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Another interesting nuance of the FinTech Bank is the integration of business and technology. I’ve referenced this a few times, but wanted to be explicit that these banks think technology is business and business is technology.

This is clearly demonstrated in their microservices team structures and agile thinking. Auditors, compliance, financial and marketing people sit in teams co-creating with designers, developers and coders. Again, it quite surprised me that there is no functional structure in these banks. Sure, there are people who sit in different roles, but they do not distance themselves between people in other roles. Quite often, they will sit together and work together. In other words, they are all motivated by digital transformation to make things happen together, and are not bonused or structured to just get rewarded for what their job does.

One of the best ways to illustrate this is in DBS’s rewards structure where traditional measurements of success are now combined with digital reward structures. The traditional measurements comprise 40 percent of the bonus; the areas of focus another 40 percent; and 20 percent of the new digital indicators.

What are the traditional measurement structures?

  • Deliver consistent income growth
  • Be cost-efficient while investing for growth, with cost-income ratio improving over time
  • Grow exposures prudently, aligned to risk appetite
  • Deliver consistent ROE
  • Achieve broad-based increase in customer satisfaction across markets and segments
  • Deepen wallet share of individual and corporate customers
  • Improve employee engagement levels; top quartile of My Voice engagement peer group
  • Provide people with opportunities for internal mobility to enhance professional and personal growth
  • Maintain or reduce voluntary attrition
  • Achieve top quartile retention and performance in all key markets

Areas of focus measurements are based upon the individual’s area of expertise and may relate to personal performance, compliance with regulations, community and geographic focus. But the final section on digital transformation makes for interesting reading. The Key Performance Indicators (KPIs) here include:

  • Ecosystems: Measure the progress made in developing meaningful relationships with ecosystem partners.
  • Acquire: Measure the progress made in leveraging digital channels to acquire new customers with increased digital channel share.
  • Transact: Measure the reduction in manual efforts by driving straight-through processing and instant fulfilment.
  • Engage: Measure the progress made in growing customers’ digital engagements with the bank.
  • Measure the progress made in driving digital behaviours of our consumer and SME customers, and increasing the income from digital customers.
  • Strengthen management processes, technology and infrastructure platform.
  • Employee metrics measure the progress made in being an employer of choice, including employee engagement and people development.
  • Measure the progress in embedding ourselves in the customer and employee journey to deliver superior experiences.
  • Measure the progress in re-wiring mindsets to be a 24,000-person start-up anchored on our values.

You can read detail about this approach in their annual report of 2017 (pages 36-41), and it does make interesting reading, particularly in the results that relate to these metrics.

I’ve seen similar approaches in the other digital banks I’m talking with. For example, BBVA measure the performance of their regions, countries, managers, individuals and all of their services and sales via digital media. This is how they know in near real-time how customers are adopting digital services, reporting in August 2018 that 38.6 percent of total sales in the six months through June were through customers using remote digital access, compared to 22.4 percent in 2017 and 14.6 percent in the first six months of 2016. In Spain, 42.4 percent of the units sold in the January-June period were through digital channels compared to 24.9 percent a year earlier. In Mexico the figure was 32.7 percent up from 15.5 percent, in Turkey 40.6 percent versus 32.1 percent, in the United States 21.7 percent up from 17.9 percent, and in Latin America 51 percent compared with 22.9 percent a year earlier.

Customers who are digitally satisfied are also cheaper to serve. For example, BBVA noted that their cost-efficiency ratio stood at 49.2 percent in June 2018, a reduction of over 8 percent on the year before.

The bank ended June 2018 with 25.1 million customers using digital channels, 20.7 million of whom use smartphones to interact with the bank. Interestingly, just five months later, BBVA claimed to have reached a global digital tipping point with more than 50% of customers accessing products and services through remote electronic channels. In November 2018, 26.4 million digital customers interacted with it through mobile devices, PCs and tablets, up from 22.2 million a year earlier, representing a 19% y-o-y channel shift.

Technology is business and business is technology. Clear measurements of digital success are key, along with the right metrics for measuring that success, and business has to sit with technology in co-creating these services, not just sit in isolated silo units.



Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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