DBS bank develops a tool to focus on analyzing internal risk
With the help of the Singapore government, DBS has successfully developed a new type of market analysis tool, which focuses on assessing the primary motivation for “rogue traders” or employees’ suspicious behavior.
Up until now, banks’ market analysis tools have tended to focus on assessing external risk factors such as market movements, yields or consumer fraud, rather than internal factors. DBS Bank’s view, however, is that “Limiting and minimizing loss through tackling internal risk early on is already yielding positive results”. The product is aimed at preventing the major internal risks which can prove fatal for a bank, as opposed to external risk, and is an effective example of the practical application of fintech, helped by government support.
“The finance industry will change completely over the next 10 years” – Piyush Gupta, DBS CEO
DBS’ software uses “pattern analysis” (predictive analysis) to gauge internal risk, using data provided by the Singapore government. Many banks invest in expensive third-party services for their risk assessment products, but DBS has kept costs down by spending money on its own independent software tools.
Singapore is renowned as an international business city. The government, along with financial institutions and research institutions, are thus joining together to support their country’s growth and development in fintech. Singapore’s next stage of evolution is to address the challenge of the business reform. With the country now directing significant resources towards this, the whole region is reinventing itself as a "business laboratory”.
Global fintech investment was in excess of $22bn in 2015. Although Asian investment in fintech was over $4bn last year, the region’s potential as a major player in fintech is still remarkably unknown.
The Monetary Authority of Singapore will invest $225 million over five years to set up development centers in banks, as part of its plan to support financial reform. This is a level of enthusiasm which other countries cannot hope to compete with at present.