Rise of the chatbots: Here's how Singapore's big banks are adopting fintech

54% of fintechs have focused on banks.

Singapore is already recognised as a top global fintech hub, thanks to government support and proximity to expertise. The year hasn't ended yet, but the sector has already transformed the banking landscape, UOB Kay Hian said.

The firm identified two fintech business models, namely, competitive, which directly challenges incumbent banks, and collaborative, which enhances their positions. Those in the latter gathered more traction.

Investment in collaborative fintech companies increased 138% as fintechs increasingly view incumbent banks as potential partners.

As a result, banks have also seized the opportunities by collaborating and investing in fintech companies. Amongst fintech companies, those within the banking & payments subsector took the lion's share at 54%.

DBS has redesigned its IT infrastructure, leveraging on big data, biometric and AI to make banking simple and seamless for customers.

On 16 April, DBS also launched Digibank in India, a mobile-only bank that is paperless, branchless and involves no signatures.

Customers are serviced by an AI-powered virtual assistant created in partnership with Kasisto, a spin-off from the creator of Siri. The virtual assistant is able to handle 80% of customer requests without human intervention while the balance 20% of customer requests go to live chat sessions.

UOB Kay Hian said that the upgrade has acquired 1.5 million new customers and 450,000 savings accounts.

DBS also developed iWealth for its wealth management business. Through this, users conducted banking transactions, accessed researches and analysis, and managed and traded a portfolio of stocks and funds. A mobile platform was launched in 1H2017.

Meanwhile, OCBC launched Emma, an AI-capable chatbot, on 17 January. The bot was able to answer questions on home and renovation loans with a total debt service ratio (TDSR) calculator. OCBC recorded that more than 10% of chat sessions have been converted to home loan sales prospects.

The bank also launched the algorithm-based robo-advisor that guides clients in their investment journey. Clients first complete a questionnaire, which determines their risk profile and investment goals. Thereafter, clients are advised to invest in one of five portfolios of ETFs and a thematic basket of stocks listed on the NYSE and NASDAQ. The platform will monitor the chosen portfolio and conduct regular rebalancing of an investment portfolio.

OCBC also tapped AI and machine learning to combat money laundering and terrorism financing. Its software detected suspicious transactions by assessing broad parameters.

Meanwhile, UOB launched its UOB Mighty app which allows contactless payment for Android phones, which was made to Malaysia and Thailand this year.

It also leveraged social messaging apps and injected into them its fund transfer app called UOB MyKey. Users can use WhatsApp and Facebook Messenger to make PayNow payments.

The banks also launched NFC-enabled contactless ATMs on 16 October. Users can withdraw cash from contactless ATMs by scanning their thumbprint and keying in their PIN into their smartphone.