCabe. “The first is identifying the
right capital structure. The second is determining the appropriate amount of
risk. The third is driving as much free cash flow as possible from the
business.” He decided that the area in which DBS could provide the greatest
benefit would be in managing cash flow.
The challenge, though, was
that virtually every bank offers similar services for cash management and cash
visibility. “Our platform does things similar to the way other banks do,” admits
McCabe. “Nobody has a competitive advantage based on technology alone.”
Where DBS could differentiate and gain a competitive advantage, he decided,
was in focusing on the minute details of key processes: “How many keystrokes it
takes to issue a check, how can we take out 70% of the keystrokes. It becomes a
productivity tool,” says McCabe. “The fact that DBS had not invested in a
platform allowed us to leapfrog ahead of the competition. We map the data and
know what people use.”
Time saving and customisation
DBS then worked with ACI Worldwide to develop a system that would generate
significant productivity improvements for its customers. “By working with DBS,
we’ve learned how you can implement to defend market segments, where it is
relevant, to have that level of flexibility,” says ACI’s managing director for
Asia Pacific and Japan, Paul Henaghan. Adds McCabe; “The reason we picked them
is they have experience with some of the largest banks in the world. We benefit
from that thought leadership.”
The result is a new system that gives
its customers significant productivity improvements in the processes that McCabe
believes they use the most. “A typical company goes online about three time a
day for an hour and 45 minutes,” he says. “If the process reengineering
principles allow us to reduce 20% or 25%, you compress the time. We’re talking
about productivity as much as governance and controls. We can allow you to take
30 minutes out of a busy schedule, and when you multiply that by 10-12 users you
start talking about real savings.”
DBS also made sure it could offer
customers the ability to customise their system for each user, which McCabe says
is a capability few of its competitors share. “Our largest customer has two
hundred people accessing the system, creating payments, and managing balances.
The first screen each staff signs onto is customised to their preferences and
responsibilities.”
He adds that for many local SMEs, “we will be
their number one foreign bank, providing services across multiple countries. Our
banking platform allows that to happen. Previously, before our collaboration
with ACI, we couldn’t have done it as effectively or with the productivity we
can today.”
Mundane as it may seem, a productivity gain is exactly
what many treasury and cash management professionals at corporates found they
needed. Offering a tool to achieve that goal has enabled DBS to differentiate
itself well.