POSTED 8 Jul 2019 - 10:47

How do you see the impact of digital banks in Singapore?

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What potential risks should we watch for?

Top Response

Sanjay K Deshmukh, VP and MD, SEAK, VMware Singapore Pte Ltd

The new digital bank licences mark the next chapter in Singapore's banking liberalisation journey and a great forward-thinking step that can create an innovative, resilient and competitive environment while maintaining trust and stability - hallmarks of the Singapore banking system.



Naveen Menon, President, ASEAN Cisco
8 Jul 2019 - 10:52

Radical transformation has been taking place in banking for the past decade. Cisco has enabled customer-driven innovation from e-banking, multichannel integration, omni-channel strategies and now the Internet of Everything. As digital banks become a reality, there are three clear areas of disruption ahead.

Firstly, the delivery of intelligent customer engagement. Online interactions provide banks invaluable data-driven insights to cultivate stronger and deeper customer relationships which can help them generate new revenue streams. As Singaporeans change the way we shop, pay our bills and manage our finances, traditional banks must regain their relevance by taking advantage of new technology to evolve their customer relationships. This means transforming the bank branch of the future to create a retail-like experience that achieves customer delight.

User experience will not only take centrestage in B2C banking but also in B2B banking as low-touch, high-impact models yield a higher return on equity. This presents enormous opportunities across multiple demographics and levels of technology adoption.

John Lee, Country CEO, Maybank Singapore
8 Jul 2019 - 10:51

Singapore is at the forefront of digitalising its economy through its Smart Nation initiatives. Hence, the offering of new digital banking licences is not surprising given other countries have also issued such licences. Digital banks will rev up competition, and competition accelerates continuous improvements and upgrades, which ultimately benefits the consumers. Incumbent banks, like Maybank, welcome this competition to spur more innovations and provide better service to consumers.

At Maybank, we have a holistic digital strategy in place that leverages our existing strengths to enhance our competitive edge by building new digital capabilities, as well as capturing new opportunities aligned with industry-driven initiatives. We believe that trust and relationship-building remain the two most important drivers of banking services, which digital banks would have to establish beyond being innovative and offering cheaper price.

Yeoh Oon Jin, Executive Chairman, PwC Singapore
8 Jul 2019 - 10:50

If successfully implemented, the digital banks regime will broaden the existing financial system in Singapore. Niche customer pain points can be addressed in a sustainable manner through innovative technology platforms. An example is SMEs' demand for speedier and cheaper loans. With new players, consumer demands are likely to be responded to more quickly. Digital banks can also rapidly scale up to capitalise on further liberalisation of the sector in the Asean region. However, there are risks. Fortunately, these risks have largely been factored into the evaluation criteria of these digital banks such as irresponsible pricing for short-term customer acquisition, unsustainable business models that leave customers stranded, etc.

Jayaprakash Jagateesan, Chief Executive Officer, RHT Holdings Pte Ltd
8 Jul 2019 - 10:50

The impact may only be incremental if new digital banks simply compete on cost to get customers in a well-banked market to switch over without really offering innovative solutions.

Through the course of RHT Holdings' business in financial services and technology, we understand that businesses and individuals are not just looking for digitalised banking services. They need an encompassing, integrated and coordinated system that enables low-cost and user-friendly transactions. If digital banks become solely focused on gaining market share and slashing costs, we risk missing an opportunity to achieve true digital banking which should not only be cashless, but also paperless, plastic-free and hassle-free.

Lionel Lim, VP and MD, APAC and Japan Pivotal
8 Jul 2019 - 10:49

Digital banking will open a plethora of opportunities and new features for consumers and businesses who now expect to transact round-the-clock. What is imperative is how digital banks can deliver services that are both seamless and secure. Traditional cybersecurity methods are losing their effectiveness and organisations must relook at how cybersecurity is approached. With security breaches getting increasingly costly, digital banks need to establish modern platforms and culture. This means adopting agile methodologies, revamping architectural approach, and tighter collaborations between IT and operations teams. Those that achieve these will enjoy reduced downtime, time-to-market and ultimately, better user experiences.

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Edmund Sim, Founder and CEO, Credit Culture
8 Jul 2019 - 10:49

The digitalisation of banking solutions is inevitable, and the issuance of these digital banking licences is a step closer to this eventuality. Fintech solutions in the personal lending space have already shown that improved and streamlined processes can result in a reduction of manpower overheads by more than 600 per cent. The challenge for digital banks will be in attracting and growing the customer base to a sizeable scale. Digital banks must be prepared to pass on those savings from overheads to consumers as well as widen the pool to allow other underserved audiences access to funds for that to happen. If the balance is right, such banks can contribute to greater financial inclusion with lower operating costs and the ability to serve those not typically served by traditional banks.

Victor Mills, Chief Executive, Singapore International Chamber of Commerce
8 Jul 2019 - 10:48

The impact will be positive. The new digital banks will be innovative and will create more consumer choice adding a new dimension to banking in Singapore. Digital and non-digital banks will learn from one another. They will do so by competing, collaborating, and by partnering. We can expect a slew of interesting product offerings. With the Monetary Authority of Singapore standing guard to protect a vital sector of our economy, you can be sure risks will be well managed and the new players well regulated. The MAS and all banks know you can't ignore technological advances. You must embrace them or face irrelevance.

Cheung Pui Yuen, Chief Executive Officer, Deloitte Singapore
8 Jul 2019 - 10:48

We expect digital banks to come up with innovative products and delivery channels to serve Singapore and its people. The key for digital banks is to identify unmet needs and address them. When they succeed, they will move Singapore closer to its Smart Nation vision.

Digital banks will also give the traditional banks some healthy competition, and push them to continue with their digital transformations. From a consumer perspective, people can look forward to innovation and more seamless delivery in terms of products and services as both the digital and traditional banks compete for their wallet share.

Digital banks, with their lower cost base and more efficient operations, can also potentially reduce transaction costs for consumers. Given the nature of digital banks, technology, data as well as money laundering and terrorist financing risks would be areas of focus. Digital banks must show that they can manage these risks well, to meet regulatory expectations and win their customers' trust.


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