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Friday, May 19, 2017, 14:55
Lending a hand to ‘smart’ crusade
By Lin Wenjie
Friday, May 19, 2017, 14:55 By Lin Wenjie

In line with Singapore’s vision to turn itself into a digital nation, old-timer banker Sebastian Paredes is playing a critical role in DBS Bank’s transformation in HK. He talks to Lin Wenjie.

Sebastian Paredes says DBS Bank’s digital revolution would go beyond building digitization platforms to building a digital ecosystem in 2017. (Photo by Roy Liu / China Daily)

Veteran banker Sebastian Paredes is dead set at transforming DBS Bank (Hong Kong) Ltd into a digital chieftain in the city’s banking business.

“And, we should be one of the banks that could win in the future,” says the chief executive of the Hong Kong unit of Singaporean banking giant DBS, brimming with confidence.

Paredes, acquainted with the banking sector for over three decades and having worked in nine countries, sees financial technology continuing to whip up a revolution in the money dealing world.

We’re embracing digitization in a transformational way, not with the purpose of cutting down expenses or headcount, but shifting all the tedious manual work to digital, so our staff will be more willing to work with the evolution

Sebastian Paredes, chief executive of DBS Bank (Hong Kong) Ltd

We’re embracing digitization in a transformational way, not with the purpose of cutting down expenses or headcount, but shifting all the tedious manual work to digital, so our staff will be more willing to work with the evolution

Sebastian Paredes, chief executive of DBS Bank (Hong Kong) Ltd

“We see fintech (financial technology) as the most important thread of our business in the future. People are nowadays utilizing technology as a vital engagement with banks and, therefore, if we embrace the new digital developments, we should be one that will ultimately find itself on the victory stage,” he tells China Daily in an interview.

The versed banker set foot in the SAR seven years ago, taking the baton from Amy Yip Yok-tak as CEO at DBS Bank (Hong Kong), witnessing its ascension to being one of the elite players in the Asian banking scene and steering the institution toward a digital-driven future.

DBS — a multinational banking and financial services corporation with a 22,000-strong staff — was inaugurated by the Singapore government in 1968, just three years after its bitter political break with Malaysia, in a bold bid to project the newborn island state as a modern metropolis. With total assets of $343 billion as at Dec 31, 2016, it’s today the largest bank in Southeast Asia by assets.

Paredes sports a unique, positive Latin American personality, hailing from his native Ecuador. There’s no hint of what he calls the “seven-year itch” on him as he hangs on in Hong Kong.

The digital revolution at DBS Hong Kong is far more than just turning all its services online. It’s creating a digital ecosystem that can alleviate the repetitive and laborious work of human staff, while making banking a joyful and invisible part of daily life for customers, thus people’s lives will not revolve just around banking.

Supporting the evolution

“We’re embracing digitization in a transformational way, not with the purpose of cutting down expenses or headcount, but shifting all the tedious manual work to digital, so our staff will be more willing to work with the evolution. At the same time, our clients can save a lot of time doing banking without necessarily accessing various financial products,” says Paredes.

DBS Hong Kong had small-and-medium size enterprises (SMEs) very much in mind when it turned their traditional business account opening process into an online experience that can be completed anytime and anywhere, eliminating the hassle of scheduling face-to-face meetings at bank branches during office hours by enabling SME customers to complete the due diligence process via video conferencing.

In addition, DBS Business Class, which is designed to help SMEs grow their business and expand their networks, saw its membership swell to 2,000 within a year of its launch last year.

The lender’s digital revolution doesn’t just involve SMEs. “All our support functions at DBS Hong Kong have a three-year plan for digitization, and all our bureaus also have plans for building digitization platforms, as well as transacting platforms and, most importantly, we’re moving into a stage of building a digital ecosystem in 2017,” says Paredes.

Impressive showing 

DBS Hong Kong’s credit-card platform, for instance, will be fully digitized in an ecosystem that will allow clients to use the card without presenting it.

Amid its strong focus on digital innovation, DBS Hong Kong put up an impressive showing for the first quarter of this year, helped by a stabilized Chinese mainland economy and an improved global economic climate. The lender registered a whopping 80-percent surge in the number of online customers, compared with the same period in 2016.

The bank’s net profit in the first quarter rose 8 percent from a year ago to HK$1.26 billion, while total income grew 3 percent to HK$2.9 billion. Driven by asset growth, net interest income was 5 percent higher at HK$1.9 billion. Net interest margin was stable at 1.79 percent. Fee income rose significantly by 36 percent, or HK$213 million, to HK$800 million, driven by higher wealth management, cash management and card contributions, as well as a strong recovery in capital markets, the bank said.

On the global political and economic fronts, Paredes admits he’s a bit unnerved by what’s going on on the Korean peninsula, as well as the global protectionist trend which can impact globalization and free trade.

“However, having said that, we’ve started this year on a strong note. I’ve become more optimistic in 2017 than the past 18 months,” he says with a beam on his face.

‘Going through the mill helps make a good leader’

With a banking career spanning three decades, Sebastian Paredes, chief executive of DBS Bank (Hong Kong) Ltd, had gone through the mill.

He saw two of the worst and most dramatic economic meltdowns to grip the world this century — the 2008 global financial tsunami and the European debt crisis a year later. The crises have equipped him with the insight to find the right answers for the right problems.

But, what’s the most critical element in a financial leader in overcoming a crisis? In his view, integrity is one of the great attributes of those at the very top.

“Integrity is paramount in a leader in the face of calamity. Integrity does not mean just honesty, but embodies the way a person thinks, interacts, perceives and treats customers and staff,” asserts Paredes.

In his regard, how to deal with a crisis varies with time and region. But, the philosophy is the same, which is the respect for how a leader runs his team, how he sees his customers and employees, and how he communicates with them.

“The more crises you face, the more mature you’re become and the better you can handle them. Always remember, the customer comes first.”

Integrity is defined as “firm adherence to a code of especially moral or artistic values”, meaning people who live with integrity are incorruptible and incapable of breaking the trust of those who have confided in them. But how to develop personal integrity lies in the word “balance”.

“It’s very important to strike a balance between short-term returns and long-term objectives,” argues Paredes, referring to a leader’s responsibility to weigh the cost and benefits of every decision, as long-term strategic decisions take time to reflect on financial results while short-term operational ones impact results in the short term.

He points out that, sometimes, a decision taken may improve profits in the short run, but may hurt a company’s profitability in the long run; and sometimes a long-term decision may weaken short-term profitability.

“There’s also the balance between risk and rewards, such as hiring the right talent for the right job. A leader needs to create an environment for his employees to reach their personal and professional goals, and to make them feel they’re not at risk in doing the job.”

Today’s leaders, he stresses, have to acquire new technologies, such as digital technology and artificial intelligence, as robotics is advancing and technology is transforming the world.

“What my father told me a long time ago — something that has shaped my life — is that the more successful you are, the more humble you need to be. Life is about balance, between work and family, money and fulfillment. We need to learn how to find fulfillment at work.”

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