Banking: Spurring co-innovation with fintech players

This article first appeared in Personal Wealth, The Edge Malaysia Weekly, on January 21, 2019 - January 27, 2019.
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OCBC Bank (M) Bhd plans to accelerate innovation and digitalisation in the organisation by bringing in financial technology (fintech) companies through its recently launched innovation lab, The Open Vault.

Over the past few years, many local banks have been gearing up to work with fintech players, whether through sandbox programmes or direct partnerships. OCBC set up the innovation lab after an experimental collaboration with US-based fintech firms Ondot and EZMCOM earlier last year.

“The main purpose of The Open Vault is to bring in innovative ideas with the potential of solving real banking problems through co-innovation with fintech firms globally. Also, the team aims to inculcate an innovation culture internally to get our colleagues prepared for future developments in technology and innovation,” says Fabian Lim, head of The Open Vault in Malaysia.

Ondot provides digital card services, including allowing customers to manage their payment cards and preferences on its mobile platform. Customers can determine factors such as where the cards can or cannot be used, the types of transactions that are allowed and spending limits.

Meanwhile, EZMCOM provides instant verification of business documents and identification through digital solutions such as fusion biometrics and behavioural authentication. Both companies are currently in discussions with OCBC to commercialise the solutions that they have been experimenting with.

“The Open Vault is our very own hub to experiment and validate all our new ideas and technologies. The experiments done with Ondot and EZMCOM were part of our success stories last year and we are now confident to start working with more fintech companies to solve other banking problem statements,” says Lim.

There are several areas of focus for The Open Vault — to solve internal business challenges, enhance the customer experience and explore new business models. The key is to start the innovation journey by identifying problem statements, says Lim.

“We aim to tackle ongoing business challenges rather than merely adopting the latest technology with limited internal use cases. Several initiatives have been rolled out since the inception of The Open Vault and e-Know Your Customer, payment and lending solutions are definitely some of the areas we are looking at,” he adds.

Some of the problem statements that have been identified in the internal and back-end processes include the need to emphasise the efficiency and effectiveness of the staff while relieving them from having to do mundane and routine tasks.

“When it comes to innovation for customer-fronting channels, our focus is on streamlining the customer onboarding and product application journey while actively exploring opportunities in our beyond-banking business model. We believe that the bank of the future should be all about delivering value to customers anytime and anywhere, with the use of natural user interfaces,” says Lim.

One advantage that the innovation lab has is its counterpart in OCBC Bank Singapore’s The Open Vault, which was set up in 2015. The latter was responsible for the rollout of Emma (a chatbot powered by artificial intelligence that answers questions on home and renovation loans), a digital business dashboard (in collaboration with 9Spokes) and an AI-powered transactions monitor (in collaboration with ThetaRay, whose solution can identify suspicious transactions).

Last March, The Open Vault in Singapore also added an AI lab to provide natural user interfaces for banking services as well as targeted and tailored products and services driven by machine learning. “The unit has spent the past year developing proofs-of-concept internally and experimenting with natural language, speech processing, image recognition and facial recognition capabilities,” says Lim.

He adds that these innovations will only come to Malaysia following the internal assessment on the demand for such products in the country.