BANKING ON DATA

Singapore banks juice up data drive to customise personal finance

Singapore

CALL it the next Spotify or Netflix - but for banking. Singapore banks are boosting their efforts in the game of amped-up customisation for retail customers. DBS is the latest to convert customer data into "hyper-personalised" recommendations for customers to manage their finances and investments, as a means of deepening customer engagement and fending off upcoming digital banking upstarts.

Among the features that Singapore's largest bank will roll out by the first quarter of 2021 are customised market insights based on customers' investments and behaviour, shortlists of stocks that align with customers' investment pattern, alerts on price movements of stocks, and the facility to pay monthly bills at a go.

With this shift to what the bank calls "intelligent banking", Sim S Lim, the bank's group head of Consumer Banking and Wealth Management, said that his aspiration is to hit 20 to 25 per cent growth in wealth and retail investment income.

He did not specify a time frame.

This comes as relationship managers get access to digital tools to better know their customers, and so become more productive, he added.

He estimated that the typical bank averages about 10 to 12 per cent in wealth and retail investment income growth year on year.

DBS intends to ride this surge in digital banking activity, which has not let up since the pandemic started early in the year, and even after circuit-breaker measures eased in June. Between June and August 2020, customer sign-ups for the DBS digibank mobile app spiked by 216 per cent year on year, with the bank's digital banking customers hitting a record high of 3.5 million. Meanwhile, the number of investment transactions made via DBS iWealth's mobile banking app tripled.

More customers also made the switch to transact online. During the same period, cash volumes plunged by 34 per cent from a year ago, compared with the average decline of 5 per cent from 2017 to 2019.

With digital banking here to stay, DBS is not letting up on its efforts in this arena, with the bank spending S$4.4 billion in technology expenditure in the past four years.

Some of its latest initiatives - its financial planning solution NAV Planner launched in April among them - have already helped over 1.1 million customers in Singapore and converted over 33,000 customers to net savers, said DBS in a statement.

Its alert system to automatically notify customers in the event of unusual or higher-than-normal bill payments has also resulted in an average of 48,000 customers per month benefiting from this between June and August 2020.

With Singapore's upcoming digital banks expected to give customers more digital offerings to choose from, DBS is not waiting around for competitors to eat its lunch.

Mr Lim said that it is important for DBS to stay ahead of the curve to ensure that its digital solutions not only meet customer needs, but also "anticipate them and actively offer solutions".

"Through our Intelligent Banking capabilities, we have been laser-focused on delivering helpful and actionable insights that guide customers to make more informed financial and investment decisions - decisions that are even more crucial amid today's uncertainties," he added.

Even as DBS doubles down on its use of data to engage customers, OCBC and UOB are also giving it a run for its money as Singapore's Big Three battle it out to proactively tailor-make personal finance offerings for customers.

OCBC has a financial insights tool known as Money In$ights, which was enhanced in August 2019 to provide "actionable insights" through push notifications to encourage customers to perform a task that helps them save more, earn more or manage their money better. The tool uses artificial intelligence and algorithms to deliver personalised insights based on OCBC's data, which is constantly refined and enhanced through the customer's banking engagements such as payments.

UOB launched its AI-driven digital banking service known as Mighty Insights last year, as part of its mobile banking app. It provides personalised insights based on customers' banking patterns to help them save and to spend more wisely. The bank also runs a mobile-only bank, TMRW, in Thailand and Indonesia, that is aimed at being the world's most engaging digital bank. UOB is, through TMRW, targeting a S$10 billion market opportunity in Asean by using predictive machine learning.

The bank has also extended personal insights to UOB's wealth management clients. For instance, through its robo-advisory investment app UOBAM (UOB Asset Management) Invest, it generates customised, dynamic investment portfolios that best suit the risk profile, financial goals and investment horizon of each client.