Piyush Gupta: In the past five years, our transformation strategy was based on three pillars. The first was the technology architecture, which essentially meant a heavy reliance on building and on-premises cloud architecture; on using an API architecture for easy connectivity both internally and externally. The second pillar of our strategy was to focus on the customer-journey thinking, and really learning how to embed ourselves in the customer’s processes. And the third part of our transformation was really trying to create a culture of a startup—so being agile, being a learning organization, experimenting at scale, et cetera.

Truth be told, Covid revealed that our strategy and the progress we made was extremely helpful. But it has also proven to be an opportunity to a double down on many parts of the strategy and other things we need to do, as well.

Now, one thing we realized is that even though we had a lot of technology in place, in many cases we were about 90% there. But when it comes to a Covid kind of situation, you realize 90% is not good enough. 

Gupta: From a pure health and economic or macroeconomic standpoint, I think North Asia has actually handled the pandemic well. China got the pandemic under control, and the Chinese economy is recovering more strongly than any other economy in the system. Taiwan has been very strong. In fact, Taiwan did not see a slowdown at all, partly because it’s a tech-dominated country. Korea had a little bit of an up and down. But IT has recovered, and Korea’s numbers are looking very good, so that’s very strong. The problem is Southeast Asia and South Asia. First of all, the capacities of the various healthcare systems were not that strong. The capacity to test and trace was not that strong. And unfortunately, the fiscal positions are not that strong.

The other issue is sectoral differences. Many cross-border sectors—tourism, hospitality, leisure, business travel, conventions—are going to suffer for a fairly extended point of time, even in North Asia.

The governments have thrown a lot of money at the problem, so they’re maintaining jobs and they’re protecting people. A large swath of small and medium-size enterprises have been given lifelines, but the lifelines won’t last. You’ll see the cliff effect when the government largesse runs out. 

It isn’t going to be a quick recovery. Next year might look good in the GDP aggregate because the year-to-year comparison will look good. But I don't see the region recovering to all levels of demand—and therefore GDP levels—for at least another two years. 

Gupta: We’re not changing our geographic strategy. We are an Asian commercial bank, which means that we have to be in China, we have to be in Indonesia, we have to be in India, we have to be in the big countries in our region. And you have to recognize that you have to play the long game. This is the reality of emerging markets. If you have the capacity, the risk appetite and the fortitude to play the long game, you’ll do okay. But if you go in and out of the market every time there’s a short-term problem, you can’t build a franchise.

Many Western institutions, particularly European banks, do a stop/start. They come in, run through a two-year cycle, and when things are bad, they exit. Three, four years later, they want to come in again. That's a hard way to build a business. So we’re not changing our geographic agenda. 

Gupta: I’m convinced that one of the big things coming out of this pandemic is a much greater focus on ESG [environmental, social, and corporate governance factors]. And within ESG, there’s going to be a much bigger focus on the S part of ESG, the social issues. Because anybody has seen, through the pandemic, that inequality issues all come to the fore. So the issue of trust is going to be big.

Something else that sort of came from Covid but not entirely, is much greater reliance on distributed ledger. Right in the middle of the Covid, there were some really large cases of trade-finance fraud. Blockchain technology and distributed ledger can actually resolve that. So we are now doubling down on our efforts to use blockchain for these kinds of use cases—authenticity and verification.

There are some other changes that are not directly linked to our digital strategy, but came out of Covid. One is geopolitics: China/US issues are going to be a big game-changer, especially in our part of the world. If you’re sitting in Southeast Asia, you’re sort of caught between two elephants dancing. You’ve got to figure out how you play with both of them without getting trampled. 

Gupta: I'm not in the camp with some people that big offices are dead and people are going to work remotely for the rest of their lives. We human beings are social creatures; we want to get together. But without a doubt, people want more flexibility. There's no reason, over the next year or two, why I can't have somebody sitting in Israel and somebody sitting in Silicon Valley all working on my staff. Rethinking working models and talent and sourcing strategies is another big shift that will come out of this pandemic.

Gupta: Internally, we used data analytics to figure out contact tracing within the company. When we had our first infection on February 13, we immediately put in place—within four hours—an AI tool to predict employees’ first degree of contacts, second, third degree of contacts, etc.  

A second example: Governments in most of our markets implemented moratorium schemes during the pandemic, like suspending small-business loan repayments. But at some stage, this will come to an end and then we will see a big cliff effect when people suddenly have to start paying again. We are using big data and analytics to predict which customers are most likely to have trouble at that point—then we can hand-hold and help these customers ahead of time. 

Gupta: The rich/poor divide is going to be uppermost in the minds of governments and people over the next five, ten years. We have to make sure we’re being responsible and doing the right thing. In the pandemic, for example, Singapore generally did a good job controlling Covid, except for its migrant worker population—about a million people from Indonesia, Myanmar, India and Bangladesh who live in dormitories. As widely reported, Covid went viral in those dormitories, and when it did, the government locked them down. But when they did, there was suddenly no way for many workers to access cash and transfer money back to their families in Indonesia or Bangladesh. Many didn't even have bank accounts—they were receiving cash payments.

We put ATMs in all the dorms for the people who still needed cash. We opened 40,000 accounts over a single weekend, and with those 40,000 accounts, we also provided a simple digital tool for workers to transfer money easily into their home country. Life suddenly became a lot more convenient.

Gupta: Normally, wealth management is for rich people. The threshold is often a million dollars or more in investable assets. But during the pandemic, as interest rates collapsed, it became clear that the mass-market customers also needed simplified wealth management tools. They want to be able to sit at home and do some basic equity trading, with a simplified portfolio to allocate money into. So we digitized all of that. We opened up 28,000 equity trading accounts in one month. We created very simple portfolios, called digiPortfolio, where we provide simple risk-free products and also a budgeting and planning tool called NAV. One million people downloaded it within six months. I call that democratizing wealth management.