DBS and its traditional banking peers face the prospect of more domestic competition from technology firms after Singapore authorities announced plans to award digital banking licenses to non-banks.
Thursday 05, September 2019
DBS said that going digital doesn’t mean tearing down all the bricks and mortar, reported Bloomberg
Piyush Gupta, DBS Group Holdings’ CEO, said, “In addition to a fundamentally digital presence, we are beginning to figure you need some points of presence for the time being to create brand credibility and to service the last mile.”
Gupta will take that approach to his expansion in Asia, where Singapore-based DBS has been building online banking operations in India and Indonesia. He said he plans to do the same in other markets over the next few years.
“In India we established a subsidiary so we are creating more points of presence, there are more kiosks, booths, some basic branches,” says Gupta.
The U.K. and Hong Kong are among major economies that have allowed virtual lenders.
Gupta said DBS remains open to bolt-on acquisitions as part of its strategy of augmenting digital services with a physical presence. The bank’s 2017 acquisition of retail and wealth businesses from Australia & New Zealand Banking Group showed that if you take on physical assets and overlay the digital strategy “you can actually create value very quickly,” added Gupta.
As online services expand, DBS has seen foot traffic in its Singapore branches decline five per cent annually over the past few years, Gupta said.
“You still need some branches” to maintain branding and last-mile services, you certainly don’t need a branch distribution system for sales and engaging with customers at scale,” says Gupta.