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Hi, I’m David Z Wang, Co-founder and CEO of Helicap. For this May issue of The Heli-Pad, I am delighted to be chatting with my former boss and mentor Su Shan Tan, who is currently Group Head of Institutional Banking at DBS Bank, Southeast Asia’s largest bank, based in Singapore.
I met Su Shan in 2008 at the height of the Global Financial Crisis when she was Managing Director at Morgan Stanley and she hired me for a role on her team. I worked under Su Shan’s guidance for a few years where I was continuously impressed by her intelligence, knowledge of multi-asset portfolio management, and her kind and hands-on leadership approach.
While our careers later diverged – Su Shan joined DBS and served as a nominated member of Parliament for some time, while I went down the venture capital route, focusing on FinTech – we now find ourselves converging around several common themes: FinTech and digitization of financial services, sustainability and financial inclusion, and building high performance teams and inclusive company cultures.
Su Shan was very kind to afford me time to discuss these important topics, as well as share her personal thoughts on her journey to becoming one of Asia’s pre-eminent female bankers. I am honored to share this discussion with our Heli-Pad readers and trust you will glean important insights from Su Shan’s outstanding experience and expertise.
David [Helicap]
Su Shan, it is a real pleasure to have you with us. Let’s start with the hot topic at the moment, which is the disruption that global FinTechs have brought to the traditional financial landscape, especially in light of Covid-19. Last month, JP Morgan Chase & Co. CEO Jamie Dimon said in his letter to shareholders that “Banks have enormous competitive threats – from virtually every angle. Fintech and Big Tech are here… big time!”
You have previously said that your major accomplishment has been changing the culture at DBS to make it more focused on innovation. Can you tell us more about this transformation and how are you positioning DBS for this new competitive environment? Furthermore, is competition really the way to go here or is there a way for big banks and FinTechs to collaborate?
Su Shan [DBS]:
Thank you for having me, David. I will respond to your questions in a theme-based approach.
With the rise of FinTechs, we knew that traditional banks like us needed to transform to remain competitive. And if DBS wanted to be digital to the core and act like a tech company, we needed to learn from the best in the business (i.e. Google, Apple, Netflix, Amazon, LinkedIn and Facebook). Our mission was to become the ‘D’ in GANDALF (formed with the first letters for these companies).
Our digital transformation journey started in 2009 where we had to fix the basics before we could even imagine being a digital bank. We focused on three elements: (1) digitizing to the core, (2) embedding ourselves in the customer journey and (3) changing the culture of the company to become a 29,000-person start-up.
Our aim in all this is to disappear into our customers’ lives, to provide banking products and services that are so seamlessly embedded we can be the “Disappearing Bank of Singapore”. This is also how we deliver our brand promise – Live More, Bank Less.
At DBS, we’ve maintained for a long time that there is nothing about technology which makes it in the exclusive purview of a few players. And so there is no reason why incumbent banks like DBS cannot create the same kind of capabilities and customer experiences that a technology company can.
In truth, we believe that we are fairly well advanced. DBS has been recognized as the World’s Best Digital Bank now on a few occasions and in fact the World’s Best Bank is testimony to the fact that our customer experience, customer products and capacity to use data and digital is fairly well developed.
Therefore, the greatest opportunities for both banks and FinTechs lie in fueling the competition to push one another to bring the best solutions to our customers. It’s healthy for our business and the industry.
Having the right engagement model can leverage the strengths of the startup and bring capability (in new tech), novelty (in proposition) and nimbleness (in delivery) and combine them with the strengths of the bank in regulatory/compliance infrastructure, security protocols, relationships/network, brand/trust etc.
I view the collaboration between FinTechs and financial services as multi-pronged. From a co-creation structure, where we leverage on the FinTechs’ solutions to build together a more ambitious and robust product.
From an ecosystem perspective, where we join forces to integrate our capabilities to increase market share and more importantly, our offerings to our existing and new customers.
From an inspiration and guidance point of view, where we learn from one another as well as receive mentorship.
From a financial support angle, where we provide the most comprehensive and beneficial SME banking services for FinTechs that want to establish presence in specific regions.
At all times, we must also design with FinTechs a virtuous, continuous experimentation loop, where all key findings and insights feed into the FinTechs’ and the banks’ learnings and offerings.
DBS is directly engaged with FinTech start-ups and we run our own in-house accelerator programmes. One of our programmes, Startup Xchange, is dedicated to fostering stronger FinTech collaborations. From our experience as a mentor of with these companies, they are typically expert in ‘Tech’ but require expertise in ‘Fin’. DBS has played a key role connecting the two, not only by providing subject matter experts, but also by delivering banking services that enable start-ups to connect their products to clearing infrastructures.
While there may be organizations that are prudent about working with start-ups, we believe there is a role to play in nurturing and nourishing the start-up ecosystem within Singapore. The opportunity to work with an anchor brand like DBS paves the way for more customers and investors for start-ups. The support that Startup Xchange provides in co-creation and product evaluation is also critical in helping start-ups pivot their solutions. And this helps us to fuel stronger entrepreneurial and creative spirit.
David [Helicap]
You have covered wealth management for a good part of your career and now you are heading Institutional Banking at DBS. There is broad consensus in the industry now that we are dealing with a new generation of high-net-worth individuals: highly educated, worldly, and entrepreneurial digital natives who are also socially conscious and focused on governance and sustainability. We are seeing a fundamental reshaping of finance at the institutional level too to address these new client priorities. How are you and your team in institutional banking helping companies in the areas of sustainability and financial inclusion?
Su Shan [DBS]:
Responsible banking is a key pillar of DBS’ approach to sustainability and through sustainable financing, we seek to deliver products and services that promote sustainable development and conduct our business in a fair and responsible manner.
This could take the form of sustainable financing, be it through green loans, green bonds or sustainability-linked loans, where the borrowers are incentivized by banks like DBS for meeting predetermined environmental, social and governance (ESG) targets.
In February this year, DBS more than doubled our sustainable finance target to SGD 50 billion by 2024, accelerating our sustainability agenda in helping customers incorporate sustainable business practices into their overall business strategy.
In 2020, we closed SGD 9.6 billion in sustainable financing transactions, up 81% from the previous year. This comprises SGD 4.2 billion of sustainability-linked loans, SGD 597 million of renewable and clean energy-related loans and SGD 4.8 billion of green loans.
We are confident that this strong momentum will continue as companies emphasize sustainability in the post pandemic world.
With growing global awareness on climate change factors and sustainability imperatives, companies are increasingly being nudged to transform towards more sustainable business models.
The rise of the next generation of business leaders, who tend to be more environmentally conscious, has also led to the development of new innovations that leverage renewable energy resources or recycled materials to reap operational and cost efficiencies.
At DBS, we are seeing more companies proactively incorporating ESG in their business practices as they also view it as a way to future-proof their business. To remain relevant, companies will need to balance profits with meeting the needs of society – to demonstrate their efforts in supporting the betterment of lives and livelihoods, and show how the organization is changing and investing in business practices to encourage a more sustainable future.
However, we also have to look into the economics and dynamics of where companies are, at this point in their sustainability journey. It’s impractical to demand an overnight adoption of sustainability. Many businesses in Asia, especially those which are heavy users of energy and natural resources, remain hesitant to adopt sustainable financing due to concerns of greenwashing accusations, prompting the need for a more tailored solution to tackle the region’s sustainability challenges.
This is why we launched our Sustainable and Transition Finance Framework and Taxonomy in 2020, and we’re Asia’s first commercial bank to come up with such a framework, because we find that transition is particularly pertinent for this part of the world.
We use this framework to pinpoint incremental but instrumental solutions for companies in fossil-fuel-reliant industries to be able to tap into the sustainable finance market. No company should be excluded as long as the long-term decarbonization goal is in place.
David [Helicap]
SMEs have been one of the most affected productive tiers of the economy during Covid-19. What are some of the initiatives you are undertaking at DBS to cushion the financing burden on these enterprises and what lessons can we glean on protecting the financial inclusion of this vital sector of the economy in Asia?
Su Shan [DBS]:
SMEs are typically more vulnerable than larger corporates in a downturn and DBS remained a trusted partner to SMEs and extended the financial support needed to weather the crisis.
We partnered with governments and industry associations to avail critical working capital support to SMEs. Through 2020 in Singapore, DBS approved over SGD 5 billion in collateral-free loans to SMEs, with over 90% of total SME loans approved since last March, for micro, small and medium-sized businesses.
To help SMEs innovate, adapt and thrive in the post-pandemic economy, DBS has gone beyond just lending and availed a suite of digital solutions to help SMEs transform their businesses. These include the DBS F&B Digital Relief Package to enable F&B establishments to build a digital presence online in as fast as three days, while digitalising backend processes such as invoicing, accounting, HR, and payroll. SMEs can also tap on a range of payments and collections solutions, including DBS MAX, the bank’s mobile-based QR payment collection solution.
We’ve also doubled down on our support for micro and small enterprises. Many have sound business models but are facing a cash crunch with business momentum slowing significantly due to the Covid-19 disruptions. In the meantime, overheads and contractual expenses still have to be met. We are engaging our micro and small businesses closely to ensure that they have the working capital support they need to meet these challenges.
With the economic situation and road ahead still uncertain, business owners must be ready for a long fight, and will need to take care of themselves to avoid burning out. That is why DBS has also gone beyond just supporting our micro and small enterprises with their working capital and digital transformation needs by rolling out new initiatives to cater to the well-being of business owners.
While working capital and cashflow concerns continue to be top of mind, business owners are giving serious thought to how they can reposition their operating models to capture new revenue streams in a changed world. This includes a growing appetite for more business partnerships. DBS is well-placed to plug micro and small enterprises into our network of ecosystem partnerships, including our larger corporate customers and technology partners, so that we can jointly realize new growth opportunities. We are also delighted that business owners are becoming increasingly keen on more sustainable operations.
Social enterprises (or businesses for good) play essential roles in improving lives and livelihoods while addressing key societal gaps at a systemic level.
DBS Foundation, the first foundation in Singapore dedicated to championing social entrepreneurship, has therefore increased funding pool of its 2021 DBS Foundation Social Enterprise (SE) Grant Programme to SGD 3 million – more than double last year’s grant amount. This is the bank’s latest move in a series of heightened support measures aimed at supporting SEs in times of need as the pandemic persists and enabling them to continue creating positive social impact. With the bigger grant quantum this year, we hope to support more SEs in the region during these especially challenging times, as they make bigger strides in delivering impact and enacting change from the ground-up.
David [Helicap]
One of my key missions as CEO of Helicap is to build a high-performance team culture that is also respectful and inclusive. I am a firm believer that these qualities are not mutually exclusive. I know team building has been a career-long endeavour for you too. Where do you say the consensus stands now within Singapore’s larger financial institutions? And as you further move towards digitization and tech, do you think you will face any new challenges pertaining to sourcing talent?
Su Shan [DBS]:
In the same way that Covid-19 has accelerated digitizing different ways of working and lifestyle changes, diversity and inclusion will be more important than ever as organizations, including banks like DBS, look to innovate and adapt.
Innovation and agility will be critical as companies recover from the pandemic. Those that are more able to reimagine their businesses in the new post-crisis environment will win. This means developing new ways of working, new products, new services, or even entirely new business models. Beyond gender diversity, people with different ideas from diverse backgrounds, will create more adaptive, effective teams, contributing to quicker recovery.
When it comes to diversity and inclusion, a company’s mission, policies, and practices, as well as co-worker behaviours can help people feel that they are treated fairly and respectfully.
At DBS, we believe the diversity of our people is a powerful performance lever. Embracing gender, generational and cultural diversity and providing equal opportunities means that we support our employees as they grow and thrive in different aspects of their lives. This extends to keeping gender bias out of our recruitment and talent management processes.
A big trend of Covid-19 has been the large number of workers being able to work digitally and remotely. There’s going to be a significant acceleration in that phenomenon. In addition to pure efficiency, it will change the capacity for companies to source talent from multiple locations across
geographies.
David [Helicap]
Su Shan, you have established yourself as a trailblazer across Asia’s financial landscape as a woman, mother, philanthropist, supporter of arts and culture, and lobbyist for women’s issues at the government level. What do you feel are your main leadership accomplishments thus far and what lessons are you keen to pass on to the upcoming generation of female leaders?
Su Shan [DBS]:
Winston Churchill once said: ‘You make a living by what you get, but you make a life by what you give’ – which really resonates with me, as I believe life is far more fulfilling when you’ve made an impact, be it in work or your personal life.
So it’s gratifying for me to know that the awards and accolades over the years not only recognize our team’s results and achievements but that I have made some impact in those areas. It definitely wasn’t a solo journey because I’ve had very good mentors and diverse teams with different talents and skillsets who have contributed to each and every one of these successes.
As a leader, I believe in being honest, open, authentic and humble. I find that people want a leader whom they can build long-term trust with. It’s very important to engender trust in that people know my intentions are good. I over communicate, I’m honest, I always try to be clear. Once there’s trust, everyone can go and divide and conquer and do what they do best. That’s how winning teams are formed. I look to hire the best talent and be a talent magnet to create a team that is hyper-coordinated.
More than just results, celebrating milestones is the real reward. When the team comes together to celebrate the success of the months of hard work. I think the human interaction in sharing that joyous moment together is what makes the success a lot sweeter and gels the team together.
I’m a firm believer in mentorship. Many young people whom I’ve mentored have become way more successful and better than me. This in itself is a real pleasure to watch, but now, they are also mentoring my children who are young adults! So by me paying it forward, it has also become paying it back as my kids are now the new beneficiaries!
You can learn from anyone and it is not age dependent but more attitude dependent, to have the humility to learn, unlearn and relearn. I’ve also had the pleasure of what I term reverse mentorship. Young people in their 20’s have taught me a lot about their world – from coding to social media behavioral patterns! In short, I lead by surrounding myself with people who are smarter and better than I am.
I’m a big believer in adaptability. In the past, a lot of people talked a lot about IQ and EQ but AQ, the adaptability quotient in these disruptive times is I think very important. And a leader who can display great agility and adaptability in very big changing circumstances, will be a big stand out leader of the future.
I also often tell young leaders not to be scared to take one step back because if you do a good job one step back, you will actually take two steps forward. I did this during the early parts of my career with the focus that if I wanted to evolve and learn new things, I’d have to eat humble pie and start from scratch. One of the first things I did when I joined DBS more than 10 years ago was I asked my boss to demote me. That’s not a natural leadership-focused thing to do, I guess. But at the time I felt it was the right thing to do because in order for me to do the right thing for the organization, I needed to be a step lower, in a position where I could work effectively to bring the business and segments together more holistically.
I encourage women to manage their career trajectories more, to not be afraid to have conversations with their seniors like, “How am I doing? What do I need to do to get to the next level? How can I use the flexible work arrangements but stay on the career ladder?” It’s also critical to provide an
environment of psychological safety for females to ask questions and speak up, to be heard and to fail.
Male sponsors within the senior management of an organization have a big role to play in advancing female empowerment. My CEO and chairman are great advocates for women leadership. We have more women than men at DBS with a large share of women at the top and the required HR polices to support this commitment.
Balancing work life is a huge focus for women especially and I lead by example when I have to prioritize family commitments over work. So they are assured that it’s ok to step away from work to attend to other needs in their lives.
I also observed that many women left the corporate world and lost touch once they got married and had kids. So I founded the Financial Women’s Association (FWA) Singapore in 2001 with a group of like-minded women from banking, to create a community that will develop and encourage females in the industry. I instituted rotational leadership so that other women could step up and realize their potential.
David [Helicap]
Thank you Su Shan for the frank and comprehensive discussion. We wish you further success leading all these initiatives at DBS, and we look forward to further collaboration between FinTechs and banks in the future.
– End of QNA –
For this issue of The Heli-Pad, we have curated a selection of recent press picks on the digitization efforts by SEA’s traditional banks as well as the increasing collaboration with FinTech startups. Happy Reading!
Indonesia’s FinAccel acquires 24% of shares of a publicly listed bank for $38m
FinAccel, the parent company of Indonesia-based buy now, pay later (BNPL) service Kredivo, has bought a 24% stake in publicly listed Bank Bisnis Indonesia according to the bank’s disclosure to the Indonesia Stock Exchange (IDX).
Digital Growth and Financial Inclusion in Southeast Asia
Although “superapps” (apps that offer multiple digital services on a single platform) in Southeast Asia have been lauded for their efforts to promote greater financial inclusion, their ability to scale sustainably is less certain.
How Southeast Asia’s largest bank plans to become a startup
Soh Siew Choo, DBS’ Group Head of Consumer Banking and Big Data/AI Technology, discussed lessons from the bank’s digital transformation journey at the recent Apidays conference.
What Have Singapore’s Digital Banks Been up To?
It has been six months since The Monetary Authority of Singapore (MAS) announced the four successful applicants for Singapore’s inaugural digital banks.
While the digital banks are only expected to turn operational in 2022, there have been notable developments since the licensing announcement in December last year.
What investors and banks in Asia do next matters most
Within the financial services sector, there are four standout next-gen technologies that firms are leveraging to significantly boost both performance and profitability, and to stay relevant in the new operating environment. These technologies are Artificial Intelligence, Blockchain, the Cloud and Digital – what Broadridge calls the ABCDs of Innovation.
Read more on The Business Times
Fintech players can only succeed as digital banks if they capture big ecosystems
It’s no wonder that the region’s unicorns are chasing each other to crack the toughest nut in the financial services tree: digital banking. Digital banks have a higher barrier to entry than other segments, mostly due to higher regulatory and risk requirements and the need for huge capital to stay competitive with legacy banks.
Embedded Finance: How it is Disrupting Banking as we know it?
A report by Google, Temasek, Bain & Company predicts that digital financial services such as lending, investment and insurance will each grow by more than 20% annually through 2025. For banks to succeed in this changing space they’ll need to partner and collaborate with fintech firms to take advantage of each other’s respective strengths.
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