'And they lived happily ever after' – the potential for collaboration between banks and non-banks

Asian banks are seriously reconsidering what they perceive as competition. Internet giants, from Baidu to Google, telcos and payment providers such as Singtel and Paypal have been aggressively rolling out new products and services in the financial services space and they are turning out to be quite popular with customers, writes Sruti Rao

Asian banks are seriously reconsidering what they perceive as competition. Internet giants, from Baidu to Google, telcos and payment providers such as Singtel and Paypal have been aggressively rolling out new products and services in the financial services space and they are turning out to be quite popular with customers, writes Sruti Rao

DBS’s group CEO of consumer banking and wealth management, Tan Su Shan, has publicly alluded time and time again that technological and digital companies were facilitating transactions, loans, and other payments better and faster than the traditional banking transaction.

The emergence of such non-traditional players is recognized by the industry – but what is to be done with it? How should banks be reacting? Gilbert Chuah, head of internet channels at United Overseas Bank, says that existing players must learn from these technology companies on how they bring quick and convenient service to the tech-savvy and social media-centric customer of today.

Analysing the service features of these non-bank players is already happening, but what the next steps are from here, still remains to be seen. Should there be a replication of non-bank services or should banks be working in unison with these new stakeholders? Are collaborative partnerships between banks and varying non-financial stakeholders the way of the future? Or will we simply see a mushrooming of distinctive new players creating their own sub-sector of providers in financial services? These are some of the questions we will be answering during our RBI Trailblazers Asia conference in less than two weeks in Singapore.

When speaking to banks in this space, there seems to be a consensus that embracing non-banks into the bank’s service is imperative in order to stay in the game.

I don’t think we need to get ahead of ourselves on this, there will always be an integral role for banks – to manage customer deposits, provide advisory and customised capabilities is still a core need across segments. Consumer trust is still an ever-present issue to consider. All being considered, the banks’ long-term strategy will not change. They will still aim to be customer centric, develop advisory capabilities, build a strong network and provide secure service across multiple payment channels. The question is – how will they integrate the services of alternative payment providers into their proposition and how the ecosystem will pan out thereafter?

This is a space to watch folks, and an interesting one at that.