Source: Data and Storage Asean
Written By: Satoko Omata
Bank Tech Asia took place on Tuesday and the conference heard from over 30 speakers talk about bank technology and how the tech scene is changing.
This year, a lot of focus revolved around banking-as-a-service. One of the speakers talking about how technology is disrupting the banking sector was Standard Chartered Malaysia CIO and Group CIO for Islamic Banking, Dato’ Arif Siddiqui.
In his speech, Dato’ Arif explained that it is very important for banks to not only innovate but also look at what their customers need. He explored some of the next generation technology that Standard Chartered is currently working on, as well as some concepts that could help banks provide a better service to all their customers. In an interview after his talk, we sat down to talk about data and how banks are faring in the current digital era.
“My view is that banks are continually trying to understand how to provide a better service to their customers. Banks aren’t doing technology (and providing fintech like services) for the sake of doing technology. They are doing it for the purpose of providing the right services for the customers.”
One of the focus Dato Arif noted was the need for a central database that links to all the systems. At current time, banks run different systems for different processes and the data stored of a single customer could be duplicated multiple times, making it not only inefficient, but also susceptible to errors.
“I don’t see this multiple system as a challenge. It’s more about how are we going to integrate these things. Having all the data in a single place is a very useful thing to do, especially for banks that operate globally. People do open account across countries. For many foreign banks, it’s very important to have a centralised database. Few banks have already achieved it, others are getting there.”
Despite the recent hype in cloud adoption rates increasing in Malaysia, Dato Arif tells us that for the time being there is no cloud based introduction in the financial space in Malaysia. All banks are still hard connected to the SWIFT, which is a subsidiary of Bank Negara. However, this isn’t to say that banks aren’t considering it though.
“Moving forward, with the various infra coming in a lot of the banks are moving [sections of their operations] such as email exchange servers to the cloud. So it depends on how you want to be secured. We are getting more and more secured on cloud platforms. That’s how and when the bank will move to cloud – when they see a more secure option, they will definitely move to the cloud.”
“One thing is very clear – if any banks are looking to adopt blockchain they have to look to cloud. It has to be cloud and they have to make sure they are implementing the right cryptography etc.”
Blockchain is a popular service for many upcoming Fintechs, as it is deemed to be very secure. However more than security, another aspect that many customers are worried about tends to relate to privacy, with PDPA (Personal Data Protection Act) being the favourite quoted law.
“First thing is the mindset. Even today, data is moving across countries. If you were making a transaction to any countries, it is going through a payment system, which connects to banking payment systems in other countries. These banks will have data like your name, amount, country of origin etc.; data is migrating even today and this is acceptable.”
“When I’m performing a certain transaction, I’ve agreed that the [data linked to my] transaction will be shared with a certain country. Data privacy depends on how the person or company is working.
What PDPA says is that data can be shared with the consent of the owner of the data.”
“When you open an account, banks have a clause in the contract asking for agreement for the bank to use your data for cross sell and other purposes. This gives banks the ability to carry out transactions without violating the PDPA. Of course, if someone is not willing to share data in that way, there are also ways to handle those instances.”
With the increase in adoption of mobile phones and other IoT devices, it’s vital that banks understand and question how they’re going to integrate this technology into the banking sector. One of the avenues that Standard Chartered is looking at is AI and Machine Learning.
“We have not gone too far [in terms of AI and ML]. We are still in a very initial stage, and we’ve just started video banking and biometric voice recognition, in a transition towards robo-advisor. Robo advisers are our end game.”
Although still in its infancy stage, it certainly gives us a glimpse at how future banking may look like.