CO-WRITTEN / PARTNER | Tim Charlton, Singapore

PwC's John Dovaston on digital banking, contactless payments, and driving growth in a pandemic

The consultancy’s Asia-Pacific financial services leader says he is excited to be part of the judging panel for the ABF Awards in 2020.

John Dovaston leads PwC’s Asia Pacific Financial Services business and is a member of the Global Financial Leadership Team with a focus on working with companies within the Banking and Capital Markets, Insurance and Asset Wealth Management sectors. He has over 30 years’ experience working globally with large multinational institutions in the areas of international strategy and execution, transformation, digital, deals, risk and regulatory and
financial reporting.

Additionally, Dovaston has served on several industry and business global leadership teams, including semi-government, which provide management oversight of key functions, such as market and business strategy, risk and regulation and people development. Dovaston brings all of that experience, and more to the judging table of the Asian Banking and Finance Awards for 2020. He also found time to speak with the editorial team about the outlook for the finance industry in these unprecedented times:

Can you share with us your work experience or any backstory that has contributed to your professional career?
Firstly, I am very excited to have had the opportunity to be a judge for the Asian Banking & Finance Awards 2020 and I commend ABF and the entrants who clearly showed their passion for helping provide solutions for their clients.

I am very fortunate to have lived and worked across the world, thriving on a mix of cultural and business environments within the Banking and Capital Markets, Insurance and Asset and Wealth Management industries. At the start of my professional career I only dreamt about traveling and working around the world — but now that has become a reality! My children were born in the US and Japan and all of them speak another language in addition to English.

Whilst I currently live in Australia, I lived in Japan for 10 years and the US for four years and have worked for extended periods of time in Seoul, India, Chile, Brazil, Canada and throughout Asia Pacific. In my current role as PwC’s Asia Pacific Financial Services leader, I continue to be energised by the many cultures and business opportunities within the region. I’m a huge believer in giving back to the community, so when I’m not in my day job I’m bringing my personal and professional passions to life in my board roles at a contemporary art gallery and a professional football (soccer) club.
According to a survey by SingSaver, around eight in 10 Singaporeans will likely continue to bank online even after the pandemic curve flattens. What are some of the driving factors that have turned on the use of digital or mobile banking, and what are we seeing in other parts of Asia Pacific?

COVID-19 lockdowns and social distancing has required a greater use of online and digital banking within the Asia Pacific region and across the globe. The likelihood of this continuing after the crisis will depend on consumers' continued appetite for digital interaction and willingness to trust, and banks' ability to attract more than just the younger demographic.

Our PwC survey data indicates that consumers under the age of 35 are one-and-a-half times as likely to open an account based on experiential factors, with interest rates and promotional bonuses consistently ranked lower in the order of decision drivers, regardless of age.

Some banks rely on products like credit cards or savings accounts as a source of the primary relationship with customers. We believe the conversation needs to shift away from individual product type to providing the right solution — and therefore the right experience — to clients. A bank that engages with solutions rather than products will, for example, help a customer set up a savings plan for a house down payment or be with them through a car purchase, rather than simply signing them up for the particular loan product. Digital is an option to help banks engage earlier, understand the needs of particular individuals, and proactively help them meet their goals.

With remote work arrangements and contactless transactions becoming the norm, what are the new skills that bankers and financial professionals need to learn?

This is such an important area and CEOs at financial services firms face a dilemma because the industry is changing rapidly, and they must build the right skills for their organisations to continue to compete in the future. Based on PwC’s 23rd Annual Global CEO Survey, the industry has yet to solve this challenge — but it must.

In a fast-changing economy, winning companies are those that are adept at building new skills and capabilities, particularly those based on digital technology. Such companies have moved beyond the traditional ideas that upskilling equals training and that the workforce is a fixed entity; instead, they create more flexible ways to access the skills and capabilities they need. Although those skills can be gained through alliances, joint ventures, partnerships with government and academia, and other types of collaborations, the most lasting results come from upskilling the current base of full-time employees.

The COVID-19 pandemic has highlighted the need for digital transformation and upskilling initiatives aimed at improving both internal processes and customer engagement. We only need to look at the changing roles of commercial bankers, wealth advisers, and insurance sales and distribution staff, all of whom are now engaging with clients via digital channels for sales, relationship-building and support. The shift to working from home has also put new pressure on organisations to manage security as well as employee productivity, with ramifications for companies' real estate portfolios and IT infrastructure.

The financial industry has certainly been active since the offset of the pandemic, particularly with stimulus packages, rate cuts and other tools being implemented to help the economy stay afloat. What do banks need to consider now in order to drive growth?

As lockdown restrictions begin to ease, in certain countries, the strategic focus within Banking and Capital Markets (BCM) is pivoting towards how to succeed in the post-crisis world. The road ahead is challenging, but these circumstances also present a unique opportunity to boost growth and reassert the value of BCM organisations within society.

BCM organisations already play a key role in solving the problems COVID-19 has caused by supporting vulnerable clients, providing a credit lifeline for businesses and helping deliver government economic initiatives. Their contribution will continue to be critical in kick-starting economic recovery and strengthening company resilience for future crises. Helping carve a path forward provides an opportunity for the industry to build trust with consumers and be part of resetting and reasserting its role within society. The COVID-19 lockdown has forced all businesses to rethink how they operate. Now, as the return to work begins, it’s important to build on this reassessment to determine which ways of working have stood up to this intense test of efficiency and resilience, which ways haven’t and how to do things differently in the future.

The pandemic and resulting economic crisis have changed many of the demand, supply and return dynamics within the BCM industry; for instance, by prompting even lower interest rates and a further squeeze on net interest margins. Such developments could make consolidation attractive for some businesses. Ultimately, the trajectory of overall recovery within different markets remains uncertain. It's also likely there'll be significant variation in the impact and pace of rebound within different industry sectors and subsectors. Banks need to ensure they are in the best position to benefit from the rebound and be agile in responding to opportunities, while also safeguarding financial stability and proactively managing risks and exposures.

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