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Executive Column: DBS makes giant step in digital banking

Piyush Gupta (DBS)Singapore-based DBS Bank is poised to enhance its digital banking transformation as one of its strategies to deal with tough competition in the future

The Jakarta Post
Tue, October 16, 2018

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Executive Column: DBS makes giant step in digital banking

Piyush Gupta (DBS)

Singapore-based DBS Bank is poised to enhance its digital banking transformation as one of its strategies to deal with tough competition in the future. As it was named the World’s Best Digital Bank and World’s Best SME Bank by Euromoney in July, it became the first Asian lender and Singapore bank to win two awards in the global category at the prestigious Euromoney Awards for Excellence 2018. It was also named Best Bank in the World by Global Finance magazine in August. DBS Group CEO Piyush Gupta took the chance to share the bank’s view with The Jakarta Post on what would come next after the global recognition and its strategies to strengthen its grip in the market. Here is an excerpt from the interview:

Question: DBS was named the Best Bank in the World by Global Finance in August, after being awarded World’s Best Digital Bank by Euromoney a month earlier. Could you elaborate on the main aspects contributing to the international recognition? What kind of plans do you have in the future based on that experience?

Answer: The bank has delivered strongly on a number of fronts in recent years, but the last 12 to 18 months have been a watershed in many ways.

First, we have started to see higher return on equity coming through. DBS’ return on equity (ROE) has historically been under 11 percent. With some assistance from the credit and interest rate cycles, the value of our newly developed franchises like wealth management and cash management is beginning to be seen. In the first half of 2018, our ROE rose to 12.5 percent and we have indicated that a 13 percent ROE is achievable. This would be in the top decile of developed market banks.

Apart from higher shareholder returns, we are also top of class for customer and employee satisfaction. In 2017, DBS was recognized as having best-in-class service for our sector in the last decade by Singapore Management University’s Institute of Service Excellence. Our employee satisfaction scores are ranked in the top quartile by Aon Hewitt, who also recognized us as “Asia Pacific Regional Best Employer” for three years, running from 2016 to 2018.

In addition, our digital transformation efforts are increasingly gaining global recognition. DBS started our digital transformation in 2014; early compared to many of our peers, and we have made huge progress. Today, DBS has one of the most comprehensive digital transformation programs for a bank, encompassing being digital to the core, journey thinking, culture change, and a measurement methodology that quantifies the impact of our digital transformation on our bottom-line. Taken together, we are now seen as one of the leaders in digital transformation, not just in Asia but globally.

Fintech innovations are now growing fast and it seems impossible for banks to ignore the development. Is there any possibility for DBS to acquire a fintech company in the near future in order to further strengthen its digital platform?

Banks have traditionally operated as “pipeline” companies, working directly with customers. Increasingly, banks will need to make the shift to platform companies and learn to work through partners. In that regard, we are open to expanding our ecosystem partnerships and in making investments either in fintechs or other companies that allow us to embed ourselves in the lives of customers. As an example, DBS has a stake in Kasisto, the United States-based company behind KAI, a conversational artificial intelligence platform. This year, we also invested in Carousell, one of the world’s largest and fastest growing classifieds marketplaces. DBS and Carousell will be collaborating to offer financial products and payment services on Carousell’s platforms.

With a huge customer base and superior customer experience, digital platform giants such as Alibaba, Amazon or Google could become real threats for traditional banks such as DBS. In Indonesia, based on PricewaterhouseCoopers’ survey, bankers consider homegrown ride-hailing app Go-Jek as a new competitor in the banking world, particularly because its payment feature, Go-Pay, has become widely popular and expanded for many kinds of payments. What’s your view on this phenomenon?

I believe most fintechs will end up collaborating with banks because of their lack of customer reach. A small number, however – the platform companies such as Alibaba, Amazon, Google – will be real threats. It was this recognition that prompted us to start on our digitalization transformation journey way back in 2014. This encompassed re-architecting our entire tech infrastructure to become digital to the core, embedding ourselves in the customer journey, and inculcating a startup culture and mindset across the bank.

Customers increasingly want a new kind of banking -- banking that is embedded in their everyday lives and which is so simple and hassle-free that they have more time to spend on the people or things they care about. Our new brand positioning “Live more, Bank less”, launched in May this year, marks our commitment to enabling customers to bank the way they live. We are very much focused on delivering on that commitment.

In addition, over the next three years, some of the biggest fintech / banking trends will be around data, artificial intelligence and machine learning, natural language processing, blockchain technology and ecosystem partnerships. DBS is actively engaged in all these areas and will continue to do so.

We have made some strides in these areas, and in naming us Best Bank in the World recently, Global Finance said this of us: “To become the Best Bank in the World requires a special combination of safety and innovation in today’s rapidly evolving financial services industry.

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