DBS is betting big on India

By refusing to ditch the physical bank branch and prioritising the improvement of its mobile offerings, DBS has fully embraced the phygital model in India.

With the goal of cashing in on the rapid economic growth and pace of wealth creation in the world’s seventh largest economy, DBS set up a wholly-owned subsidiary in India and plans to grow its physical network in the country to over 100 touchpoints across 25 cities over the next 12-18 months.

To service its growing list of retail clients, large corporates and SMEs in the country, DBS Bank India opened nine new branches and extended its reach to Hyderabad, Ahmedabad, Coimbatore, Vadodara, Indore and Ludhiana in March 2019. The bank also has plans to deepen its footprint in Gurugram and Noida in the National Capital Region and open five branches in unbanked rural centres to complement its plans of adding approximately a thousand employees to its Indian workforce.

Also read: A closer look at a ‘whole new way of banking' taking over India, Indonesia

The strengthening of the bank’s brick-and-mortar presence complements the earlier launch of its mobile-only offering, digibank, in 2016. Since its launch nearly two years ago, digibank’s Indian userbase has grown to over 2.5 million users which benefit from unsecured loans and paperless onboarding for mutual fund investments.

In an exclusive interview with Asian Banking & Finance, Surojit Shome, General Manager and CEO of DBS India outlines how he plans to carry out his vision for India.

DBS has been driving inroads into India even as foreign rivals trim down their operations - why did the bank believe the time was ripe to beef up its physical presence in the country?
India is one of the six core markets for DBS Bank. It is our strategy to have a full service and diversified franchise across all our customer segments and business lines in each of these markets. In all our core markets outside Singapore, barring India, we have existing subsidiaries, which allows us the regulatory flexibility to build our business as outlined above. Hence, the subsidiarisation in India is a natural consequence of our business strategy for this core market. In India, we are among one of the first prominent foreign banks to establish a local subsidiary. Operating as a local bank will allow us to build a broader platform.

We are bullish about India as it has been witnessing an accelerated digital transformation apart from being one of the fastest-growing markets in the world. We think that the opportunity to access the banking wallet in India is different from what it would have been five years back because of these changes.

We aim to access the retail and SME segments to expand our business footprint, while leveraging digital capabilities to offer best-in-class banking experiences. We are extending our reach further to major growth centres, through a blend of physical touchpoints and strong scalable digital platforms.

How will the physical outlets complement the earlier launch of digibank in 2016?
We believe that changes in technology and customer trends are disrupting the industry. However, like any change, it is gradual, and there are different sets of customers in different stages – either digitally inclined or digital natives..

Further, we envisage that the definition of a ‘branch’ will change substantially going forward. Earlier, digital technologies merely complemented a bank’s physical network. However, the banks of tomorrow will look fundamentally different from the banks we have today. Therefore, our philosophy is focused on providing an appropriate customer experience across channels. We want to reach out to our customers through an optimum mix of branches and banking outlets (manned and unmanned e-kiosks/ATMs).

Furthermore, our learnings from Indonesia, where we launched digibank after India, have indicated that the presence of an appropriate network and brand awareness enables a substantially quicker build-up and engagement with new customers. We hence believe a phygital model can accelerate engagement levels with existing and new customers and help us provide last-mile servicing requirements.

What will be the offerings of the bank’s branches in India?
Our approach is to grow both our SME as well as our digital retail customer franchises. Our branches will offer a full range of financial services and a comprehensive suite of products for retail, SME and large corporate customers. Our retail expansion is led by a phygital approach across digital and physical channels.

Our endeavour both for SMEs as well as retail customers is to provide digital platforms which meet most if not all their requirements. For retail customers, our key platform is digibank, an entire bank on the mobile which was launched as the first digital bank in the country. Through digibank, we offer a unique paperless, branchless, signatureless banking experience across savings, deposits, payments, loans, investments and insurance to our customers. The users may open an account in 90 seconds, invest in mutual funds instantly, apply for a personal loan in 5 taps, and get a health insurance cover immediately, and with no health checkup required.

For a physical touch point, we have a branch banking offering for our high-end retail/Treasures customers to whom we provide all of the above services by specialists and dedicated relationship managers. In line with our promise to help our customers 'Live more, Bank less', we continue to build intelligent journeys that help them seamlessly fulfill their banking needs.

CEO Piyush Gupta said in a Bloomberg interview that the bank is not going to focus on cross-border wealth management at this point in time but acknowledges that the segment represents a good opportunity to scale in India. Would you be able to elaborate on this?
We do see a clear opportunity to reach out to Global Indians and service their banking needs in India. This is also supported by DBS’ strong franchise and presence in key Asian markets, which has helped drive preference towards the DBS brand and our offerings. We offer a range of solutions to the Indian diaspora across key corridors (India-Singapore, India-Hong Kong corridors), building on our service ethos and emotional connect, as a trusted financial partner. Our current product platform is already capable of providing the services for the Global Indian segment which will also benefit from the expanded network.

The bank also intends to open five branches in unbanked rural centres. What are your plans to expand the net of financial inclusion in one of the world’s most unbanked populations?
We continue to support the financial inclusion initiatives of the Indian government by way of increasing our footprint in unbanked rural centres, in line with our overall expansion plans. Our intent is to support banking penetration in the URCs, while also working closely with local communities. Given that the number of rural branches will only be a quarter of our overall branch expansion we will look to open these in concentrated clusters to try and get some network effect.

How does DBS plan to contend against homegrown lenders with more established customer bases?
Given the size of the market, there are opportunities for each type of enterprise to grow. We believe we can combine the strengths of a strongly rated, well-capitalised and managed bank with that of an innovative digital disruptor (with global recognition as a digital innovation leader in the banking sector) to create a differentiated proposition to carve a profitable niche for DBS in India.