What’s after the demise of accelerators?
By Rudy Lim, Head of Fintech, DBS Innovation
Think about your business challenges today — customers need more personalised services and employees demand more efficient internal processes. But are you ready and willing to make the change? According to “State of Innovation” report by CB Insights, high-performing companies are more likely to be first movers. In fact, 35% of high-performing respondents were first movers and twice as likely to be risk-seeking.
Companies must innovate and tap into emerging technologies to stay ahead of the curve. As DBS becomes the Digital Bank of Singapore, we too need to leverage digital technology to extend our reach, enhance our efficiencies and create solutions for a better tomorrow. This mindset has been critical for us to become the best bank in the world. And that in a nutshell was the basis for conceiving the DBS Startup Xchange.
Shaking up the status quo
Startup Xchange, a programme by the DBS Innovation’s fintech team, was launched to enable DBS and our customers to harness the power of emerging technologies. While accelerators were the norm, we made a conscious choice to deviate from such a model.
Our research found that 78% of locally launched accelerators have become defunct as many start-ups had failed without the continued support from established sponsors and partners. A 2018 Ernst & Young ASEAN Fintech Census also revealed that less than 39% of fintech start-ups benefitted from fixed tenures at accelerators. It takes more than just seed monies when it comes to supporting start-ups.
So we embarked on a unique journey to match DBS’ business teams and our clients to start-ups with cutting-edge technology solutions. It’s a win-win proposition — we solve problems faced by the bank and our clients, while providing valuable business to the fintech start-ups.
We find this imperative for our transformation from a conservative bank to a nimble 26,000-person start-up. How does Startup Xchange play to this change? Instead of behaving like external innovation consultants, we embed ourselves in the business unit. We work together to solve the unit’s challenges and present the value that start-ups bring to the table. Being in the same boat encourages better appreciation and incorporation of more technologies such as natural language processing, artificial intelligence (AI) and peer-to-peer finance platforms, among many other solutions that start-ups provide.
Since its pilot launch in 2018, Startup Xchange has successfully matched 21 start-ups with our colleagues across the bank and resulted in the successful roll-out of more than 10 emerging technology solutions. We can’t wait to see more this year.
Goodbye problem, hello solutions
Imagine being stuck with a problem to solve, and not knowing where to start scouring for the right vendor that has the perfect solution. After jumping through hoops to find a suitable solution, you’re hit with a long lead time to facilitate procurement requirements. Prior to the launch of Startup Xchange, this was the usual process that our colleagues had to go through.
Startup Xchange now offers a more collaborative and nimble approach, making it easier and more efficient for our colleagues and clients to look for suitable start-ups, co-create and find solutions to their pain points.
By focusing on four main pillars of technology, Startup Xchange has facilitated the development of many innovative business solutions — from Jim, Southeast Asia’s first virtual recruiter for wealth planning managers, to order-pay-collect apps for multiple F&B partners such as Food Republic and Itacho Sushi.
Fintech start-ups: competitors or collaborators?
Fintech start-ups are often seen as disruptors of financial institutions but we saw them in a different light. It’s a no-brainer that we always need cutting-edge technologies to push boundaries and offer our customers the best experience. But do we always own the expertise? On the other hand, fintech start-ups are always looking for mentorship and new business pipelines. We saw endless opportunities for mutually beneficial partnerships between us and fintech start-ups.
For example, one of the earliest solutions developed through Startup Xchange’s involvement was Kopi Ong Foodster, Southeast Asia’s first bank-led retail chatbot that allows customers to pre-order their food and beverages via Facebook Messenger. Every Botty, the chatbot specialist that developed DBS Foodster, was co-assessed by Startup Xchange with our colleagues from the Digital and Emerging Payments team and Kopi Ong as the merchant. Since the implementation of Kopi Ong Foodster, the coffee house’s daily sales have grown by 20% and store operations have been exponentially optimised. The differentiated approach is effective because we can scale such a proof-of-concept for other merchants with similar challenges.
Another Singapore-based AI start-up, impress.ai, partnered with DBS’ human resources team to create Jim, a virtual bank recruiter. The start-up has since raised US$1.2 million in funding and seen a five-fold increase in monthly revenues. What did we get from the partnership? Our talent acquisition colleagues now save 40 manhours a month with Jim’s assistance in the first phase of recruiting wealth planning managers. This was another example of how Startup Xchange is not restricted by the constraints of an accelerator model. Business units and start-ups do not need to delay the use of their solutions, depend on mentors who have busy schedules, or wait for their new pot of additional equity funding.
It takes a village — and this applies very much to problem-solving and the creation of a product or service that matters. We want to foster a more collaborative culture of innovation through design thinking and experimentation both within DBS and start-ups. It’s in our core to develop more meaningful and fruitful partnerships.
Think about your business challenges again today. Are you now ready and more willing to make the change with us?
A business challenge is less daunting with the right support and start-up experts. Get in touch with startupxchange@dbs.com to embark on your own Startup Xchange journey.
