Consumer Banking/ Wealth Management
“We believe that companies such as ours can contribute towards a more equitable world: from empowering our customers in their everyday decision-making with hyper-personalised insights, to providing more ways to give back to those in need.”
Sim S Lim
Consumer Banking/ Wealth Management
In a tumultuous year with near-zero interest rates, Consumer Banking/ Wealth Management achieved robust results. We doubled down on our digitalisation agenda and accelerated the completion of “last mile” initiatives. Leveraging our digital channels, we continued to deliver seamless and end-to-end services to our customers amid the pandemic. We also pivoted quickly to roll out new ways of serving our customers and introduced measures to support affected communities.
Consumer Banking/ Wealth Management remains resilient amid challenging environment
Despite headwinds in 2020, we were able to deliver sustained earnings for Consumer Banking/ Wealth Management even as we almost doubled our provisions to shore up our balance sheet against potential risks arising from the pandemic. Our total income came in at SGD 5.77 billion, a fall of 8% against last year while strong cost discipline kept our expenses flat. Net profit before tax fell 27% to SGD 2.02 billion.
Net interest income fell 17% to SGD 3.34 billion amid headwinds from the prolonged lower interest rate environment and Covid-19. Card income was impacted by a drop in retail and travel-related spending, but we were able to maintain or grow our market share across Singapore, Hong Kong, Indonesia and Taiwan. Singapore’s property market transactions picked up towards the second half of the year and we maintained our leading mortgage market share. With the external environment in mind, we deliberately slowed our lending in the unsecured space and are keeping an eye on delinquencies, which have risen in Indonesia and other markets. We remain confident however, that consumer finance is the right space to be in and have built up partnerships in China and Taiwan to scale up this business in 2021.
Non-interest income rose 7% to SGD 2.43 billion as higher investment fees offset the drop in bancassurance and cards. Investments registered a record growth of 13%, hitting more than SGD 1.94 billion in income. Although bancassurance saw industry-wide impact due to safe-distancing measures, we were able to maintain our lead in market share for new business. We also introduced new general insurance solutions that better met customers’ new needs, such as staycations, work-from-home offerings, and healthcare coverage for gig economy workers.
We continue to solidify our companion app proposition in Singapore, where every customer will only require two apps to access our full range of services – using DBS digibank or DBS iWealth to bank and DBS PayLah! for all other services. DBS PayLah!’s 1.9 million users can now use the platform to book movie tickets and rides, pay bills and transport expenses, access card rewards, and scan to pay at more than 180,000 acceptance points.
Wealth Management: Growth trajectory continues
Our wealth franchise, representing 20% of group income, continued to grow. AUM rose 7% to SGD 264 billion, though income fell 7% to SGD 2.87 billion.
Despite widespread market volatility, our flagship investment portfolio – the DBS Chief Investment Office Barbell Strategy Portfolio – consistently outperformed its composite benchmark. Designed to capitalise on long-term growth trends while mitigating short-term volatility, the portfolio’s strategy became particularly relevant in 2020. More than SGD 1.9 billion of discretionary assets under management in DBS Private Bank today reference this strategy.
We also continued to create wealth investment solutions within the environmental, social and governance (ESG) space. In October, we launched a new tranche of our MSCI EM Asia ESG Leaders Outperformance Trade (ESG Outperformance Trade). This follows a successful run of our first ESG Outperformance Trade, which was the first of its kind in Asia when introduced in 2018 and raised SGD 95 million. The 2020 relaunch was hugely successful and raised over SGD 670 million in two months.
DBS iWealth, our digital wealth management platform, was named “Global no. 1 wealth mobile app” by Cutter Research for the third year running. We also introduced smart triggers that provide personalised investment insights and prompts, powered by Artificial Intelligence (AI) and Machine Learning (ML), to wealth customers via DBS iWealth. The early digital foundation we laid over the past few years paid off when customers collectively turned to DBS iWealth for self-directed trades during Covid-19. Revenues from these investments in Singapore and Hong Kong more than doubled, and online investment transactions in both markets tripled.
Our wealth management business was also recognised in 2020 as “Outstanding Private Bank - Global”, “Best Private Bank for Use of Technology” and “Best Private Bank - Asia- Pacific” by Global Finance.
Our family office business saw strong growth, as Covid-19 and geopolitical uncertainties sparked succession planning and wealth preservation concerns among the world’s wealthy. With Singapore establishing itself as a family office hub of choice and a safe, stable gateway to Asia’s opportunities, we are well-positioned to capture growing interest from these families.
Consumer Banking: Invisible, intuitive and intelligent services for all
As the pandemic spread, customers turned en masse to digital channels. As the world’s leading digital bank, we were well-placed to capitalise on this shift. We witnessed an unprecedented surge in digital adoption across the region, with digital financial transactions showing double- digit growth. In April, we launched TeleAdvisory, a service allowing clients to consult our wealth planning managers via video-conferencing platforms, to replace face-to-face interactions in Singapore. 17,000 TeleAdvisory consultations have since been completed. In India, we launched the Voice & Virtual channel which remotely assists our wealth customers. The channel now averages 5,000 conversations per month. DBS Remit saw exceptional growth, with remittance volumes rising 38%. From Singapore, customers can remit to 49 markets in 17 currencies, on a near real-time or same- day basis. DBS Remit is also available to customers in Hong Kong, India and Indonesia.
We also doubled down on implementing our AI and ML-powered Intelligent Banking capabilities across our digital services. The capabilities combine predictive analytics and customer-centric design to transform data into hyper-personalised, intuitive insights that simplify the way customers manage their finances. In 2020, we generated 13 million Intelligent Banking insights a month, helping customers improve their financial planning, uncover blind spots, and make timely investments. These insights have been rolled out in Singapore and to one million digibank customers in India.
In April, we launched one of the world’s most advanced financial planning solutions: DBS NAV Planner. The solution leverages tech to democratise financial planning, helping all Singapore residents better manage their money and grow their wealth. Customers can use DBS NAV Planner to track, protect and grow their money with personalised and actionable insights powered by more than 100 AI models, and more than 30 million financial planning insights have since been delivered. The solution’s capabilities were supercharged with the launch of SGFinDex, the world’s first public-private open banking initiative in December, allowing us to widen our reach. DBS NAV Planner now has two million users.
In November, the Reserve Bank of India approved the amalgamation of Lakshmi Vilas Bank with DBS Bank India Limited. The amalgamation complements DBS’ digibank strategy with an expanded network of 600 branches and 1,000 ATMs, and an additional two million retail customers as well as a strengthened deposit franchise. We see the expanded branch network and larger retail customer base – where we can overlay our world-class digital banking and build a sticky deposit base – as value enhancing.
We also continue to ramp up and solidify our ecosystem partnerships to provide customers seamless access to everyday services. In 2020, we integrated partners such as ComfortDelGro, FavePay, Gojek, Temasek Foundation’s StayMasked, WhyQ into our DBS PayLah! platform.
Providing support to affected communities
When the pandemic hit, we immediately rolled out support measures to affected communities. In February, we worked with Chubb to provide complimentary Covid-19 insurance coverage across four markets, and more than one million customers and their family members signed up. We also enabled some 7,200 homeowners in Singapore and Hong Kong to defer mortgage repayments. In Singapore, we partnered 88Tuition to provide free online supplementary classes to 850 students.
When Singapore implemented a lockdown, migrant worker employers realised that all transactions had to go digital, including salary distribution, remittances and phone card top-ups. This accelerated the registration of digital bank accounts for migrant workers. From April to June, we processed almost 60,000 accounts, being the only bank able to provide end-to-end digital account opening for migrant workers, by working with Singapore’s Ministry of Manpower.
What we look forward to in 2021
The sweeping changes and upheavals brought forth in 2020 will continue to spill over to 2021. Digital adoption accelerated across the world and consumer habits saw a seismic shift. We believe that companies such as ours can contribute towards a more equitable world: from empowering our customers in their everyday decision-making with hyper- personalised insights, to providing more ways to give back to those in need. In 2021, we will continue to grow our business with purpose and prove that we can do good and do well.
Sim S Lim
Consumer Banking/ Wealth Management
DBS Group Holdings
2021 Focus Areas
Accelerate ‘phygital’ agenda by doubling down on AI/ ML capabilities and branch transformation initiatives
Build on wealth business growth momentum by leveraging digital capabilities, capturing market opportunities and championing ESG
Leverage open banking and ecosystem partnerships to provide inclusive, intuitive and invisible services