Advertisement at a DBS Group Holdings Ltd. bank branch in Singapore, on Wednesday, Feb. 7, 2024. DBS's fourth-quarter profit came in short of analyst expectations amid signs of pressure on margins. Photographer: Suhaimi Abdullah/Bloomberg
SINGAPORE: DBS Bank is eyeing a larger slice of Asia’s burgeoning mass affluent market as it aims to bring its digital financial planning solutions to customers in the region.
Shee Tse Koon, group head of DBS’ consumer banking group and wealth management, told The Straits Times that the plan is to quadruple the number of mass affluent individual investors who can access the bank’s financial advice and solutions in its markets by 2026.
There has been a clear shift of wealth to Asia, which has benefited from a flight to safety amid geopolitical tensions and the recent banking sector turmoil in the United States and Europe, he said.
Investors are also seeking opportunities in the region, where customers are becoming more affluent in line with rapid economic growth.
“It’s no longer just about the ultra-high net worth; there are more and more people getting wealthier and wealthier,” said Shee, who took on his current role in April 2023 and was previously DBS’ country head for Singapore.
The bank’s customers here can access its digital financial planning tool, which was previously called Nav Planner, via their digibank app’s Plan tab. They can use the app’s features to map out their finances in areas such as savings, investments, insurance and retirement planning.
Launched in 2020, the tool leverages artificial intelligence and machine learning to give advice to users based on their financial data and risk profile, and offer personalised suggestions on how to invest and manage their money.
Shee said DBS will soon be rolling out similar digital financial advisory solutions to customers in its overseas markets via the bank’s respective apps and platforms there.
Singapore customers can also use the national SGFinDex digital service to pool their financial information from public agencies and other financial institutions, and get a consolidated view of their holdings via DBS’ planning tool. Those who engage with the nudges the tool sends out have saved about 80% more than non-users. They have also invested about four times more and are two times more insured, he said.
DBS’ wealth planning and relationship managers will get these nudges, which they can use to advise their clients, he said, adding: “We are now at the stage to scale these financial planning capabilities across the rest of the markets.”
There are nuances between various markets in areas like macroeconomic developments and regulatory requirements. “But the key is, once we have a tool and the technology, it’s a lot easier for us to be able to input (customers’ financial data) and let the tool help us with a consistent approach.”
Fee income from the wealth management business is set to become more crucial for DBS and other banks, which have seen tailwinds from high interest rates fade amid higher funding costs and muted demand for loans.
The US Federal Reserve is also expected to make three rate cuts in 2024, which will eventually lead to a further drop in banks’ margins here.
DBS, South-East Asia’s largest bank, plans to bring its digital advisory capabilities from Singapore to its other core markets of Hong Kong, Taiwan, India and Indonesia, as well as Thailand, a growing market for the bank.
Mass affluent customers, those generally considered by DBS to have at least S$50,000 a year in assets under management, present huge opportunities overseas. Such customers contribute to 80% of total wealth in Taiwan, 60% in Hong Kong, and 46% in Thailand and in Indonesia, according to 2021 research by business consultancy Capgemini.
DBS completed its acquisition of Citigroup’s consumer banking business in Taiwan in August 2023, becoming the largest foreign bank by assets there. The business contributed S$12bil in deposits and S$10bil in loans to DBS in 2023. — The Straits Times/ANN
