Singapore banks must innovate to thrive: PM
(From left) Madam Ho Ching and PM Lee Hsien Loong being received by Mr Wee Ee Cheong, deputy chairman and CEO, UOB, Dr Wee Cho Yaw, chairman emeritus, UOB, and Mrs Wee during the bank's 80th anniversary dinner. Photo: Don Wong
SINGAPORE — While Singapore’s banks are in a good position with solid global reputations, strong balance sheets and regional presence, they need to continually innovate and keep up with the latest technologies as well as upgrade their services and business models to thrive in the competitive environment, Prime Minister Lee Hsien Loong said today (Nov 12) at United Overseas Bank’s (UOB) 80th anniversary dinner.
While Singapore lenders are doing well overall, Mr Lee pointed out that there are others that are better in almost every specific area. He gave the examples of digital banking models in the United States and Australia that offer a wide range of products and services, have clear and simple interfaces, and help customers to make financial decisions. For mobile payments, he pointed to China, South Korea and even Kenya, and for credit assessments, he noted the pervasive use of technology in both the US and China.
“We have to continually innovate and keep up with the latest technologies and services, balance between risk-taking and prudence. I’m happy that several leading banks and insurance companies have set up innovation labs in Singapore to design, test-bed and develop products and services for their Singaporean and global customers,” Mr Lee said.
“Looking ahead, the banking industry is entering a challenging phase. The wider economic environment is uncertain, global growth is lacklustre despite recent hopeful signs of a US pick-up. There is more than a chance of a regional slowdown, with slower growth from China. And interest rates have been low for a prolonged period, which has crimped net interest and investment income,” Mr Lee said.
Banks are also facing tighter regulations following the global financial crisis, with higher capital and liquidity requirements and more intensive supervision, even while technology is moving very fast with new business models disrupting traditional banking, he noted.
More and more people are making payments through their smartphones for taxis, movie tickets, online purchases, at restaurants and shops, and to transfer money. “On Singles Day yesterday (Nov 11) in China, shoppers racked up US$14.3 billion (S$20.3 billion) of sales with Alibaba, with 70 per cent of the value done through mobile purchases!” he said.
Mr Wee Ee Cheong, deputy chairman and group chief executive of UOB, said Asia is clearly on its way to becoming a global economic powerhouse despite heightened volatility and complexity in financial markets even six years after the global financial crisis.
“There are great expectations for the region’s prospects. It has a growing middle class, rising intra-regional trade and investment flows. While Singapore is our home base, we see our future as closely tied to the success of the region. UOB is well-poised to seize the tremendous opportunities, with the rise of Asia, increasing connectivity and cross-border flows,” Mr Wee said.
UOB today announced the Wee Cho Yaw Future Leaders Award, which provides tertiary education opportunities to under-privileged students and is aimed at developing future leaders. The S$50 million scholarship programme includes S$20 million from UOB and a 1.5-times-matching grant from the Government. The award, a partnership with the Nanyang Technological University (NTU) and National University of Singapore (NUS), is a tribute to Dr Wee Cho Yaw, Chairman Emeritus and Adviser, UOB, for his achievements within the bank and the community, Mr Wee said.
Dr Wee handed the CEO reins to Mr Wee eight years ago and the chairmanship to Mr Hsieh Fu Hua two years ago.
Other eminent leaders at the event were Emeritus Senior Minister Goh Chok Tong; Mr Tharman Shanmugaratnam, Deputy Prime Minister and Coordinating Minister for Economic and Social Policies; and Mr Ravi Menon, managing director, Monetary Authority of Singapore.
