Unprecedented market changes can be a ‘fantastic opportunity’

Patrick Dreyfuss, Chief Operating Officer for DBS Wealth Management speaks about how digitalization is enhancing both client experience and engagement, increasing RM productivity, ensuring compliance and laying the foundation for future growth.

Digitization and the rise of artificial intelligence, amongst other technologies, might be the biggest threat to the status quo – but it also provides huge potential.

“The pace of change which is happening – and going to happen – is unprecedented,” he says, citing the impact of new technologies, client expectations, regulations competition from other incumbents and new entrants from the tech world amongst the challenges faced by the banking sector. “The market will change much faster than before and it can be a threat – or a fantastic opportunity.”

Despite increased competition,the affluent and private banking market in Asia keeps growing. And Dreyfuss intends to use digitization to capitalize on this. Given DBS was recently named “World’s Best Digital Bank” by Euromoney for the second time in three years, it is certainly wellplaced
to take on the challenge.

According to Dreyfuss, being truly digital involves a deep transformation of the bank, from the front office to the back-end functions.

“What this also means is that digital is not just something done separately and only for customers. To be successful, we have to invest in people and skills differently, adopt agile and cooperative ways of working across the organization between business and technology.”
In fact, DBS is so focused on ensuring that employees have a start-up mindset that “digital” KPIs are added to the employee scorecards.

He adds, “We also design our IT architecture efficiently, by focusing on the job to be done and embedding the controls in our processes. For instance, suitability controls for a trade can be called as a service by various internal applications or client channels, but are performed centrally by
our core system.”

DBS is also working with plugand- play solution providers to help underpin their services, with Dreyfuss alluding to the fact that robots and automation would play a major role in the future of wealth management including fraud control.

“We are engaging with quite a number of Fintech and regtech companies. And for some, we are providing support to work on proof of concepts. We are interacting, and we are very keen to see what they are offering,” concludes Dreyfuss.

A sustainable business

After all, for any business, profitability is at the heart of sustainable growth. “What we are doing in our digitalization agenda addresses
both net and gross income. Digitalisation helps reduce costs by achieving productivity gains. But it also helps improve our revenue, by extending our reach and engagingour clients more and better.”

For Dreyfuss, developing a sustainable business extends beyond the financials, “Commercial targets are important to meet, but this cannot be at the expense of doing the right thing for the client and meeting their expectations. This includes meeting risk and control targets.”

The bank follows several risk indicators. “We have a dashboard for each banker, with point systems depending on specific indicators
which for instance includes potential operational losses, KYC reviews overdue, or any non-compliance with the selling process.”

It works, Dreyfuss says, because it does not only apply to the bankers, but also to their managers, and because the bank walks the talk by taking these into consideration in the appraisal and compensation process.

The bank also regularly organises a risk task force forum with all the business heads to identify risk areas of concern or share industry best practices, and formulate comprehensive action plans, including communication to the front line.

Supporting RM performance

As part of its drive to raise service standards and grow the activity, DBS places huge importance on supporting RMs to be more efficient.

“The job of a relationship manager is very different from what it was ten – even five – years ago. They have a lot more to do and certain processes have become fairly complex,” says Dreyfuss. He adds, “We provide them with our RM Mobility tablet, which is an integrated digital platform for client engagement. It comes with a comprehensive RM Dashboard with relevant events pending actions related to the client, client portfolio details, dynamic presentations tailored to the customers portfolio and more.”

“Technology is definitely bringing significant efficiency benefits, so bankers can spend more time with clients and on value-adding tasks.”

For Dreyfuss, this includes spending time on understanding their situation and needs, and connecting the clients with the right experts in the bank, such as a wealth planner or an investment counsellor to ensure appropriate needs-based advice,

“Another example, obviously, is KYC. Over the years the source of wealth corroboration requirements have increased, which is why we
have implemented a new KYC case management system to further structure the data, automate the tasks and controls, including the
screening and web searches and better manage the process with a real time MIS , to make it more efficient and minimise the number and extent of reworks, to save time for all the parties,” says Dreyfuss.

Improved client engagement

“Not only are we empowering the relationship managers and our clients, but this also turns out to be beneficial from a financial standpoint, because clients who are engaged digitally are much more profitable,” enthuses Dreyfuss.

“Clients who engage digitally tend to follow their portfolio more closely, and be more active. It’s essential for us to be relevant, timely and deliver value to them. They get access automatically to all the research that is relevant to their portfolio and investment insights adapted for their profile, and alerts related to their holdings or their account, such as price alerts, corporate actions, product maturity, or order status,” says Dreyfuss, who points to the fact that clients now demand a much better experience and the capability to take action anytime, anywhere through whichever channel that is more convenient to them.

If news breaks in the night, they can place a trade rather than wait until the next day and miss the opportunity.

Part of meeting these expectations is proposing the right solutions and products to the client – and being able to automate as much of the suitability processas possible is key. “It’s critical for us to offer advice which considers the entire situation of the client,” says Dreyfuss who adds that DBS is set to roll out a new suitability approach based on the entire portfolio composition rather than the individual risk rating of the products.

“We are upgrading our suitability framework later in the year to further improve the granularity and the breadth of the advice – which brings both control and client experience benefits.”