Why It Matters

Going digital pays off

Efforts to go digital are slowly but surely paying off for the three local banks, given their positive first-quarter results.

Not only has digitalisation opened up more avenues for the financial institutions to capture customers, but it also improves efficiency and cost managing.

OCBC chief executive Samuel Tsien said on Tuesday that going digital has certainly helped as it takes care of all the detailed, repetitive work that would otherwise be handled by humans.

He also stressed the importance of using technology to "expand our channels to reach our customers and for them to reach us".

The results are telling. Mr Tsien noted that last year, 12 per cent of its popular 360 accounts were opened online, and half of unit trust sales done through its electronic channel.

For remittances, which he deemed "even more impressive", 70 per cent is done online, significantly reducing costs as digital does away with paper or over-the-counter methods.

United Overseas Bank invested nearly $700 million in information technology from 2014 to last year, including investments in payments and data initiatives, as well as to address regulatory changes.

It noted a 26 per cent increase in online sales applications in the first quarter compared with the same period last year, and the number of deposit accounts opened online soared 80 per cent.

DBS chief executive Piyush Gupta also declared several opportunities in going digital, such as greater distribution and reach, existing customers doing more business with the lender, and new products like its DBS Remit, which "digitally transfers money across 10 corridors in Asia now in three seconds".

The digital transformation of platforms and processes translates to a better customer experience and possibly more loyal consumers, giving a boost to the wealth management business, a major growth driver for local banks today.

Correction note: In our earlier story, we said United Overseas Bank invested nearly $700 million in information technology from 2013 to last year. UOB has clarified that it should be from 2014 to last year. 

A version of this article appeared in the print edition of The Straits Times on May 11, 2017, with the headline 'Going digital pays off'. Print Edition | Subscribe