Web3 is revolutionizing the financial services industry. Known as the third iteration of the internet, Web3 is the next step in the evolution of the web and distributed ledger technologies such as blockchain.
To keep pace with the development of the Web3 space, financial institutions are investing heavily in blockchain-based technologies. One such bank is OCBC, which is leveraging these emerging technologies to fuel growth.
Peter Koh, head of technology architecture at OCBC Group, said the bank is capitalizing on the growth of the Web3 space to create new products and services.
“Blockchain has the potential to transform the financial sector by reducing costs. It can also result in faster execution, improved transparency, and auditable operations. This in turn creates safer and innovative financial products,” he said.
Drive future growth
The Web3 paradigm shift has also introduced new growth drivers for OCBC, such as artificial intelligence (AI). “With analytics insights derived from AI machine learning, we were able to drive revenue growth,” Koh said.
Leveraging Web3 technologies, the bank is testing real-world use cases, such as cross-border payments, money-for-purpose, metaverse, document verification, and digital identity.
“Additionally, ownership of any asset, including stocks, bonds, real estate, and cash, can be tokenized and represented on a blockchain, creating entirely new asset classes such as NFT and asset securitization. These assets can then be traded directly between individuals, democratizing access to financial markets,” he said.
To seize new business opportunities in Web3, OCBC has developed partnerships with a myriad of fintech companies. In April 2022, the bank partnered with MetaVerse Green Exchange (MVGX), a digital green exchange licensed and regulated by the Monetary Authority of Singapore (MAS), to develop green financing solutions aimed at accelerating the journey of a company towards carbon neutrality.
Additionally, in August this year, OCBC’s Lion Global Investors collaborated with one of Asia’s leading private market exchanges, ADDX, to launch a cash management tool – ADDX Earn – which allows investors with excess funds in their e-wallets to earn interest.
Web3: Technological innovations
To keep pace with the latest developments in the Web3 ecosystem, OCBC continues to push the boundaries of innovation in its banking operations, such as those in application development and infrastructure.
A prime example is the bank’s recent blockchain infrastructure upgrade. OCBC has successfully completed two proofs of concept to use blockchain for document verification and trade matching between OCBC entities.
Another infrastructure enhancement made by the bank is an enterprise blockchain platform that can scale the development and deployment of blockchain-based applications across the group.
“We have created a blockchain enabler which is used internally to accelerate the development of blockchain-based products and services for our consumers,” Koh added.
OCBC is also revolutionizing digital banking by experimenting with the metaverse and developing technology tools to improve the customer experience. For example, to better serve its online customers, OCBC is building a virtual branch that will allow its customers to access its online financial services with an immersive experience.
The bank is also leveraging augmented reality (AR) technologies to boost customer engagement. A great example of this is an AR feature in the OCBC mobile app that overlays product features and promotions to facilitate an immersive customer experience. Another customer-centric AR use case is an auto loan calculator, which allows OCBC customers to virtually adjust loan terms and interest rates and view payment terms.
Web3 talent center
OCBC’s foray into Web3 means having a pipeline of blockchain-powered talent is critical to the bank’s growth trajectory. This would explain why the Singapore bank has put a lot of effort into recruiting Web3 talent. The bank has also designed personalized on-the-job learning paths to help its employees acquire skills and knowledge relevant to Web3.
One such ambitious initiative is a job rotation program, which familiarizes OCBC employees with blockchain concepts and technologies. “For example, we have an employee who started as a mobile developer and later honed his skills in microservices development. About a year ago he was redeployed to work on blockchain and is very happy with this latest challenge. “revealed Koh.
Another promising Web3 talent initiative is the OCBC Future Smart program, one of the most ambitious digital transformation initiatives of a Singaporean bank. Ten certification paths have been designed to prepare OCBC employees for the future, which can help them take on enhanced roles in Web3. “We have identified the key technology skills the bank needs for internal vacancies, such as developers and scrum masters. To that end, we are partnering with Pluralsight to provide online training for our employees,” Koh said.
To build a sustainable pipeline of qualified AI professionals to fill digital skills gaps in the bank, OCBC is also offering AI Graduate Scholarships to high caliber students.
Notably, OCBC’s technology architecture division is embarking on a Web3 hiring journey. Since 2021, the department has tripled its workforce in its main markets in the region. “We hired people with unique skills and from diverse backgrounds. A very interesting hire we did was a technology architect who is highly skilled as a coder. In fact, his coding skills are recognized by the open source community, and he is a contributor to the Arctic Code Vault,” Koh revealed.
Advantages and disadvantages
Despite the enormous potential of Web3, there are significant challenges in the space.
“There is a duality in Web3. With anonymous identity (privacy) and freedom of speech on the internet, things can easily be taken out of context and quickly go south. Some ecosystems can also be manipulated for the gains of a few bad actors, for example, by hyping up certain tokens and then throwing them away. Therefore, our customers and employees need to be educated and aware of the risks and pitfalls of Web3,” Koh warned.
Nonetheless, he asserted that the bank will continue to increase its investments in blockchain-based technologies and human capital. “Ultimately, we want to operate as efficiently as new technologies allow and leverage digital innovations to deliver a superior customer experience.”