DBS’s next logitech step in fintech is AI

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SINGAPORE (Nov 14): DBS Group Holdings on Monday officially opened DBS Asia X, a 16,000 sf innovation space at Sandcrawler Building in Fusionpolis that features co-working spaces for up to 100 people. The new facility is part of DBS’ plan to develop a FinTech (financial technology) ecosystem to stay ahead of the digital revolution that is threatening to turn traditional banking on its head.  

One good example of the bank’s FinTech collaboration can be seen in its creation of digibank, India’s first mobile-only bank. Digibank uses artificial intelligence (AI) technology from US-based Kasisto, in which DBS holds a 10% equity stake, an intelligent budget optimiser from Singapore-based Moneythor and a soft token solution by Singapore-based V-Key.

“I'm extremely positive on AI. We’re using different parts of that with what we’re doing with digibank,” says Piyush Gupta, CEO of DBS. Clearly, he, as well as the half a million users of digibank in India, are impressed with Kasisto. “The machine’s ability to handle a whole range of questions and to answer questions based on natural language, is very good.” According to Gupta, Kasisto is able to process payment requests, figure out who the payment is being made to and how much just by tracking the customer’s past behaviour.

Kasisto or Watson?
In 2014, DBS announced a three-year engagement with IBM’s Watson for its wealth management business to improve the financial and investment advice and experience offered to affluent customers. Watson is a cloud-based technology that can process enormous amounts of information with the ability to understand and learn from each interaction at unprecedented speed.

But based on its Watson experience so far, robo-advisers are unlikely to displace the bank’s relationship managers in its wealth management arm anytime soon. “In terms of taking AI to the level of really smart wealth management advice, there is some way to go. I don’t think it’s going to happen overnight. It is going to be sometime before the machine will replace the human being,” Gupta says. Meanwhile, AI is likely to complement the role of the relationship manager. “The banker can use the machine to improve the decision-making process and to improve the engagement process as opposed to the machine taking over the job.”

Where is DBS on Watson then? “We’re still in our third year. We’re using Watson product category and product advising. What we’ve not been able to do is give Watson to our customer so our customer can directly query Watson and get advice. We stopped short of that,” Gupta concedes. His original intent was that Watson would be able to answer any question and apply it to wealth management advisory. “The Watsons of the world are not adequately developed to read every line of text and make sense of it every time. They will get it right 85-90% of the time. You still need a human being to sort out the wheat from the chaff, to convert and take the information across to the customer’s intelligence team. But as a facilitator and tool, it is very, very helpful.” As Gupta describes it, Watson “is an inch deep and a mile wide”, trained to process and answer questions on diverse topics from health, cooking and gardening to banking.  

Meanwhile, DBS has found Kasisto, the chatbot in digibank, to be performing exactly what it is supposed to do. It is answering all the questions asked of it. “It is taking care of 95% to 96% of all our queries, and handled without human interference,” Gupta says. This is because Kasisto was created to operate in the financial services domain and hence built in with a lot more financial expertise and the ability to understand and answer financial and banking queries.

When asked if DBS is extending its collaboration with Watson, Gupta says, “We’re still not sure because we’re expanding our Kasisto chat bot. We find that extremely efficient. We might do more with Watson. We might do more with some other things.”

What is certain is that Phase 1 of digibank is going to be rolled out in Indonesia at the end of Nov while Phase 2 will be rolled out in 1Q17. In India, DBS will also introduce some loan and wealth management products on digibank. All that just points to Kasisto’s expanding role.