New Group CDTIO takes the reins at Standard Chartered
Bank has doubled its technology spend, moved from defensive to offensive
Former ING COO Roel Louwhoff has taken over from outgoing Group CIO Dr Michael Gorriz as Group Chief Digital, Technology & Innovation Officer at Standard Chartered -- a transition first announced in June 2021.
Louwhoff's first day in the office this week comes amid aggressive Standard Chartered digitisation that has seen the bank ramp up investment, as its leadership emphasised a"critical time in our transformation to meet the changing needs of customers across the world’s most dynamic markets" -- with the multinational eyeing "medium term" ambitions to achieve 50% of income from digital initiatives and innovation.
(Dr Michael Gorriz discussed its core banking transformation and cloud migration efforts in some detail in conversation with The Stack earlier in 2021 -- the move has seen the bank migrate its homegrown core banking engine to AWS (EC2, Aurora Postgres, etc.) nearly tripling transactions per second along the way).
See also: Dr Michael Gorriz, Group CIO, Standard Chartered, on swapping the auto industry for financial services, life in Singapore, and going cloud-native
Louwhoff joins weeks after the bank's leadership spelled out further digital transformation plans in an "innovation and digitisation" day on October 13; CEO Bill Winters highlighting the corporate side's cloud-native platform which he said Standard Chartered aims to have "occupying a disproportionate share of the Corporate Treasurer’s or the CFO’s desktop. This is very exciting. We have now got 42 markets covered. We have got 72% of our cash clients migrated onto this platform. We have halved the time-to-market for new products and services, down to eight weeks. We have got digital onboarding for clients in the corporate space, which is quite unique and maybe surprising. Up to 30% of our clients are digitally onboarded which is across nine markets."
(That platform, "Straight2Bank" is an API-led, cloud-native platform that provides access for Standard Chartered's corporate clients to its cash, trade finance and financial market products "on the go"
The bank has also now got real-time onboarding (live account funded in under 15 minutes) set up for its retail proposition with a typical onboarding success rate of over 80%.
Standard Chartered has also added 700,000 customers in two years across its digital banks in Africa -- where it has a footprint in nine markets with 95% of onboarding done digitally -- and rolled out a new cloud-native Banking-as-a-Service proposition called "Mox". This is now in production in Indonesia and teh bank aims to deploy it more broadly across target markets, subject to regulatory sign-off.
Standard Chartered digitisation: Bank ramps up offensive investment
The bank is using its BaaS proposition and a range of other partnerships in part to drive down the cost of customer acquisition, which Judy Hsu (CEO, Consumer, Private & Business Banking, Standard Chartered) recently described as "[costing] anywhere from $150 to $300, but when we work with partners, that becomes almost nothing..." These include partnering with Linklogis, the largest supply chain provider in China and others to offer white-labelled, API-powered banking services that clients can embed into their own propositions.
As Chief Executive Winters put it: "We are prepared to disrupt our own business.
"Mox is the obvious example of that. We are prepared to disrupt other incumbents. What is the point of disrupting? If you identify an unmet customer need and solve it, you have identified something that somebody else was going to get to eventually. If we get to it first we get a chance to grab that share of the market in advance. We can also obviously learn tremendously, not just from what we build in Mox but also our learnings in Mox can port over to the existing retail bank in Hong Kong and vice versa. We set up a disruptive, what I would call the early stages of an ecosystem, but we have grand ambitions, in digital assets, cryptocurrencies.
Winters, who joined the bank in 2015, has been prepared to spend to make Standard Chartered digitisation a success. As he put it during October's investor day: "If you went back six years ago we were investing $700 million or so, depending on exactly how you count it. Almost all of that was defensive. That was addressing historic issues and financial crime compliance, technology deficits, etc. We ramped up our investment aggressively and quickly; $1.6 billion; this year $1.9 billion... We are at the point now where about half of our annual technology spend, about $1 billion, is in fundamentally strategic and differentiating investments. That will continue. We expect to maintain that level of investment certainly for the next several years.."
