We spoke to three leaders: Ray Ferguson, CEO of Standard Chartered Singapore; Tomohiko Shinozaki, Sankyu’s Managing Director for Southeast Asia; and Chris Wei, CEO of Great Eastern Life, to understand the diverse issues, challenges and opportunities facing them and their companies.
Standard Chartered's Digital Agenda
We first met with Ray Ferguson, CEO of Standard Chartered Singapore, to get his views on the major trends that are shaping the banking industry. One recent trend that Ferguson noted was the profound shift of economic power from the West to the East. In that sense, Standard Chartered – which was formed by the merger of two banks founded in Asia and Africa – is in an enviable position. Approximately 90% of the bank’s profits come from the developing markets of Asia, Africa and the Middle East. While other banks are looking to expand into such markets, Standard Chartered has already been in Asia and Africa for more than 150 years.
What then is Standard Chartered focused on, to help drive its next phase of growth? Ferguson’s response was unequivocal: digitisation. He believes that the increasing tech-savviness of the emerging middle class in Asia should not be underestimated. He pointed out that Indonesia already has one of the world’s largest numbers of Facebook users, with an estimated 52 million users. In China, there are ambitious plans to expand the 4G wireless network beyond its large coastal cities. If this happens, a large portion of the approximately 800 million 2G users in China will have an opportunity to skip the 3rd generation wireless infrastructure altogether.
Rapid advances in technology have reshaped customer expectations in the banking industry. Ferguson gave a personal example of how he paid his credit card bills, sent a cashier’s order, and made an international bank transfer all online and in less than 20 minutes. In his view, customers – especially the tech-savvy young – will no longer be prepared to fill in multiple paper forms or wait in long lines at a physical branch.
Digitisation can also be used to dramatically increase effciency within the organisation. As an example, Standard Chartered has created an iPad application that allows customers to instantly access the bank’s research reports. Contrast this with how things were done in the past. Employees no longer need to waste time searching through cabinets and reams of folders for the right report, and then copying and mailing these reports to customers.
While Ferguson is a strong advocate of the need for the bank to embrace digitisation, he made it clear that the bank will not compromise the fundamentals of banking, such as ensuring suffcient liquidity and managing risks. The financial crisis of 2008 emphasised this fact, as many banks in the West are now holding twice the level of capital they did five years ago.
This is the complex challenge that Ferguson is gearing up his organisation for: to not lose sight of the fundamental custodial responsibilities of a bank, while simultaneously embracing digitisation and the changes it entails.
Ferguson stated it is essential for his employees to embrace digitisation, and for them to understand that it is a priority for Standard Chartered. If there isn’t this common understanding, the risk is that the bank will move too slowly in this direction, or make investments in older technology. He is also encouraging Standard Chartered to aggressively test apps internally. For example, the bank has video cameras at all their physical branches for security purposes. Could they not use these same videos in a downloadable app to help customers anticipate how long the lines might be, and thus time their visits optimally?
Getting employees to test such apps internally serves two purposes. First, it allows the bank to obtain feedback and refine the applications before an external roll-out. Second – and just as importantly – it sends a message to all employees that the bank is committed to using technology to transform the business of banking.
To ensure that his organisation succeeds in the brave new digital world, Ferguson is certain about the kinds of leaders his company needs. “We need people with a real sense of how fast the world is changing, who wants to challenge the status quo and have the ability to act on weak signals,” he said. Ferguson pointed out that Standard Chartered was one of the first banks to move away from BlackBerrys and focus instead on iPads and iPhones in 2010. This required courage and conviction – as back then, many organisations preferred to stick with the tried-and-tested security platform that BlackBerry operates on.
We need people with a real sense of how fast the world is changing, who wants to challenge the status quo and have the ability to act on weak signals
For Ferguson, the best way to stay abreast of the changing world is to travel and talk to people on the ground. In a recent trip to China, Ferguson met up with customers, government offcials, academics, NGOs and employees. He recalled talking to one of his “reverse mentors” – when senior Standard Chartered staff receive input and insights from junior colleagues. Ferguson’s conversations with his reverse mentor – a young, female middle manager from Shanghai – helped Fergu-son understand the quiet confidence and optimism that many in China feel about the future.
As we ended our interview, Ferguson mentioned he was heading out to lunch. While one might expect a CEO to be meeting important clients or investors, he was instead meeting his team of smartphone application developers. His commitment to meeting these employees illustrated the importance of staying abreast of trends by talking with people in the know. As Ferguson stated, “You have to own it (the digitisation agenda) from the top.” The excitement in his voice suggests the digitisation agenda is one he is more than happy to drive.
Part II of this article is available here.
This article was first published in the print version of HQ Asia, Issue 7.