Banking Disrupted

by Piyush Gupta, Chief Executive Officer, DBS Bank.

In 2001, turning 40, I decided to leave banking and take the entrepreneurial plunge. It was the height of the boom, everyone was caught up with Internet fever, and it seemed like India could do with another portal. Together with some partners, I set up along with the Hindustan Times. In hindsight, the timing could not have been worse. Just five weeks later, the bubble burst and money from venture capitalist firms dried up.

It was not the end I had hoped, but the experience did an important thing for me. It freed me of my inhibitions, it took me off the treadmill, it created a sort of freedom in my thinking process and my decision-making that I did not have before.

While Internet 1.0 disrupted my life – for good and bad – the same cannot be said of its impact on banking, which I subsequently returned to. On banking, it barely made a dent. While a few online banks – Egg, HSBC, ING Direct – for example, were established, by and large, they did not pose any real threat to brick and mortar banking.

Just a little over 10 years on, the reality could not be more different.

Whether we know it or not, the digital revolution has put banks under siege. With Internet 2.0 and mobility, the game has been re-defined. Banks in Asia are on a burning platform of competition from mobile and internet companies. If we don’t embrace digital – and quickly – there is a real danger that our lunch will be eaten.

This pressure closing on us is precipitated by:

  1. Changing lifestyle habits. Today, consumers are spending more of their time online, on social media, smart phones and tablets. Studies indicate that some 50% of all mobile connections in the world are in Asia today. Between 2013 and 2017, the number of mobile connections will rise by 2 billion; of this, 1.4 billion will be from Asia. Indonesia, where DBS is the 4th largest wealth management provider, is the most active twitter country in the world, with 15 tweets per second. In India and China, two of our other key markets, there are 159 million and 634 million smartphone users respectively. If banks are to remain relevant, we need to better intersect with our customers’ lives, and alter the way we deliver banking.
  2. The explosion of data. Globally, there are 3.6 million emails sent every second, 126 hours of Youtube videos uploaded every minute, and 500 million tweets per day. Banks like us are already looking at ways to combine customer data with information drawn from these other sources to predict customer behaviour and offer more targeted offers. If harnessed right, Big Data presents a huge opportunity. On the flipside, since banks are an industry of information, of bits and bytes, we are also very easily digitisable. This puts our sector in the eye of the storm of the present digital revolution.
  3. Enroachment into our space by non-bank financial providers. Whether it’s Google, Apple, Facebook, or closer to home, Tencent or Alibaba, non-bank players are making incursions into our industry. The biggest payment company in the region today is not a bank; it’s Alipay. Nine months after entering the asset management business, Alibaba becamethe world’s fourth largest money market fund, with more than USD 80 billion in holdings and more than 80 million customers, all from a standing start.

The good news is I don’t believe any bank in Asia has had massive success around digital banking. This gives us a window to turn challenge into opportunity.

At DBS, we are also encouraged by our early successes. In May 2014, we launched DBS PayLah! This app allows our customers to transfer funds to others via their mobile phone with a few simple clicks, just by knowing the payee’s mobile number. Within six weeks of launch, DBS PayLah! has become the top finance app in Singapore in the iTunes store, with over 150,000 users.


 DBS HomeConnect, a mobile app we launched in 2013, allows homebuyers to find out the valuation of a property just by pointing their mobile device at it. This taps on augmented reality technology, and has proven popular with our customers. In fact, we have been named world’s best for mobile apps by a Swiss research firm MyPrivateBanking for two years in a row.

Earlier this year, we also announced two partnerships. The first is with IBM, whom we are working with, to use artificial intelligence to better provide wealth advice to our high-net worth clients.  The other partnership we have inked is with Singapore’s A*Star’s Institute for Infocomm Research. The partnership involves the establishment of a Joint Lab to conduct new research in data analytics, mobile technology, social platforms and other leading edge technologies.


 To further up the ante in this space, we have also announced plans to add to our annual SGD 600 million spend on technology each year. Over the next three years, we will be investing a further SGD 200 million to better harness digital technologies.

Beyond putting our money where our mouth is, the key to change is one of mindset. We have to shift from legacy to new ways of engagement.

Banks have been too distracted the last five years to act on the threat facing us. As an industry, we’ve been sidetracked by issues such as capital, liquidity and the global financial crisis. This has allowed our non-bank competitors to take advantage of our absence and gain a headstart.

It’s not all doom and gloom, and the shifting landscape presents opportunities for the nimble.   But time is running out, and we have to focus and respond very quickly.

After all, my firm belief is that in the future, people won’t need a bank, they need banking.

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