Neal Cross, DBS Bank’s chief innovation officer, says the bank has launched APIs with about 50 partner companies, and is in the process of adding another 50.
“I want to go to one thousand,” he told DigFin.
DBS now has 170 APIs on its platform. APIs, applied programming interfaces, are tools that link software, enabling one party’s app to run on another’s data.
Cross wields the buzzword ‘ecosystem’ to describe the growing reach of the bank’s API platform, which now includes doing business with multinationals like McDonalds, domestic companies such as Indonesia’s Gojek, fintechs or other technology startups such as accounting firm Xero, and social enterprises.
“The ecosystem is up and running,” he said.
DBS is scrambling for ecosystem real estate as it reacts to the rise of large-scale digital platforms. Technology companies as well as other multinationals, anyone with access to vast amounts of peoples’ data, are getting into financial services.
Big companies are acquiring co-finance, supply finance, lending or insurance businesses, not because they want to become banks but because they see adding financial services wins them customer loyalty.
“Changi Airport Group is now selling insurance,” Cross said. Utilities and getting into lending, while taxi companies and other consumer-facing enterprises are doing payments.
Banks can either provide the actual financing behind the scenes via APIs, which gives the bank access to partners’ marketing, sales and technology teams – or risk losing touch with the end customer.
Although consumer banking is at the forefront of open API banking, Cross says the same thing applies to corporate banking: “Corporate clients want information to be made simpler,” whether to manage customer accounts or compliance.
Although APIs are nothing new, Cross says most banks aren’t sufficiently ambitious about developing these relationships. “The tech part is easy,” he said. Moreover, once the API platform is up and running, the hard work has been done: adding incremental partners gets marginally cheaper and easier.
DBS’s digibank, its all-digital bank in India, was the first big project under Cross’s team. Digibank now has 1.6 million customers, which Cross says makes it a success. But it’s a business model rather than a blanket tech platform for the bank: DBS won’t be rolling out a replica in Singapore or Hong Kong, although these markets might use some of the chatbot or other services that digibank prototyped.
“We’re more cautious in markets where we’re dominant,” Cross said. The bank already offers apps and other services developed for Singapore and Hong Kong, so a digibank entry is unlikely for now. “There are 1.4 billion people in India and 250 million in Indonesia,” Cross said. “That’s a lot of upside for us. Whereas in Singapore is a market of 5 million people and we already bank 90% of it.”
The API platform, on the other hand, is largely a Singapore-oriented one, suggesting that it’s possible to get strong partners in markets where the brick-and-mortar business enjoys a strong brand – implying that it would be harder to build an ecosystem of similar scope in other markets.
Cross says banks needn’t attempt to roll out a one-size-fits-all platform. “Digital isn’t about digitizing the bank,” he said. “Digitize your staff – and they’ll digitize the bank.”