“The future of banking is in Asia and the key driver is innovation,” according to a statement from Standard Chartered Bank and the Singapore Management University, who together established an innovation centre -- the Standard Chartered iLab@SMU – in early 2006.

“The Innovation Centre develops commercially viable innovation projects, opens up access to faculty and student intellectual capital for the bank, and fosters close interactions between SMU’s project teams and our business,” says Adam Spencer, Standard Chartered’s senior manager responsible for System Development, Shared Distribution and Innovation. “Through working with iLab, students gain experience and exposure to a corporate environment where they can learn how to develop and manage intellectual property,” he adds. About 20 projects have been completed to date with approximately five project prototypes being reviewed for production deployment.

From the students’ perspective, the iLab provides a conducive environment in which to sharpen up their commercial skills and respond to real-life business scenarios and challenges. One such challenge was to investigate the viability of voice biometrics authentication technology at the request of Standard Chartered’s Consumer Banking CEO Mike DeNoma. According to Spencer, “We needed to find out how voice biometrics technology could be used in a more innovative fashion to seamlessly authenticate a customer when he or she is talking to a relationship manager.”

Technology and the Customer Experience

In the world of banking, security of transactions and satisfactory customer experience are both key. “Our requirement was to make the user experience as easy as possible with an innovative feature that none of the competition already has,” he explains.

In other words, the bank’s priority is to maximise convenience for both clients and their relationship managers without compromising on security. In many banks, clients who provide instructions for certain types of transactions over the phone may be required to fax a follow-up letter of authorisation to their relationship managers as an additional precaution against fraud. Standard Chartered was seeking an innovative new authorisation system which would make this process much simpler.

A five-member SMU team, comprising multinational students from Singapore, Indonesia, Myanmar and India, responded to the bank’s challenge. Calling themselves “Team Ascendance”, the group worked for eight months to research technology options, analyse the bank’s existing business processes, build a software prototype and integrate it seamlessly into the bank’s current system. According to team member Si Thu Win, “Current authentication processes at some banks are not very convenient especially if the customer is out of the office, and transactions are sometimes cut short as well. Our aim was to smooth out the process by enabling clients to be authenticated transparently, that is, without having to use predefined passwords.”

In theory, the project sounded straightforward enough but, in reality, things were not that simple. At the outset, the team had to deal with some doubt and uncertainty, and progress was slow. “We were dealing with an innovation after all” says Si Thu Win. “From the business side, the bank knew it wanted to use the technology, but didn’t know its capability in detail or exactly how it would be integrated into their processes. From the technology side, the software vendors did not understand how the bank’s business works, and the vendors didn’t know what we were doing,” he adds. Convincing vendors across the globe to cooperate with a student team required strong persuasion skills and assertiveness, and support from the bank as well.

Building the prototype itself presented other difficulties. “The different software we used to build the prototype all spoke different languages, and we had to enable the technologies to communicate with each other,” says team member Michael Ricky Hosea. While building the prototype, the team also took the initiative to provide feedback to Standard Chartered Bank on the actual business processes involved. For team member Damon Widjaja, yet another challenge was trying to put themselves in the customers’ shoes. “For the bank, the client is king. Even if the technology application is very sophisticated, it’s of no value if the customer finds it too difficult to use,” he explains.

Six months into the project, the learning curve became significantly steeper as the team worked to process large amounts of information. Says Ng Woon Bock Keith, “At this point, we started to work intensively, picked up speed and went all the way up.” Help was available from the bank, team supervisor graduate student Daniel Chong, and other iLab staff who provided general direction and tips on how to manage the bank’s expectations.

For instance, towards the final stages of the eight-month long project, the student team unexpectedly encountered some serious obstacles. In addition to technical problems, they found that the frontline business users at Standard Chartered Bank were not convinced the technology would benefit the business process. After much discussion amongst the various groups, a radical design change was made to the system so as to add more value to the bank.

In the end, the prototype was well received. According to Ng, “the prototype helped the bank verify if that was what they really wanted.”  Adds Ericson Chan, group head of Systems Development at the bank: “The project embodied what innovation is all about – the ability to bring a leading edge technology into the business world.” Looking forward, Spencer says that the iLab is putting additional focus this year on deploying successful projects, such as voice biometrics, in Standard Chartered Bank. For example, the bank’s lawyers are looking into intellectual property issues relating to the new business process while the priority banking department is negotiating contracts with various vendors to implement the software system.

Key Learnings

A major issue for the iLab is to persuade students to dare to innovate. For instance, projects can take unexpected turns as in the real world business environment. “Students do find it easier to take on ’safe’ projects, especially for grading. We need to keep encouraging our teams to push the boundaries and provide the necessary support to motivate these teams to achieve,”  says Spencer. Some of the key lessons from this project articulated by iLab’s Team Ascendance hold good for other student innovators:  

• In consulting projects, clients are often uncertain about what they want as the end result. The onus is therefore on the consultant to assist their clients to accurately define and understand their needs and problems. This process could require a significant investment of time, effort and patience after which the imperative is on the consultant to articulate the various possible end results as well as the means to arrive at them.
• It is vital to keep the end user in mind at every stage of the business process. Consultants must put themselves in the position of the end user and try to imagine how their proposed solutions will affect them. Ideally, the solution should be user-friendly and hassle-free, no matter how technically sophisticated. The goal is to retain the end user and attract new ones, not to put them off and drive them towards the competition.
• Dare to innovate. Every problem has an infinite number of solutions, but finding the best ones can only be done by taking risks and  facing rejection. Without innovating, there will be no forward development.
• Work with a multinational team to lend a “global” perspective to the task at hand as far as possible. Solutions that need to be applied in a global context can benefit from being developed by a diverse team whose members represent different educational and cultural backgrounds. Thus, different points of views can be presented and challenged, leading to well-rounded discussions about how to deal with the tasks at hand.