Home DBS Group Holdings Ltd Annual Report 2001

The Consumer Comes First
Many banks operate around product-centric models. At DBS, however, the consumer is central to the operations of our Consumer Banking Group (CBG). This approach has enhanced CBGs 2001 performance.

CBGs focus in 2001 was on gaining and retaining customers, and growing a greater wallet share?through expanded and improved service. Through a we hear you?approach, the Group targeted the re-organising of service quality and delivery through improved convenience and accessibility, and greater efficiency and productivity. It continued to refine the Banks The Great Customer Experience?initiative by delivering the unexpected?in service, product, delivery and research.

Going the extra mile to meet its customers?needs, CBG came up with an innovative solution to a ubiquitous Singapore problem - queuing. The Bank hired queue combers of different age groups and language capabilities to help customers beat the queues.

A one-point call centre was opened under the Service Quality programme to provide customers with fast and direct service - via the Internet, telephone, facsimile and mail.

CBG operations are organised around the key customer segments and the banking needs of specific groups. Within the Group there are different specialists for retail financial advisory needs and those who cater to customers requiring the POSB brand of basic banking. There are personal relationship managers who service priority portfolios and others who address enterprise banking needs in the region. CBG offers an extensive suite of packaged financial solutions to meet individual customer requirements, based on their lifestyle and lifestage needs.top

Personal Banking (PEB) made significant contributions to the DBS franchise through a number of successful initiatives :

•  The expansion of its reach and customer base with over 120 road shows in 2001. It was also successful in helping the consumer take advantage of the Supplementary Retirement Scheme (SRS) where more than 6,000 SRS accounts - in excess of S$83 million - were opened with the Bank. This represents more than 50% of the market in terms of accounts and dollar contributions.
•  The launch of the CASHLINE and GROWTH ACCOUNT schemes to help customers manage the uncertainties of the economic downturn. CASHLINE, which offers the most competitive credit line in the market, signed on 26,500 customers while GROWTH ACCOUNT, targeting more conservative customers who prefer products in the deposit-like category, recorded sales of S$143 million in just one month.
•  The compilation of an exhaustive data base of each and every one of PEBs 4 million personal banking customers by lifestyle segmentation. To establish individual relationships with them, PEB introduced dedicated web pages and developed products and promotions addressing specific segment needs.
•  The launch of segment-specific customer care programmes such as the Health is Wealth?programme for senior citizens, the Thrift and Fitness?programme for primary school pupils and the Ladies Health Care?programme for women.
•  The S$1 million revitalisation of the POSB brand under the Two-Brands, One-Bank model, aimed at preserving and growing our considerable customer base. The POSB brand offers basic banking services, credit and debit cards, together with instant benefits and loyalty programmes such as Simple Pleasures. In the first four months of its launch, over 60,000 POSB Credit and Debit Cards were approved.

Enterprise Banking (EB) made substantial headway in managing the needs of the Small & Medium Enterprises (SMEs). It is not surprising then that one in two SMEs banks with DBS, and two-thirds of SMEs have been in a business relationship with DBS for five years. EBs customer-centric initiatives include:

•  The opening of additional Business Centres - three in 2001, bringing the network to five - strategically located near customers. This generated a 20% growth in loans-significantly higher than the single digit industry average - and the new customers?average per month increased by more than 50% between 2000 and 2001.
•  The launch of a dedicated Commercial Banking unit for SMEs with total turnover of less than S$1 million and credit facilities of less than S$250,000.
•  The launch of Trade Perks, a loyalty programme for corporate customers, rewarding them for the use of trade facilities.
•  The introduction of programmes designed to help customers ride the economic downturn. IMPRESS and MORE assist SMEs in managing cash flow and foreign exchange risks, while GROW extends loans to micro-businesses.
•  The launch of Singapores first Chinese SME banking website in September 2001 which has achieved almost half the access rate as that of the English version.

Card Services Singapore launched an aggressive marketing drive with the Roadster Campaign?to acquire new customers, reward existing customers for their loyalty, promote the use of DBS Credit Cards, and improve the card portfolio. Over 60,000 applications were received in the first six months of the campaign, surpassing market performance, and boosting the growth of the cards business despite the challenging economic environment.

DBS Cards outpaced the industry growth more than 1.5 times in terms of credit card billings and saw the growth of rollover balances in the year. This healthy growth was possible in part due to the implementation of key portfolio and usage initiatives such as balance transfer and the 0% interest instalment plan.top

Priority Banking investments in 2001 focused on strengthening of frontline and support teams to better serve their high net worth customers. A more comprehensive range of sophisticated products was launched to deepen relationship with their clients. Examples include an offering of specially-structured investment solutions such as Assure, Structured Notes, Equity Linked Notes and Twin Currency Notes, which have proven very popular, with sales surpassing expectations.

Leveraging on the Banks corporate sponsorship of world-renowned musical Miss Saigon? DBS Priority Banking customers were treated to exclusive previews at this musical, just one of many privileges that the Bank extends to them.top

Convenience and Accessibility
If awards were being conferred for enhanced convenience and accessibility performance, it would be a tough choice between Channels and the eSolutions Group. Together, they form the broadest banking network in Singapore with more than 1,000 touch points including DBS and POSB branches, Automatic Teller Machines (ATMs), Cash Deposit Machines (CAMs), the user-friendly Internet Banking, the Phone Banking and Direct Banking channels. The growing number of these touch points make the DBS franchise increasingly attractive and visible to customers.

CBG adopts a holistic and long-term approach in its product and service offerings. A case in point is the preparatory effort that goes into determining the location of an ATM. The Group projects as much as six years ahead through analysis of demographics and research studies on population, new towns and housing estates, as it fulfils the objective of locating ATMs where our customers live, work or shop.

•  CAMs grew from 22 machines in 2000 to 137 machines by Dec 2001, seeing an increase of transactions from 76,000 per month in 2000 to more than one million transactions per month at end 2001.
•  DBS has been successful in transforming customers?banking habits, largely attributed to the Banks comprehensive Self-Service Banking (SSB) customer education programmes that were introduced to emphasise benefits related to the use of new channels like the CAMs.
•  SSB programmes generated a 33% increase in usage, from an average of 3,000 transactions per month per machine to more than 4,000 transactions per month per machine. Average deposit value at the CAMs also grew to almost S$600 per transaction per month in 2001.
•  The use of CAMs to update passbooks escalated more than 21 times in six months - from 128 passbook update transactions per machine to 2,800 transactions per machine.
•  Average monthly transactions at the branch counter has decreased by 5%, generating cost savings of about S$10.3 million a year.

This extensive DBS network benefits not just customers, but also other business units of the Bank. Cards Services successfully managed to leverage on the strength of the Banks ATM and branch distribution network to drive a massive acquisition campaign. In 2001, the new distribution channels routed over 50% of the total new applications for credit cards. Sales referrals at branches increased steadily through new product launches and sales management programmes. Providing customers with precise, relevant financial information has driven more than 60% growth in the total investment sales from branches, as compared to 2000.top

Wealth Management Group
The ability to sell must be coupled with relevant and attractive investment solutions. DBS Asset Management (DBSAM) was the first to offer UP, a minimum return guaranteed fund in November 2000, with two more successful tranches in 2001, garnering over S$600 million of funds. During the year, DBSAM consolidated its position as the largest retail unit trust manager in Singapore, with S$2.4 billion Assets Under Management (AUM) under its belt, an increase of 60% over the previous year. Institutional AUM grew 15% to S$2.9 billion. Total AUM grew 33% to S$5.3 billion, which was an impressive feat considering the 13% decline in the MSCI World Index in 2001.

Significant Growth through Strategic Alliances
The year 2001 was a watershed year for the Wealth Management Group in the area of strategic alliances. These partnerships helped the Bank capture economies of scale, improve operational efficiency and enhance customer service through an expanded suite of products and services. They enabled the Bank to tap into the best-of-breed experience and expertise of its partners and provide customers with world-class products and services.

•  The biggest bancassurance transaction in Asia was the sale of Insurance Corporation of Singapore, a DBS insurance subsidiary, to CGNU plc. This paved the way for a CGNU and DBS bancassurance partnership. The gains from this partnership extend beyond Singapore as DBS intends to complete a similar transaction in Hong Kong. The Bank will implement a new bancassurance model across the region to consolidate its insurance activities, build its regional presence and leverage on its partners experience. Another spin-off from this partnership is the comprehensive suite of investment-linked and protection products that are being developed for the region.
POSB customers were able to gain access to a variety of investment and insurance products at branches. Sales of myChild?and Mortgage Shield?registered 26% growth over 2000, contributing S$16.8 million to sales.
•  The acquisition of a majority stake in Vickers Ballas Securities strengthened the Banks retail advisory and institutional brokerage businesses. The creation of DBS Vickers Securities marks another milestone in the Banks securities business. This merger has turned DBS Vickers Securities into a leading broker in Singapore and Hong Kong, with a significant regional franchise.
•  DBS forged a further strategic alliance with TD Waterhouse, the largest online broker in the world outside the US, giving our clients access to markets in Singapore, Hong Kong, the United States, Canada, Shanghai and Shenzhen. With one integrated account, customers can access multiproducts in multi-markets through multi-channels.
•  Through a consortium with the Singapore Exchange and OCBC Securities, a new JV called Asia Converge provides securities processing and settlement services to stockbrokers in Asia with state-of-the-art technology.
•  On the local front, DBS signed an exclusive agreement with NTUC FairPrice to provide convenient supermarket banking in some of the bigger and more strategic retail outlets. Nine POSB centres were opened at NTUC Fairprice outlets during the year.

eSolutions concluded a world-class deal when its Wireless Banking team, together with NETs and Nokia, bid successfully for government funding for a unique technological experiment involving wireless Public Key Infrastructure using dual chip handsets that can accommodate a second chip card containing the users private key for signing digital transactions. The first trial of its kind in Asia, it will take place in 2002.

The D2Pay scheme, an online direct debit payment solution allowing online shoppers to pay merchants via DBS Internet Banking, was launched in September 2000. In March 2001, D2Pay, together with the Singapore Ministry of Finance, launched online direct payment services on the e-citizen portal. Targeting government agencies, it has successfully developed the Government of Singapore as its most significant customer. DBS is also the first bank to offer debit facilities across a number of government bodies for 540 services on the portal.top

Private Banking exemplifies DBS?relentless quest for customer value creation and productivity through investment in technology and process re-engineering. Its one-toone marketing drive has created a dedicated, well-informed group of Relationship Managers (each servicing a maximum of 60 customers), supported by product advisory specialists based in Singapore, Hong Kong and Bangkok. Through personal contact, phone banking and the Internet, DBS offers its customers multi-channel access, ensuring that the Bank is conveniently available to them, at all times.

Private Bankings commitment to understanding the wealth management needs of Asian high net worth customers better than anyone, through rapidly improving salesforce productivity and effectiveness, are evident in its 2001 results.

•  Doubling of sales capacity during the year through recruitment of experienced bankers, and the addition of the full-scale Dao Heng Private Banking team. An onshore physical presence in Thailand and Hong Kong, showcases new premises investments during 2001, and the growth of local teams of relationship managers and product advisory professionals in both locations.
•  High double-digit growth in Revenue, in AUM and in fee-based income during 2001 has made DBS one of the fastest growing Private Banks in the world. With the combination of Dao Heng Private Banking team accelerating this rapid growth in scale, DBS has established itself firmly in the first tier of Private Banks doing business in Asia.
•  A modern FX Margin trading system was installed in the first quarter of 2001 to support trading currencies and options, backed by pro-active FX-advisory servicing by one of Asias strongest Treasury & Markets teams. Web-based asset allocation, integrated with Customer Relationship Management (CRM) was launched in the second quarter.
•  A consolidated customer statement providing a single comprehensive summary of holdings and transactions was introduced in the third quarter of 2001, replacing individual statements in six areas of operations.
•  A Singapore booking centre for Trust and Estate Planning was launched early in 2001. Together with an existing Channel Islands Trust booking centre, DBS now offers an unbeatable combination of tailor-made solutions to satisfy the needs of high net worth clients for the global protection of their families?assets.

CBG honed the Banks competitive edge in the market with customer data mining to help business units target specific customer segments. It not only strengthened the Two Brands, One-Bank concept, but also ensured greater efficiency and clarity in identifying customer needs while delivering a better customer experience.

The Consumer Credit Group centralised and automated its collection strategy for all products in 2001. This was enhanced with a proactive, delinquency-based approach to collection. The Group also achieved faster turnaround times and better credit controls with the development of scoring for cards and loans applications.

In conclusion, 2001 was a good year for the Consumer Banking Group because it was a good year for DBS customers. Frank Benjamin, CEO of FJ Benjamin summed it up in a simple statement, DBS has come through for us many times, both during the 1998 currency crisis and in the recent recession.?Indeed, the Consumer Banking Group has delivered on all its promises. It will continue to do so.top

The Customers?Preferred Bank
• Investment Sales of S$1.9 billion, up 81% from 2000.
• DBS Asset Management consolidated its position as the largest retail unit trust manager in Singapore with S$2.4 billion assets under management (AUM). Institutional AUM grew 15% to S$2.9 billion. Total AUM increased 33% from S$4 billion to S$5.3 billion.
• Unit Trust sales of S$1.3 billion - a 22% growth over 2000 - and a 41% market share of all Unit Trusts sold in 2001.
• Market leader in S$ Personal Deposits with 59.8% market share.
• Leading provider of Residential Mortgages with 34.6% market share.
• Over 50% market share in terms of SRS accounts (in excess of 6,000) with contributions of S$83 million.
• Leading manager of low risk funds (Guaranteed and Money Market Funds) in Singapore for 2001.
• POSB Simple Pleasures?Programme ranked among the Top 10 Most Innovative Ideas in 2001?list by The Straits Times. Merchant sales surged five fold.
• One in two SMEs and 43 of the Enterprise 50 Award winners in 2001 bank with DBS.
Growing in Strength
• DBS Vickers now a leading securities group in Singapore and Hong Kong, with a significant regional franchise.
• DBS is the leading issuer of cards in the region, moving from the third to the second position in Singapore and to third in the Hong Kong market. By the end of 2001, the Banks card base soared from 359,000 to 1.3 million and market share for credit card holders in Singapore stood at 16.1%, an increase from 14.6% in 2000.
• The sale of Insurance Corporation of Singapore to CGNU in July for S$375 million set a record for the largest bancassurance transaction in Asia.
• More than 1,000 customer touch-points were established, with modern branches in strategic locations, serving over 4 million customers in Singapore.

Unbeatable Volumes
• Each month, an average 6 million transactions migrated to Self Service Banking representing a 5% decrease in counter traffic.
• Through property developers and marketing agents, the Bank reached out to larger numbers of customers with a sales presence at more than 90% of the real estate launches.
• Through pro-active public education programmes, and the switch from counter to cash deposit machines, transactions exceeded 1 million in December 2001, in stark contrast to the 76,000 transactions recorded at beginning of the year.
• Internet banking base recorded a strong growth of 50% increase in 2001 over the previous year with more than 320,000 users.
• Usage of the internet banking service increased by almost 100%, with a record high of S$5.7 billion worth of financial transactions performed in 2001.



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Consumer Banking Group
Investment Banking Group
Treasury & Markets
“ It gives me great satisfaction to be empowered. Im now able to respond to the needs of customers immediately and in a manner theyre comfortable with.”
Malti Sharma
Customer Service Officer
DBS Shenton Way Branch
“ Im very motivated and energised by the exciting things that are happening to make this a greater Bank. As part of the product development and marketing team, my colleagues and I are constantly evaluating customers?growing needs to find the best answers to meet these needs. We want to provide the greatestcustomer experience - be it through doing things differently, fashioning new product solutions or forming new partnerships.”
Wong Teck Khim
Wealth Management Group
“ How often does one get the opportunity to impact someone elses lifestyle? In my case, everyday - with internet technology.”
Yvonne Cheong
eSolutions Group - Emerging Channels
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