Interview DBS Bank

Tan Su Shan, group head of consumer banking and wealth management at DBS Bank, tells Ronan McCaughey about the success achieved by the bank's digitalisation strategy. Tan also explains DBS's roadmap for 2018.

Tan Su Shan (TSS): The answer is we had no choice. If DBS did not embark on a digital journey we probably would not survive. It’s that innovate-or-die attitude.

Startups and fintechs have been unbundling banking and offering banking services in bite sizes in a far more cost-effective and customer-centric manner. This means integrated banks with big heavy branches andrelationship managers (RMs) to support may or may not survive.

Bill Gates famously said people need banking, but not banks. Digitalisation has enabled us to do quite a few things, such as reaching out to markets where we did not have a big physical presence. Our digital strategy has enabled us to come up with new products that hitherto we could not come up with, such as e-wallets and online trading to algorithmic lending. It has also helped us reduce costs.

Digitalisation for DBS involves being digital to the core. It is not just digital lipstick. It is not about putting out an app. Anyone can put out an app.

To be digital to the core means you have to think about things such as open source, you have to re-architect your whole tech stack and you have to really think like a startup.

[Speaking to PBI in October 2017, she said DBS Bank had previously rolled out the 2.0 version of its iWealth app]. We have also rolled out internal digital operating systems to our internal staff.

On the iWealth app, we’ve enabled customers to do a lot more on the transactions part. In the past, you could acquire customers online and then STP it; but now one click on the system enables a customer to be upgraded from retail to private banking or wealth client. Now our customers can transact on equities, units trusts and foreign exchange seamlessly on the app.

We have linked the whole journey, for example, of buying and trading unit trusts.

Our digital investment has also made life very easy for RMs and the bank. For example, in the past when the RM goes to see a client, he had to print out data from [typically] four systems. Now it is all auto-populated for the RM and thus creates a bridge for the RM’s conversation with the client.

TSS: I call it the four Ds of what we are focusing on. The first D − the digitalisation journey continues; the second D − we will continue to use data as a source of truth and data as the new currency to help us.

This is the challenging part, in terms of finding the right data analytics to create a micro frame of the customer and be able to offer the customers the right product, at the right time and in the right way. The third D is the democratisation of wealth management. We believe that wealth management services don’t have to be just for the rich.

Finally, the fourth D I see is a domestication trend in Asia, that involves more and more money going back onshore because customers come from high-growth counties like Indonesia and China where there is a lot happening.

In the past, most of the rich from those markets invested that money and did very well, but now if there are opportunities onshore, they might go back onshore.

TSS: Blockchain is here to stay and will  continue to grow in relevance. However, I expect it will affect transaction banking and global transaction services more than private wealth and wealth management.

As the birth of cryptocurrencies becomes more relevant we are seeing that some of our investors are buying Bitcoin. If that’s what customers want to do, we are happy to look at it. The problem with Bitcoin right now is that the regulations are not clear, and I think regulators’ views are mixed on Bitcoin.

A lot of countries don’t like the notion of not being able to control their own policy, or governments may see it as a way to transact illegally [and] money laundering. If Bitcoin supports money laundering, the answer is no and it’s not worth the risk. But if it’s blockchain for the sake of having transparency in transactions in an efficient, cost-effective manner, why not?