DBS transforms into Asian banking powerhouse
The world's economic centre of gravity is shifting eastwards, propelled by rapid urbanisation and industrialisation in Asia's developing countries. The economic shift is creating wealth in the region, opening up enormous opportunities for business and investments. Embodying the dynamism of the new Asia, DBS Bank has ascended to greater heights as one of a few institutions to have developed the organisational flexibility, financial strength and product capability to cater to the region's evolving financial needs.
The world's economic centre of gravity is shifting eastwards, propelled by rapid urbanisation and industrialisation in Asia's developing countries. The economic shift is creating wealth in the region, opening up enormous opportunities for business and investments. Embodying the dynamism of the new Asia, DBS Bank has ascended to greater heights as one of a few institutions to have developed the organisational flexibility, financial strength and product capability to cater to the region's evolving financial needs.
"We have focused our strategy to capitalise on the surging megatrends in the region," says Piyush Gupta, DBS Bank CEO. "In addition to a rising middle class and affluent population, there is a fundamental shift in consumption patterns as Asia is not just producing, but now consuming a lot more of its own production. Notably, it is becoming a more integrated Asia with burgeoning intraregional trade and capital flows. Here, DBS is uniquely placed as an intermediary in the growing regional connectivity."
Headquartered and listed in Singapore, DBS has been making strides since launching its "Living, Breathing Asia" position more than a decade ago. Under the dynamic leadership of Gupta, who took the helm in 2009, and with strong support from the board and a quality management team, DBS has undergone a transformative development into one of the biggest names in Asian banking through hard work, innovation and disciplined execution of strategy. As an Asia-centric commercial bank, DBS has outperformed local financial players through its reach and sophistication. Global banks, meanwhile, have to contend with DBS' deep understanding of the local culture and business environment.
Gupta also attributes the bank's leading position to its successful marriage of the best business practices from the East and West. "What we've built in DBS is quite unique because it relies on established, hard-core processes that are Western in the way they have been architected, while incorporating Asian values," Gupta says. "This has become our distinct brand of banking we call 'banking the Asian way'."
From pioneer to Asian powerhouse
Previously known as The Development Bank of Singapore, DBS was established in 1968 by the Singaporean government to help bolster the economy of the then newly independent city state. The bank played an important role in accelerating Singapore's industrialisation in the 1970s and 1980s by providing funding support to the manufacturing and processing industries and assisting in the establishment of new industries and the upgrade of existing ones.
Over the following decades, DBS progressively moved to the forefront of Singapore's financial services industry as a full-fledged universal bank. It made a number of key acquisitions over the years to extend its reach, notably its merger with Post Office Savings Bank in 1998. In July 2003, the present name was adopted to reflect DBS' changing role as a regional bank.
"Core to the value system of DBS has always been our strong sense of purpose," Gupta says. "This is deeply rooted in our DNA, being a part of Singapore's history and helping spark its transformation into one of the world's top financial hubs. When we think about banking the Asian way, it continues to be anchored in doing real things for real people. We believe in creating an impact beyond banking and playing a purposeful, positive role in the communities where we operate."
DBS is the largest bank in Singapore and Southeast Asia today, and it is carving a strong presence in Greater China and South Asia. The bank also has operations in Japan, South Korea, the United Arab Emirates, Britain and the United States to enable business and investment flows into Asia.
Using an extensive regional network spanning more than 280 branches across 18 markets, DBS has built market-dominant positions in the areas of consumer banking, wealth management and institutional banking. It seamlessly serves a range of customers, from business owners to affluent individuals, offering the most relevant products and services for their personal and business needs. DBS also customises bespoke solutions for small- and medium-sized enterprises (SMEs), large corporates and institutional investors to manage their financial risks.
Over the past five years, DBS has doubled earnings and increased income by almost 50 per cent amid a challenging global economic environment. DBS marked a new milestone last year with full-year profit surpassing S$4 billion (HK$22.6 billion) for the first time. Its record top and bottom lines are a testament to the resilience of the DBS franchise, which is underpinned by strong governance and risk management processes. Investors also agree that the bank has made significant progress. In December last year, DBS' share price hit a seven-year high despite concerns about plummeting oil prices. With its market capitalisation reaching more than S$50 billion, DBS is ranked as the 44th-largest bank in the world, up from 55th in 2008.
"We are a bank that proudly lives and breathes Asia, finding its value from being relationship-driven and having the humility to serve and the confidence to lead," Gupta says. "We look at innovation in a way that is relevant to our markets as opposed to something that we borrow from the West and connect to the fabric of Asia. These attributes resonate well with our corporate and consumer clients as shown by our solid financial performance."
Apart from its financial strength, DBS has earned numerous industry accolades, affirming its position as a regional banking leader. DBS has been named "Asia's Best Bank" by The Banker, a member of the Financial Times Group, and "Best Bank in Asia-Pacific" by New York-based magazine Global Finance. Acknowledging the bank's strong management, performance and high standards of corporate governance, DBS earned the gold award for Best Managed Board for large-cap companies at the Singapore Corporate Awards 2014.
DBS was also named the "Safest Bank in Asia" by Global Finance for six straight years, from 2009 to 2014. This high level of credibility corroborates the bank's AA- and Aa1 credit ratings, which are among the highest in Asia.
Strengthening regional footprint
DBS' primary exposure remains in its home market of Singapore, accounting for 62 per cent of group income last year. Operating as a universal bank, DBS is the market leader in the city state, serving about 4.5 million customers through more than 2,300 physical touchpoints, including branches and self-service machines.
Outside of Singapore, DBS is focused on three lines of business: the large corporate banking space to enable integration of the capital flows within the region, the SME business, and the affluent banking business. DBS has achieved tremendous momentum the last few years in SME and affluent banking, leveraging strengths from across its entire franchise to offer smart and holistic solutions to clients. With its one-bank structure, DBS comprehensively serves all customers' financial needs. This is accomplished by organisational links between customer segments (consumer, wealth, corporate and SME), product groups (treasury, transaction banking, capital markets and research) and market areas.
"We are able to execute the one-bank approach better than most of our competitors - whether it is linking our capital market business with the wealth business or connecting the SME business to the large corporates unit," Gupta says. DBS capitalises on this value proposition to deepen existing client relationships.
In the last two years, DBS has broadened its horizons in two important ways. The first reflects the digital trend, as technology is empowering more customers to conduct transactions electronically, especially in wealthy, technologically savvy Asia. The bank will scale up its presence in China, India and Indonesia using a digital platform instead of the brick-and-mortar strategy to expand its wealth, SME banking, transaction banking and treasury customer business. Seeing a shortage in capital in the Asian market over the next 10 years, DBS has decided to build up its fixed-income capital market business in order to support the region's continued growth. These initiatives are aimed at rebalancing DBS' geographic portfolio in order to better tap into Asia's astounding growth.
Shaping the future of banking
"Technology and regulatory reforms are dramatically changing the way people interact with banks," Gupta says. "With this, there is an opportunity to create a unique kind of banking - one that is relevant, easy and trustworthy. We try to capture these in what we call joyful banking, anchored in improved customer engagement and the use of digital technologies."
Last year, DBS earmarked S$200 million to accelerate its digital push. This is in addition to the S$1 billion allocated for strategic technology initiatives to strengthen its system security and digital infrastructure. One of its groundbreaking projects, in partnership with IBM, is centred on using artificial intelligence to provide contextualised and customised wealth advice to high-net-worth individuals. The specialised service is slated for introduction this year. Recent digital banking services rolled out by DBS include the iWealth wealth management platform, DBS PayLah! for transferring funds via mobile phones, and virtual opening of accounts for SMEs.
"In the future, people will not need the constant of a bank, but they'll need banking," Gupta says. "My vision is to make DBS invisible and embedded in people's lives in a way that is efficient and fun. If we can do that and manage the transition right, DBS is on its way to being a leading global bank."