DBS embracing technology can become Singapore’s Ant Financial

An employee, left, assists a customer inside the DBS Group Holdings Ltd. flagship bank branch in Singapore, on Thursday, Aug. 3, 2017. Photographer: Ore Huiying/Bloomberg

Forget the lending book. Dismiss the wealth-management aspirations. It’s DBS Group Holdings Ltd.’s embrace of technology that could be the next big driver of shareholder returns at Southeast Asia’s biggest lender.

DBS’s announcement Thursday that it now has the world’s largest application programming interface platform for banking, with users including McDonald Corp., may appear at first like marketing gimmickry. Being able to use the bank’s Paylah app to buy a burger is hardly revolutionary.

Yet going down the API route may be smart. By throwing itself open to third-party developers, DBS is no longer constrained by its own imagination. Letting people play with the building blocks means it loses nothing by being the banking engine for lots of dud fintech ideas. However, if a partner succeeds, DBS scores big.

To see how, consider Qudian Inc., a Chinese online micro-lender that had a successful IPO in New York last month. Qudian gets to make tens of millions of small, short-term loans by simply being part of the Alipay app network from which it gets its customers, as well as their credit scores. In return, Ant Financial, the banking affiliate of Alibaba Group Holding Ltd., gets 9 percent of Qudian’s interest income.

By fashioning itself as Singapore’s Ant, DBS could one day be offering a third-party robot wealth-advisory solution that competes with its in-house DBS Treasures offering. It might even want to own a part of such successful rivals.

Singapore has decided to relax the strict anti-commingling laws it imposed after the Asian financial crisis. Back then, the city-state’s regulators wanted to prevent banks from piling up risks by getting into other businesses. Now, the thinking is changing.

Technology is shrinking lenders’ traditional moat. The U.K. has set up Open Banking, whose goal is to enable customers to take control of their financial data and share it with organisations other than their banks. Back in Singapore, the flexibility to invest as much as 10 percent of shareholders’ funds in permissible non-financial businesses is one more reason for DBS to make some unconventional moves.

Shareholder returns, which haven’t gone anywhere for the past 20 years for Singaporean banks, could use some out-of-the-box bets.

As DBS CEO Piyush Gupta competes with Alibaba’s Jack Ma for dominance of payments in Southeast Asia, it’s time perhaps for him build his own ant colony. Or at least an Ant-like colony of many industrious partners.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.