Donald MacDonald of OCBC Bank: Automating front and back-end operations with AI
Inside the Sell Side
Donald MacDonald
Head of Group Customer Analytics and Decisioning | OCBC Bank
Donald has over 25 years of experience in driving value from analytics and leveraging big data to generating actionable insights and increased revenues.
Another emerging opportunity we see is the rise of augmented insights where the AI is scanning business trends and portfolio data to identify insights that a human may never have noticed due to information overload.
Q. What do you do as Head of Group Customer Analytics and Decisioning?
I manage data and artificial intelligence (AI) functions for the OCBC Group in areas where we derive value from data to improve decision making and customer experiences. We also use data to drive revenues, lift internal productivity, and reduce risks. We work closely with colleagues from other parts of the Bank’s businesses to answer their business questions and find opportunities to grow through data-driven insights. I also run the Bank’s AI Lab where we manage the more advanced data science initiatives.
Q. There’s a lot of talk about AI and digitalization now. How are banks staying competitive with these?
We need to differentiate the two – AI and digitalization. Digitalization is easily copied, in the sense where user interface (UI) and user experience (UX) can be replicated quickly. For OCBC, the key sustainable differentiator is AI because it works behind the scenes and competitors will not know how you derived your data. Generally, we use AI to automate front and back-end operations.
I see the future more as a collaboration. Machines will free up our time by taking away “brain-fatigue” tasks that are mundane and repetitive so that humans can focus on higher-value, more complex and interesting tasks.
Q. You have been at OCBC for 18 years. How have you seen your job evolve?
Over the years, the focus of my role has transformed. The analytics team at OCBC has increased from a three-person team to the 100-strong team it is today. When I first started my career, it was still called Database Marketing and we were running manual SQL to generate reports and manually distributing this to our businesses using month-old data. Today, systems are much more sophisticated and the amount of data available has exploded. Everything is now enabled by DevOps with fully automated data pipelines working on real time data using AI. The role of analytics is similar – to generate actionable insights from data – but the way we achieve this has advanced significantly.
The work scope has transformed too. I was initially focused on marketing and cross-selling effectively for the consumer banking business. Today, we cover the entire Group’s business across sales, marketing, improving the contact center, detecting fraud and financial crime, and transforming HR processes.
Q. Having worked on so many projects for the Group so far, what are some AI projects you’re most proud of?
I’m especially proud of our work with Compliance where we jointly redefined the end-to-end compliance processes using AI. Compliance work is not headline-grabbing but it’s a project with significant benefits solving a problem that banks have been grappling with for years. Anti-Money Laundering (AML) functions historically had hundreds of people doing manual activities including using rule-based systems to scan transactions, identify suspicious activities and investigating every single case.
Currently, we use AI to automatically prioritize the AML alerts and identify those that are most likely to be the high-risk alerts. Around 30% of AML alerts can be automatically closed by the algorithm as it knows that these are likely to be false positives. AI also helps the investigators by highlighting suspicious networks and patterns that may not have been visible to a human. Finally, the AI also provides narrative to the investigator explaining in plain English why we think a case is suspicious so that investigator productivity can be lifted significantly – which makes the entire process much more efficient.
Finally, I am proud of our “Next Best Conversation” project. This was one of our first AI projects where we process over 120 billion data points per month to create intelligent and personalized recommendations for our customers. It gives each customer information that would be relevant to them so that they have a better experience, which in turn, helps us drive sales especially within the digital app. Through the use of Next Best Conversation, our digital sales last year increased by two-and-a-half times.
Q. What are some of the major industry challenges and opportunities you see?
The shortage of AI talent is one of the biggest challenges for us, but we have many initiatives to attract talent including the OCBC AI scholarship, a data certification program developed together with Ngee Ann Polytechnic, and a long-standing partnership with SMU’s Big Data Analytics Master’s Program.
One opportunity is the ability to work with external partners to open new use cases and go beyond traditional banking data. This could involve working with the likes of a telco, supermarket or an airline. These collaborations give us access to information that was not available to banks historically and create new experiences for our customers and partners. For example, imagine being able to get pre-approved insurance products or enhanced pricing by giving the bank consent to see your supermarket shopping basket information.
Another emerging opportunity we see is the rise of augmented insights where the AI is scanning business trends and portfolio data to identify insights that a human may never have noticed due to information overload. Imagine being a product manager and being proactively notified each day of the three interesting changes happening in your business. We see this as a huge opportunity to get the right insights into the hands of key decision-makers at the right time.
Q. The robots you are building seem to be powerful. Will machines replace humans?
I see the future more as a collaboration. Machines will free up our time by taking away “brain-fatigue” tasks that are mundane and repetitive so that humans can focus on higher-value, more complex and interesting tasks.