In April 2019, The Barton Partnership hosted a Banking and FS Roundtable in Singapore. The key points discussed throughout the evening are summarised below.
•Regional strategy reports to group strategy at many of the global banks. This can create a tension between the reporting line into global strategy and the need to build trust and effective working relationships with the regional and local leadership teams. The regional strategy lead has to balance both roles in a market environment that can change rapidly.
•Regional banks and some of the global players have strategy resource reporting into Regional Leadership. In banks like DBS it allows them to lead strongly from the centre. It could allow global banks better flexibility to adapt to regional dynamics and to be agile. However there may be duplication of cost and loss of global control / consistency.
•An alternative is reporting to global Business Unit Head, which provides strong connection to the business to aid ease of implementation of new initiatives. However, the challenge still remains in terms of connectivity with other parts of the business.
•In most cases the core strategy teams are relatively small, with more manpower being put into transformation and / or productivity teams. Analytics and new technology adoption are also growing areas of focus.
•According to one attendee – “The capability of the business is now driven by technology, not strategy.”
•Some banks have their innovation teams in-house, others have an M&A approach, while still others have created innovation labs/hubs.
•The best (and possibly only) example of a bank launching an innovative proposition that they managed to reintegrate with the main bank was mBank in Poland. However, we couldn’t identify any other examples. Is it proof that it is possible or the exception that proves the rule?
•UOB trialled a “Shark Tank” pitching scenario with employees at all levels invited to pitch ideas. The successful ideas received funding. Though still early stage this was a successful model for increasing employee engagement with innovation and tapping into industry and customer insight.
•Innovation hubs are often located in “hip” offices, removed from the core business. Anecdotes suggests this can generate resentment / disconnect and you still have the challenge of how successful products will eventually be integrated back into the business. Rotating selected employees between two can mitigate to some extent.
•There is always a risk of “drinking from our own cool-aid”. We need to stay centred on customer needs and wants (outside-in, not inside-out).
•Apple would be an interesting competitor as their brand stickiness is incredible and places like Singapore have very high penetration of devices.
•If Goldman were to go into retail banking in Asia, their resources could pose significant threat to current players.
•Telco companies may be well positioned to provide financial services in the new landscape.
•Only one thing seems certain – the successful ones will be customer-centric.
Evolution of consulting:
•The primary reason given for engaging a consulting firm was to validate an unpalatable decision.
•Consulting firms can be impactful when it comes to whole scale transformation but internal strategy teams are stronger in terms of deep industry knowledge (beyond the high level strategy).
•An outcome based fee offering is seen as an interesting evolution by clients but the measure has to be carefully defined – even with long-time and trusted clients there have been instances where the amount paid was half what was agreed.
•Competition for talent is higher than ever and the range of desirable skills and experience within the strategy function may be shifting to include digital, technology etc. It can be difficult to understand what trade-offs you need to make to assemble the right team.
•There are challenges noted unlocking creativity, particularly within regional and local talent versus the global expectation.
•Diversity rising on the agenda (often weighted towards gender diversity, rightly or wrongly) but there are no clear solutions to and this talent pool is smaller and more constrained – the most sought after talent in Singapore is probably a highly qualified Singaporean, mandarin-speaking, female.