Big banks going virtual – what’s in it for Singapore?

We live in a tech-savvy era where ease and speed of service delivery have been the epitome to every successful business. The financial industry is not excluded from this trend and big banks have begun to re-evaluate its conventional means.

For a start, brick-and-mortar branches dwindle in numbers as an increase number of transactions now exist in what we call the ‘cyberspace’. Banks are also now open to partnerships with start-ups for instance to upgrade its payment services.

In line with this, what are a few latest initiatives that are currently undertaken by our banks in region? And are there any potential risks to be aware of?

DBS

  • Start-up Xchange programme

DBS Bank has launched its Start-up Xchange programme in both Singapore and Hong Kong, with an aim to match start-ups with the bank’s corporate and SME clients’ problem statements. It is part of a five-year SG$10 million investment made by the bank in 2015 to support the development of start-up and also DBS’ mission to house a 26,000-strong team of start-ups. It will provide employees learning and collaboration opportunities with start-ups, and encourage a shift towards design and agile thinking. To date, over 15,000 DBS staff have participated in various initiatives every year.

The programme is mainly focused on four areas of frontier technology such as Artificial Intelligence (AI), data science, immersive media and the Internet of Things (IoT). DBS looks to harness these technologies for both the bank and its clients to “stay one step ahead” of their customers, and fulfil their business and lifestyle needs at the same time. The Start-up Xchange also ropes in start-ups to co-create solutions with the bank to address business problem statements in real-time.

  • DBS-GOJEK Partnership

DBS Bank and GO-JEK, a technology start-up based in Jakarta specialising in ride-hailing and logistics, have entered into a regional partnership, ahead of GO-JEK’s arrival in Singapore. The partnership will see both companies working together on payment services and soon extend this to other countries in Southeast Asia.

With plans to launch its ride-hailing app within the coming weeks in Singapore, it already has the support of its existing investors include Google, Temasek, Tencent and Meituan Dianping.

Partnerships as such reinforce DBS’s status as one of the best and most innovative digital bank in the world, tapping into various different industries that can help support its customers in receiving the best financial services.

UOB

  • New financial services alliance with Grab

Similar to DBS’s partnership with GO-JEK, UOB will become Grab’s preferred banking partner in Singapore, as well as a strategic credit partner for Grab in other parts of Southeast-Asia such as Indonesia, Malaysia, Thailand and Vietnam. Given the popularity of e-wallets, the partnership will also enable Grab users to top up their GrabPay wallets directly from their UOB bank accounts.

UOB will also explore support for Grab in a number of other areas including fleet financing, regional and centralised treasury managing solutions, as well as workplace banking services.

This can create tremendous value for consumers and drive greater access to financial services in the region.

Citi

  • Virtual Remote Engagement (VRE) debut

Being the first bank to launch such a move in Singapore, this VRE aim to allow its wealth management clients to conduct portfolio reviews through screen sharing and video capabilities. The VRE is designed to enable faster and smoother communication through live audio, chat and video banking on Citibank Online. A service with ‘Citi Mobile’ will soon follow, aiming to make available its services on-the-go.

Bridging the gap, Citi’s management customers can now easily hold remote discussions with their relationship managers with its user-friendly design. This service is already live on both online and mobile channels in Hong Kong and will be progressively rolled out to 15 markets across Asia Pacific and EMEA for Citigold and Citigold Private Client customers.

OCBC

  • Consolidating digital strategies

Unlike most banks, OCBC is one that do not intend to create a “new” bank outside of the conventional bank to pursue purely the banking digital strategy. However, this does not mean that they are not open to the idea of virtual banking.

OCBC believes it does not need a separate digital bank to look for new customers, whether  in its core markets or even in countries like Indonesia where it has a smaller market share.

In fact, OCBC has been spending more on technology as it pushes towards digital transformation throughout the bank in the last 5 years. In the first nine months of 2018, technology spend by OCBC was S$330 million, against S$430 million for the whole of 2017. This was due to the ability to reduce its costs with the right technologies in place, signifying a long-term benefit for investing more within digital strategies.

OCBC is also committed to spend S$20 million on educating its staff in digital knowledge. This is because they believe that apart from the work perspective, being digitally equipped is essentially for societal development.

 

Potential risks to fear?

The tech bubble is vulnerable and could potentially ‘burst’ from external threats such as security breaches and flaws. These existing threats could potentially exploit weaknesses of virtual platforms and compromise the privacy and security of data.

Nevertheless, as Singapore continues to reign as one of the leading fintech hubs, levelling up on tech expertise is essential for future growth. Do you think the road to virtual banking will be a smooth sailing one? If not, what do you think are some of the risks we should be more conscious of? Contact us via the form below, or follow us on our LinkedIn page to read up more on other relevant industry insights.

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