UOB poised to ride the digital wave

Ms Hwee of UOB explains how the bank focused on laying a strong foundation before going digital.
Ms Hwee of UOB explains how the bank focused on laying a strong foundation before going digital.

United Overseas Bank (UOB) has often been the slow and steady player among local banks when it comes to embracing the digital revolution, but it is speeding things up.

The move into a higher gear comes after it spent years building a foundation that cuts across areas such as digital, payments, data and security.

Ms Susan Hwee, head of group technology and operations, told The Straits Times that UOB outlaid $500 million from 2011 to 2013 to build a "core banking system" so that its entire network, across countries, can be on the same platform.

"We invested heavily in regional infrastructure first, and we also standardised and centralised where the regulations permitted. Where not possible, we standardised the software and the systems," she noted.

"That was the beginning of transforming UOB from being a Singapore-centric bank to a regional bank with 500 branches in South-east Asia, and our subsidiary in China."

Singapore is the global IT hub for UOB, which also set up a security operations centre here 18 months ago that runs round the clock with a team of 12 employees.

These innovations have made it easier for the bank to roll out several products and services in Singapore in recent months, with plans to take them across the region in the next 12 to 18 months.

One of the innovations is the UOB Mighty e-wallet app, which lets Android smartphone owners with UOB cards use their phones instead of physical cards at contactless readers to make payments. Since UOB Mighty was released last November, there has been a more than 20-fold increase in mobile contactless payments on its cards.

"UOB Mighty has gone through four versions in Singapore in the last 10 months, and we are developing the roll-out for Thailand in the first quarter of next year, and for Malaysia in the second or third quarter next year," said Ms Hwee.

Cardholders will also be able to get instant digital credit cards issued through the app by the end of next month.

Ms Hwee noted this would not have been possible without UOB having its own tokenisation infrastructure. Tokenisation involves substituting a user's credit card number with random numbers when a merchant sends transaction data, a move that reduces the risk of online theft.

"For us, tokenisation is about recognising the uniqueness of the card, not necessarily for payment."

All this is also part of what she calls the UOB digital engine - a process to smoothen the customer experience across several points, including payments and credit card applications.

UOB has also changed the way it manages data, which a central warehouse has been collecting for the last 10 to 15 years. Ms Hwee said the data has helped in areas such as meeting Basel compliance requirements, but the bank is now moving to data discovery. A three-year programme to work on that began last year. "We're not selling the data, but taking seemingly mundane data to create value for the customer, that then increases our relevance to the customer."

An example would be the dining function on the UOB Mighty app, which not only points out restaurants near users, but also which ones have deals under UOB cards, which could encourage cardholders to choose UOB cards first.

"If we don't create that regional platform, where UOB will be the same in Thailand, Indonesia, Malaysia and China, how will we be a regional bank to serve our clients? "

A version of this article appeared in the print edition of The Straits Times on September 16, 2016, with the headline 'UOB poised to ride the digital wave'. Print Edition | Subscribe