In December 2020, the Monetary Authority of Singapore (MAS) announced four successful digital bank applications. Out of 14 eligible applicants, the four successful entities – a consortium comprising Singapore Telecommunications Ltd (Singtel) and Grab Holding Inc. (Grab), a consortium of Greenland Financial Holdings Group Co. Ltd, Linklogis Hong Kong Ltd, and Beijing Co-operative Equity Investment Fund Management Co. Ltd, Sea Limited, Ant Group Co. Ltd were expected to commence operations from early 2022.
Ravi Menon, the Managing Director of MAS, stated in his address that he expects these new entrants to thrive along Singapore’s incumbent banks and further elevate the industry’s bar in delivering quality financial services, especially to underserved individuals and businesses.
How did Singapore’s incumbent banks react? We explore in this article
DBS
In DBS Annual Report 2020, Jimmy Ng, the Chief Information Officer of DBS, reported that the bank moved from Virtual Private Cloud infrastructure to a hybrid multi- cloud model, bringing together the best of the private and public cloud platforms.
Through the Operations Processes and Platform Re-engineering programme, their process automation was accelerated to enable Straight-Through-Processing capability which then resulted in 8% productivity savings year-on-year.
When the pandemic hit, the bank configured chatbots to help customers to apply for Covid-19 relief measures during the circuit-breaker period. DBS also rolled out DBS DigiDocs to enable their corporate clients in Singapore, Taiwan, Hong Kong, and China to initiate transactions and submit supporting documents digitally.
The bank also assisted migrant workers through DBS digibank and POSB Jolly, so that these workers have uninterrupted access to banking services and transfer funds home, despite being in quarantine.
In another effort to digitalise its operations, DBS announced in January 2021 that it would cease issuing physical tokens on February 1. From April 1, customers are only allowed to use digital tokens to access DBS digibank services. Using a digital token would save customers the hassle of carrying their tokens around or having to replace the tokens when the battery runs out.
In April 2021, DBS also launched a new feature on its Artificial Intelligence (AI)-powered financial and retirement planning tool NAV Planner. Through this addition, customers will receive investment recommendations that are tailored to their investment profile.
Additionally, DBS also launched FIX Marketplace, another key effort by DBS in its effort to help digitalise capital markets in Asia. Although this would not be the target market of digital banks, this effort is reflective of DBS’ mission to embrace digitalisation throughout its entire operation. FIX Marketplace, described by DBS as the first fully digital and automated fixed income execution platform, provides issuers with a platform to directly connect with investors. The next phase of development will enable issuers to issue self-led digital bonds which can be listed on its DBS Digital Exchange (DDEx).
On 31 May 2021, DBS also priced a S$15 million digital bond in its first security token offering via DDEx. The DDEx was launched in December 2020 and forms part of an integrated digital asset ecosystem that leverages on blockchain technology and enables clients to raise funds from the private market on a secured platform. According to Eng-Kwok Seat Moey, the Group Head of Capital Markets, asset digitalisation via the issuance of Security Tokens can benefit corporates seeking to raise funds from Asia Pacific’s growing private capital markets.
UOB
In June 2021, UOB became the first bank in Singapore to pilot digital signature authorisation. The bank announced that it will be piloting the use of GovTech’s Sign with Singpass to confirm transactions or product applications via digital signatures and reported that this can reduce paper usage by two million forms. The one-year pilot will begin with a group of corporate and retail customers and the transactions involved in this pilot include forms for the PayNow Corporate application and individual wealth planning services. Sign with Singpass is part of Singapore’s Digital Identity Smart Nation strategic project to establish a trusted digital identity ecosystem for both private companies and public agencies, as well as citizens.
In the same month, the bank announced that it would invest more than S$200 million in digital innovation for the next three years. It also launched SimpleInvest, a new digital investment offering on the UOB Mighty banking app, where customers can invest from as low as S$100. The bank expects an increase in the number of its customers who carry out digital self-serve wealth transactions, from 10% to 25%, in the next two years.
UOB also encourages a culture of innovation with technology among its employees. One of the ways the bank does this is through a biennial event called AI-deathon, where employees can pitch ideas and build prototypes of artificial intelligence and data analytics solutions for the banking industry, from fraud detection to personalised marketing.
OCBC
Sunny Quek, the head of consumer financial services at OCBC, said that although digital banks are expected to ‘add some colour’ to the financial landscape, the environment is already a hyper-competitive one. He further adds that OCBC, which was established in Singapore way back in 1932, has already been embracing digitalisation.
On March 18, OCBC enabled face verification at eight of its ATMs around Singapore. Although this is limited to account balance enquiries, the bank hopes to progressively extend this for cash withdrawals at all of its ATMs. Account balance enquiries and cash withdrawals account for 80% of the bank’s ATM transactions. In its media release, the bank reports that OCBC is the first bank to tap the SingPass Face Verification system to securely verify customers. Once a customer’s scanned face is captured, it is matched and verified against Singapore’s national biometrics database that holds images of 4 million Singaporeans.
The bank had also previously introduced an alternative digital login in July 2020, where customers can use their SingPass to access digital banking services. This can help customers from having to keep track of multiple login IDs.
The bank also enabled QR cash withdrawals in July 2019, where customers can use the OCBC Pay Anyone application to scan a QR code on ATMs to withdraw cash. In the same media statement, the bank reported an 88% increase in the number of QR-code cash withdrawals from the same period in the previous year.
Featured image: Images from Wikipedia, Unsplash here and here
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