OCBC Bank’s digital transformation is bearing fruit, with costs down and more customers transacting online, said chief executive Samuel Tsien yesterday.
This article originally appeared on The Straits Times on 2nd November 2018. You can view the original article here: https://www.straitstimes.com/business/banking/no-digibanks-as-ocbc-opts-for-digital-transformation
OCBC Bank’s digital transformation is bearing fruit, with costs down and more customers transacting online, said chief executive Samuel Tsien yesterday. But the bank will not create digital banks, nor apply for an Internet bank licence in Hong Kong, said Mr Tsien following the release of its third-quarter results.
He noted that OCBC does not believe in focusing on digital banking but in digital transformation throughout the bank – remarks seen by some as a slight dig at his competitors. DBS has digibanks in India and Indonesia, while United Overseas Bank (UOB) said in August it plans to launch a digibank for Asean clients.
OCBC feels it does not need a separate digital bank to look for new customers. “We also do not think it’s the right approach,” Mr Tsien said. He also noted that it is not applying for an Internet bank licence in Hong Kong, a stance also taken by UOB and DBS. OCBC has been spending more on technology over the past five years as it pushes towards digital transformation, he added.
Technology spend, excluding IT staff costs, has risen steadily to 11.3 per cent of total costs. It hit $330 million in the first nine months this year, against $430 million for the whole of last year. This could go to 12 to 12.2 per cent next year, where it could be “half a billion dollars or more, it is most likely”, Mr Tsien said. OCBC is also committed to spending $20 million on educating its staff on their digital knowledge.
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2 November 2018