Dennis Khoo: The current landscape of banking industry (Traditional VS Digital)

Dennis Khoo: The current landscape of banking industry (Traditional VS Digital)


My name is Dennis Khoo and I’m a Managing Director
and I’m responsible for the TMRW Digital Bank Basically my team
and I have been working nonstop on building a digital bank throughout
Southeast Asia for the past three years Fundamentally a lot of people, it’s hard
to grasp the concept banking because banking is so fundamental to the modern
economy and banking is regulated because of his pivotal role in economy and
because of that I think that banking will always be around It’s just that the
form and shape of banking will change When banking was small and it has
limited number of customers mostly more wealthy customers, back in the days, where
banks were founded You could get very good service because small group clients very selectively, so you get good service As banking became mass market
and as the global economy needed banking it lost some is personalized touch
it was not possible especially when you’re based on human processors
setting up branch it became costly to give personalized service But in the new era where you
know every single person has a branch a digital branch in your pocket with the
advent of very low-cost telecommunications, I think those
bottlenecks are removed and now when you layer on data, when you layer on digital
engagement and you layer basically a philosophy of providing very good
precise service you have the construct the elements of the new banks that we
believe are gonna dominate in the new millennia So it has really evolved and I
think the evolution has been around the channels starting a branch and call
centers, of course ATM machines, cash deposit machine, then
you went to internet banking more mobile banking and now mobile app banking So one of the big trends I see happening and that’s why it’s so exciting in
Southeast Asia because you have a situation where you have
400 million millennials you have smartphone penetration going up from 52 percent in
2017 to 65 percent in 2020 and that adds 100 million a 100 million customers So Southeast Asia, I think is the unique playground, you won’t see this in all
markets well we are very cognizant that I think well we are one of the leaders
lots of people reinventing this space as we look behind
us there’s lots of people progressing catching up with us so we have to stay ahead
all the time When I compare Thailand and I say Singapore, actually Thailand, we
have found very advanced they probably have some of the best digital banking in
Southeast Asia, if not in Asia, and we were fortunate that there is no digital
bank competitor in Thailand yet and we actually the first true digital bank
true data-driven digital bank focused on digital engagement and I think my team
and I very happy that even though we you know we’ve only launched recently we
really have brought about a real change and competitors are looking us Competitors are copying us so that gives us a sense of satisfaction that we’re
actually doing something that is setting the standard and pushing the envelope in
in Thailand If you look at Singapore I mean Singapore is a much smaller population so
the question is do you have the long-term ability to see this through because
one of the things that I think for UOB that’s unique is that
we have the ability to see the long-term picture and to ride through the period
where your investments initially may not be yielding as much but over time
because it’s a very long-term business right over time if we are serving the
core society, we’re serving the millennials the Millennials will grow their incomes will grow and I think one
of the challenges in this industry is that if you have a small population and
because banking is so pivotal to the economy to the government, you need to
have stringent rules that are you know up to mark, you need to have governance so all this adds to the cost of building a digital bank So I believe you really
need to really have the long term view and the deep pockets to see through and not every company is going to have
that long term view of things We are always on the
lookout for a particular group or Fintechs that operate in what we call
the digital engagement space Those are Fintechs that use data to
drive insights and we believe that that’s a very important chain of events
that happens in banking You acquire customers They transact, when you
transact you generate data with data you can create insights, with insights we can
engage customers and engage customers buy more products from you, they transact
more creating a virtuous cycle where data improves engagement and that’s what
we’re after and we call this A.T.G.I.E Acquire, Transact, Generate data, Insight and
Engagement and that’s the business model of the new data driven digital bank It is very important to keep in mind and there are societal implications in
everything we do because I think humans are finding out there if we all just
look after ourselves then the whole world suffers so this is going to be a
very big team going forward right How do you continue to let people have better lives
see their children have better education have better homes but in the process of that you consume more and as you consume
more there’s a disadvantage to society so I think that banking given its
pivotal role in economy and the fact that if you don’t get credit today it’s
very hard to expand I think there is a very significant role from a
sustainability perspective that is one of the key things that the financial
industry is looking at but if you also look at the fact that we can bring,
change lives we can better people’s lives through credit, I think that’s also
a very important consideration so I think both are pivotal and both challenges
that the industry needs to live up to I think definitely what we’ll see is
banking me available to a lot more customers and that’s important because
with banking, with access to credit people can do more, they can improve
their lives they can build their businesses, they can become more
productive so I think those are very important developmental objectives for
Southeast Asia because as I mentioned There’s still so many people that
don’t have a bank for those who are already banked, I see service standard is going
up significantly I see digital banks like us setting the
standard, pushing the envelope for better and better service and I think that’s
how we win customers that’s how we continue to stay here and that’s how we
are now keep so I think lots of exciting things ahead

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