HIGHLIGHTS: Tan Su Shan - CEO of DBS

0:00Hi, everybody. Tune in to this short version of the podcast, which we do every Friday. For the long version, tune in on Wednesdays. hi everyone i'm nicolai tangen the ceo of the norwegian sovereign wealth fund and today i'm in particularly good company because i am in singapore and i'm speaking to sushan who's the ceo of dbs the largest bank in this part of the world and not only that sushan is one of the most important and powerful women in global finance so big thank you for taking the time Yeah, I always, yeah, it's not, I'm not comfortable with that, but okay. Well, that's just a fact. That's just a fact.

0:39Sushant, DBS, tell us about it. So we were formed two, three years after Singapore was born in 1965. DBS was the Development Bank of Singapore. Really to develop Singapore in those days, we were a small, unindustrialized little island. and I guess we have evolved from our development roots now to being the largest commercial bank in Southeast Asia. But I like to use the D word because DBS, although it stands for Development Bank of Singapore, I think we have evolved. I think we've gone from being a development bank now to being a very digital bank. I like to think we are a disruptive bank, but I also want us to remain the dependable bank and also the data bank of the future.

1:25How have you helped develop Singapore? Well, in the initial days of Singapore's birth, independence in 1965, we knew that as a small country with nothing, we had no natural resources. The only thing we had were humans, were human beings. So you have to open up for trade. You have to open up for talent. So if people, goods and services, and money, financial hub, If you can build a financial hub, a trade hub, ports, you'll get people, you get talent, you get GDP growth, you get jobs. So that's how we started. Moving on to your personal journey, you've been with DBS for a long time. 15 years. 15 years, but you've been CEO for six months.

2:09Yeah. So what was the biggest surprise by becoming CEO? I think the fact that you had to manage so many different stakeholders. this. It's not just the board. And of course, I've been used to managing customers and teams and the board. But it's investors like yourself. It's the government. It's a lot of media. It's a lot of, there's a big public persona. Do you think that's fun? Do you like it? Yes and no. I mean, it's fun if I get to meet people like you, but it can be quite intrusive. Like, you know, there will be a lot of stories that I'll think like, hmm, is that even a story? You know, so, you know, you take the good with the bad, I guess.

2:55Comes with the territory. But you have to be careful and on your guard more often than not. But having said that, it's been an honour. I mean, you know, being Singaporean, being, I guess, the first woman for DBS, not the first Singaporean, my boss, my previous boss was, but also inheriting what I think is a really good foundation and having the support of my chairman and my board and my shareholders has been good. Because you know what? Right after I took over, bang, Liberation Day happened, right? And what the liberation? So it was like, wow, okay, baptism of fire, right? And so it's been, you know, interesting.

3:47Per definition, you deal with very wealthy people, right? Any reflections on the common characteristics of wealthy people? Very different. Gosh, you know, depends on first, second, third generation, when they were born, what they went through. but I would say Asia wealth is generally a bit younger than European or American wealth and so a lot of the wealth creation has been from their business either they just IPO'd or they've invested well in their business or they've done well in real estate etc. So it's fairly concentrated and fairly chunky so for you to be relevant to their wealth you really need to understand how was your wealth created?

4:30Was it in shipping? Was it in warehousing? Was it in real estate? Was it in technology? And then when you understand how the wealth was created, then you can kind of get into what are the real needs for your family office or for your personal wealth. Very often, Asian wealth remains pretty concentrated. If they know and love technology, they want to be in technology, right? So you kind of also have to play your role as the trusted advisor to say, really, there's a lot of correlation risks in your portfolio right now. Do you want to diversify into a different currency or different sector, for example?

5:03The fact that the wealth is more recent, newer, more concentrated, more entrepreneurial, what does that mean in terms of how wealthy Asians are different from wealthy Europeans? Well, I think a lot of them, you know, are going through that business transition today. So if their businesses are now moving from the first founding family, first founding generation to the next, you're now seeing a real change, right? So number one, some of them might have children that want to take over. Some don't. And if they don't, then they will need a solution to sell their business or to find a solution for a liquidity solution.

5:44And then you've got the next generation, and all they're thinking about is digital assets, tokenized assets, crypto assets, whatever, or the Mag-7. I mean, I was listening to your podcast, and there's a lot of talk about investing in tech, but the concentration of the new generation wealth in the Mag 7 is huge. And so how do you manage that? The second generation tends to be more global. The first generation tends to be more local or regional, if you will. So being able to toggle that move, provide a solution, because if the first generation thinks, I need to sell, then you have to help them sell, whether it's an IPO or a trade sale.

6:22The second generation comes in, how do you structure? Then the third generation are coming in, what do you do for them? So it is a journey. And also for Asians, a lot of us come from, we have currencies that are quite volatile, right? You know, you think about the rupee, the rupiah, the, you know, RMB, SING dollar, Hong Kong dollar. It's, you know, there's multiple currencies, some more liquid than others. So we also have to think about, you know, how do you protect your currencies as well? What do you think DBS will look like in five to ten years time? How are you going to be different? Our aim is to be the best AI enabled bank with a heart.

7:04So we're still human. I still believe that humans want human to human relationships. But a lot of the mundane, boring work like writing reports, you know, filling up KYC forms and doing mundane transactions can be done by an AI or bot. and it can be done more accurately probably by an AI or a bot. But keep those human-to-human relationships, keep those customer relationships, take out the mundane work, but also have empathy and have respect for our customers and stay there for the long term. Let's drill down a bit more on the AI side. Last year you said that you saved$750 million on the use of AI.

7:47How have you made the bank AI ready? So do you remember, Nikolai, what I said about managing through journeys and using data dashboards to measure? So we do a lot of A-B testing. So send an offer this way, don't send an offer. Price it this way, don't price it this way. So all these A-B testing, we put it into our dashboards and there's an instant feedback loop. Customer liked it, didn't like it. Transacted, didn't transact. And that is instructive. So the incremental revenue for all the nudges that we give out to customers gets captured by this A-B testing. And that is what we measure as a sign of whether the machine learning is working, whether the AI is working.

8:28And so that was$750 ,000 last year, hopefully over a billion this year in incremental revenue. How would you characterize your leadership style? Inclusive, hopefully empathetic, curious. Why is that important? Is it important? I don't know if it's important, but I like to learn. And, you know, whether it's learning about gaming or the digital asset ecosystem or about healthcare or whatever, I think learning keeps, like, I think you're a learner too. I can see that. I hope so. You're definitely very curious. And I think if the leader is curious and they're open-minded and they learn, then that keeps the company relevant and moving forward.