If you can’t beat them, learn from them.
Big bosses at Singapore’s three largest banks are losing sleep over the rapid rise of financial technology startups in the city-state. Startups are unravelling the financial services value chain not only in Singapore but also across the region, and traditional lenders are scrambling to find way to minimize the damage wrought by their competitors.
“Fintech start-ups are beginning to attack various parts of the financial services value chain. In such an environment, our future success depends on our ability to harness the digital revolution and completely re-imagine the banking experience,” noted DBS Chairman Peter Seah and CEO Piyush Gupta in a letter to shareholders in the group's annual report.
“Fintechs are beginning to unravel the financial services value chain, and we need to be able to respond,” Seah and Gupta stated.
This sentiment was echoed by OCBC's Chairman Ooi Sang Kuang and Group CEO Samuel Tsien. In a similar letter to shareholders, they noted that the bank is closely watching the rise of fintech startups, as they have the ability to disrupt traditional banking practices.
In order to counter the rise of the startups, the lenders are rolling out initiatives to incorporate fintech into their operations.
For instance, OCBC established a new FinTech and innovation unit called The Open Vault, which will collaborate with startups to drive the formation of innovative business models and solutions.
Meanwhile, United Overseas Bank (UOB) set up The FinLab venture, which explores possibilities with FinTech startups through prototypes in payments and collections, wealth management, big data analytics and risk management.
As for DBS, the bank was first to incorporate hackathons into its talent development programme, where employees work with start-ups to create prototype mobile apps to address business problems.
"This enables them to gain exposure to the fintech culture, agile methodology and other digital working concepts. In all, the bank is running over 1,000 experiments, giving our people the exposure they need so we can innovate as a bank," Seah and Gupta noted.
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